Friday the 13th: a Difficult Day for Sellers

by 5m Editor
16 January 2012, at 7:11am

UK - As expected, Friday 13 January proved to be a difficult day for sellers with several negative signals appearing early on, including a reduction in the DAPP from 147.85p to 145.67p, followed by Tulip's more modest 1p reduction in its shout price to 140p and signs that very little extra spot space was likely to be available, writes Peter Crichton.

Although it was possible to shift spot bacon at a price, this tended to be in the 134p–136p region with small premiums available for lighter weights and for regular weekly sellers, but as one buyer said, "We can take the pigs if you can take the price," which is one step better than not selling them!

Following on from Tulip's lead, Woodhead also dropped by a penny, but Cranswick, Gill and Vion took 2p off, so the league table now reads as follows:

  1. Woodhead 142p
  2. Gill 141p
  3. Tulip 140p
  4. Vion 138p
  5. Still bringing up the rear — Cranswick 137p

There are a number of reasons for the recent price falls which include much lower European pigmeat values with imports undercutting the domestic market by a fairly wide margin as well as indifferent retail demand and a small bulge of pigs still left over from the Christmas/New Year holiday period.

Just to add to that sinking feeling, recent press reports suggesting there is a link between eating processed meats such as bacon or sausages and pancreatic cancer will do nothing to help on the demand front, as well as Tesco shares plummeting 14 per cent in value on the news of reduced profit expectations, which will certainly not help when it comes to trying to persuade them to pay pig farmers a viable price, ie. "very little hurts".

However looking beyond January there are signs that European numbers will tighten in the months ahead as well as the upcoming European Cup and London Olympics, all of which should help to boost al fresco barbeque demand.

Sow prices have finally started to reflect lower European mainland pigmeat values, although quotes did not fall by as much as originally anticipated with most of the larger buyers trimming 2p–4p off their prices with the result that most cull sow quotes were generally in the 112p–115p range, but still plenty of enthusiasm for numbers which remain tight. A very slight recovery in the euro which traded on Friday worth 82.9p compared with 82.55p seven days may also have slightly helped to take the edge off any sharper price cuts.

Despite recent rises in feed prices with ex-farm wheat now traded at £148 per tonne and March wheat quoted on the LIFFE exchange at £155 per tonne, weaner prices are continuing to nudge ahead and the latest AHDB 30kg ex-farm weaner average is up from £44.59/head to £45.17/head.

Still plenty of challenges ahead especially with retail price wars continuing between some of the big players, but once the current backlog of pigs has been cleared signs are emerging that we could be looking at slightly more positive market as we move towards the spring.