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No April Foolery Here...

by 5m Editor
4 April 2011, at 9:12am

UK - Yes Yes Yes spot prices will be up again next week and no, those people who were looking for quotes in the 145p region were not April Fools after all, writes Peter Crichton in his latest Traffic Lights commentary.

A rising DAPP which put on almost a penny to improve to 136.58p set the scene and some (but not all) of the squeak prices followed suit.

With clear evidence that spot buyers were likely to pay up to 5p more for pigs in places, sellers were disappointed to see that Tulip only put up their weekly price by 2p to 139p.

Vion who have much catching up to do added 2.5p to 138p, but Cranswick even more mysteriously seemed to have run out of breath leaving their weekly price at 137.5p, or perhaps because their pig buyer was on holiday?

As anticipated Woodhead were once again the white knights of the industry and improved their weekly price to 142p.

Something of a north/south divide has opened up in the spot market with quotes in the east and the west as high as 150p for "specials", but most spot bacon was traded in the 143p - 147p range.

"Oop North" something of a colder wind was blowing perhaps influenced by Cranswick's stand-on stance with spot bacon prices lagging some 2p to 4p behind the field.

Sheep and beef prices should point the way for further improvements in pig returns which are sorely needed due to eye wateringly expensive compound feedstuffs, but reports are already being received of old season lambs selling at up to 35/kg deadweight and beef seems to be heading towards the 33/kg deadweight mark.

Against these prices pigmeat still looks extraordinarily good value with scope for further increases.

The relative strength of the euro which closed on Friday worth 88.13p has also helped on the cull sow front coupled with generally firmer German prices with the result that delivered quotes for large loads were available in the 106p – 108p range with collected prices nudging above 100p.

Reports of potential new entrants in the cull sow business will also help to keep the two main buyers on their toes and provide producers with competitive and in some cases more convenient outlets at the same time... watch this space.

Weaner prices are still however suffering from the effects of very high feed costs with finishers reluctant to pay much more than 340 for a 30kg weaner, although the latest AHDB 30kg weaner average has improved marginally to 341.43/head with 7kg pigs trading at 310 - 314 below this according to quality.

We still need a sense of perspective in the industry and this was brought home by a processor stating that if pig prices continued to rise he would be on a nil margin. Perhaps he should try being a pig farmer where despite the benefits of better pig prices than they were earlier in the year, many producers are still losing in excess of 310/head for every pig that goes out of the gate.

Unless this trend is reversed some producers will be following.