The Cold Weather Will Warm Up the Market

by 5m Editor
6 February 2012, at 6:18am

UK - Although DAPP dropped a further 1.04p to stand at 142.31p, Cranswick probably set the trend last week by leaving its shout price unchanged and this cue was followed by Tulip, leading to all the other shout prices remaining unchanged, writes Peter Crichton.

The déjà-vu league table now reads as follows:

1 — Woodhead, Gill 138p.
3 — Tulip 136p.
Last — Vion, Cranswick, 135p.

There was a little more life in the spot market, although most of the large processors are still complaining that retail demand remains lacklustre and it may be a few more weeks before we see any significant upward movement in pigmeat prices.

European markets were also reported to have held at similar levels and spot bacon was generally traded between 130p–135p according to spec.

If the cold snap continues growth rates will slow up and retail demand will improve, which could soon turn a very slight surplus into a significant shortage and reverse the supply/demand formula at a stroke.

Cull sow quotes also benefitted from strong competition between the three main export abattoirs as well as a slightly more positive outlook in the European market and as a result export abattoirs were tendering bids of 2p–4p more than last week with prices of 113p–115p readily available.

The relative stability of the euro which traded on Friday worth 83.06p has also helped inject a little more stability into the cull sow sector and it is worth remembering that this time a year ago there were only two main outlets for cull sows compared with four today which were trading at 90p/kg, so it is not all doom and gloom.

The weaner market has remained remarkably firm, more due to a shortage of numbers than any particular confidence in finished pig prices in the weeks ahead with the latest Agriculture and Horticulture Development Board 30kg ex-farm weaner average quoted at 344.59/head, but useful premiums still available for spot weaners where some buyers seem to be short of numbers and need extra pigs to meet finished pig contract commitments.

Grain prices are however continuing their steady climb with ex-farm feed wheat now quoted at 3162/tonne up from 3155/tonne a week ago and futures prices are at their highest level since last September with March and May wheat quoted at 3165/tonne, which is putting producers' margins under pressure.