Mind the Gap

by 5m Editor
4 July 2011, at 7:08am

UK - A slightly better feeling in the pig market today possibly helped by a return to better weather and the hope that we might see the British tennis player make further progress at Wimbledon rather than see the Scottish one lose, writes Peter Crichton.

The trend was set by the DAPP for almost the first time in living memory remaining exactly unchanged at 152.34p and it was no surprise to see Tulip, Vion, Woodhead and Cranswick leaving their prices unchanged as well, although the wide gap between Woodheads at 155p and Cranswick at 151p remains. Mind the gap.

As a result virtually every spot buyer in the land also stood on and although one or two had suggested earlier in the day they might like to take a penny or so out, this was not to be.

Most spot bacon was traded in the 153p–156p range with no need to settle for anything less except on a generous spec.

Signs are also emerging that there may be slightly fewer pigs in the system with the DAPP average weight down to 77.62kg and fewer reports of pigs being rolled, which has been the pattern over the last few weeks and in fact by the close of trading one or two abattoirs were still prepared to take a few extra pigs if they were available.

The relative strength of the euro which closed on Friday worth 90.3p, despite the revolting Greeks, helped cull sow prices to nudge ahead with delivered quotes of up to 104p/kg available and ex-farm collected prices 4p–6p below this, but producers need to check their killing-out percentage because often the highest can be the lowest and vice versa.

Reports of fewer cull sows in the system and the prospect of up to four abattoirs operating this sector soon should also help to inject more competition, bearing in mind that is double the number of buyers we had this time last year.

Recent sharp falls in cereal prices have failed to filter through to the weaner market where 7kg and 30kg pigs still remain hard to move at anything but knock-down prices with the latest Agriculture and Horticulture Development Board 30kg ex-farm average almost static at a lacklustre 345.80/head and 7kg pigs trading at 315 below this.

The feed market is not for the faint hearted at present and although the spot ex-farm feed wheat price of 3167.80/t had only eased by a couple of quid compared with last week, futures prices showed much more variation with the better news that November quotes have now fallen to 3159.50 and forward prices for the spring of 2012 are at generally similar levels.

Unfortunately it takes a long time for the benefits of lower feed prices to filter through to farmers' cashflows, especially if they have already fixed their prices for several months ahead, but at least this is a step in the right direction.

The downside is that the retailers who never really gave us a price rise when feed costs soared last year may now be looking for a reduction, but hopefully the presence of 70 BPISG supporters outside Tesco's annual general meeting today will help remind the "every little bit hurts" supermarket of the need to pay fairer and sustainable prices to its British farmer suppliers.