Spot Prices Hit 155p-160p

by 5m Editor
16 May 2011, at 8:04am

UK - Another positive day for pig sellers coupled with recent slight falls in the grain futures markets, but there is still a significant gap between CoP levels and the pig price, writes Peter Crichton.

The DAPP continues its steady upward path and put on another 1.81p this week to stand at 144.78p, which (surprise surprise) is exactly where it was this time last year compared with ex-farm wheat quotes a year ago on 399.80/tonne, but 3190/tonne today.

All of the big four contract abattoirs took their cue from the DAPP and Tulip went up a refreshing 3p to 150p, Vion were +2.5p to 149.5p and Cranswick were a little more coy only going up by 2p to 149.5p as well.

Inevitably Woodhead remained several lengths to the good in the pig price handicap race at 154p.

Spot quotes are however still well ahead of their contract counterparts with prices generally between 155p–160p, but once again premiums were available for “specials“ and in those areas where buyers were still short of numbers.

A common topic amongst processors is the problems they are having in persuading retailers to pay more for British pigmeat and in the eyes of many with the exception of Waitrose, Morrisons, M&S and the Co-op, the big retailers seem to have little or no regard for the sustainability of the pig industry and on the pricing front have more grubby habits than a nun with a broken down washing machine.

Slightly negative signals are emerging in the European pigmeat market with the release of large volumes of pigmeat formerly held under the Private Storage Aid scheme with the result that cull sow quotes moved down by 6p–8p/kg. Although exporters were looking for numbers to maintain dwindling throughputs, they pulled their bids back to reflect the European situation with delivered prices of up to 106p were available for large loads, but 102p –104p reflects most trading on a delivered basis.

The euro ended the week worth 87.6p effectively reducing the value of imported pigmeat by 1.2 per cent.

Reports are also filtering through of more cheaper foreign carcasses hitting British wholesale markets which may to some extent put a lid on the recent sharp rise in finished pig prices, even though there is an underlying shortage of British-welfare friendly product.

Weaner prices are continuing to stage a measured recovery with buyers still keeping a weather eye on the grain market because of the effect this will have on their margins and the latest AHDB 30kg ex-farm weaner average is now quoted at 345.19/head.

The industry still has a long way to go to meet the 164p CoP figure quoted by NPA, which is why we are all hoping that the recent price rally will continue until we hit the dreaded August Bank Holiday period and a time when pig numbers normally start to rise and prices fall.

There are very few producers with enough fat on their backs to face another winter like the last one with their pig margins still very much in the red.