Bumping Along the Bottom

UK - Although the DAPP dropped again to 148.05 on Wednesday for the seventh successive week and most (but not all) of the shout prices followed suit, signs are emerging that the slide in spot prices may soon be levelling out, Peter Crichton writes in his latest Traffic Lights commentary.
calendar icon 5 September 2011
clock icon 3 minute read

With the holiday period drawing to a close demand should soon improve coupled with a slight hardening of continental pigmeat prices as we enter autumn. As a result most spot bacon was traded slightly ahead of 140p/kg with 4–8p premiums for lighter weights.

Reports of a proposed Belgium outgoers-type scheme to remove 100,000 sows from their national herd as well as predictions of a sharp drop in the size of other European Union mainland herds may also help to correct the supply/demand inbalance which has been putting pigmeat prices under so much pressure recently.

The latest shout price league table now reads as follows:
145p Woodheads (-1p)
143p Tulip (-1p)
142p Cranswick (NC)
141p Vion (-1p)
141p Gills (NC)

Reasonably firm cull sow demand in Europe is also putting a base in the trade and signalling more stability in the European Union mainland pig meat market as a whole.

British cull sow exporters were looking for bigger numbers and prices were mainly in the 107–110p range according to specification.

The relative strength of the euro which closed on Friday worth 87.9p is also helping to maintain cull sow values as well as making pigmeat imports less competitive.

The weaner market however remains a troubled sector with larger numbers coming forward at a time when finishing space is at a premium with the latest Agriculture and Horticulture Development Board 30kg weaner average falling again to a five-month low of 341.85/head with reports of spot weaners being traded as low as 335/head ex-farm.

Rising feed prices will always have a direct impact on weaner values which coupled with indifferent finished pig returns are leading weaner buyers to continue to buy replacements on a more cautious basis, hence this sector of the market remains under pressure with most weaner breeders in the red.

And finally the news from the cereals market is not good for pig producers with ex-farm feed wheat quoted at 3165.40/t and LIFFE November feed wheat traded at 3172/t.

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