Fickle Balance Between Supply and Demand

by 5m Editor
18 July 2011, at 8:00am

UK - The fickle balance between supply and demand does not seem to be working in producers' favour and a very slight shortage rather than a small surplus would work wonders, writes Peter Crichton.

A combination of lacklustre retail demand and cheap imports is continuing to put the British pig price under pressure, although most pigs found homes but at slightly discounted prices in places.

Tulip and Woodhead are to be commended for standing on with their shout prices for next week, but Cranswick dropped a penny and Vion came down by 0.5p, so the weekly league table now reads:

1 Woodhead 154p
2 Tulip 152p
=3 Cranswick, Vion 150p

The DAPP also showed a slightly easier trend, falling marginally from 152.86p to 152.71p, but based on a slightly heavier deadweight sample.

At this time of year the message remains the same to producers, "Rather like a jockey, try and keep on top and keep the weight down".

However as two processors have pointed out, the only way they could kill their full number of pigs was to drop their price and the alternative would be to hold the price and cut the kill. A good point — and probably better to keep selling pigs even at a discount than create a rollover.

Spot prices were also in retreat with 150p a benchmark figure, but some were prepared to offer a copper or two more than this in places.

The recent fall in the value of the euro which has slipped by almost 2 per cent over the last seven days and closed on Friday worth 87.7p has done nothing to help as far as either imported pigmeat or cull sow prices are concerned.

As a result cull sow quotes for next week were anywhere between a reluctant stand-on and 1p–2p off, but most shrewd sellers were able to get prices around the 100p or a tad more for larger loads on a delivered basis.

Weaner prices continue to be affected by slightly downbeat forecasts for finished pig returns in the autumn and although feed prices have been a shade easier, they are still far too high when compared with finished pig values.

The latest Agriculture and Horticulture Development Board 30kg ex-farm weaner average of 345.91/head reflects a lack of any real enthusiasm by buyers with space still at a premium, but perhaps the situation will change once the preoccupations with harvest and carting expensive bales of straw are out of the way.