Underwhelming Prices, Overwhelming Costs

by 5m Editor
2 July 2012, at 7:12am

UK - An underwhelming day for spot and contract sellers with an almost universal stand-on despite the DAPP moving up by 0.62p this week to 149.99p, writes Peter Crichton.

Tulip opened the batting by standing on at 150p with all of the other major players following suit with the result that the scoreboard reads as follows:

152p Woodhead
151p Gill
150p Tulip
148p Cranswick and Vion.

Spot buyers were generally quiet with reports from some of the smaller fresh meat wholesalers that demand has been indifferent matching the unsettled weather.

As a result spot bacon was generally traded at around the 150p and it was difficult to get much more than then except for lighter weights which traded in the 154p–160p range.

Cull sow quotes are continuing to slide reflecting a build up of stocks in European Union mainland cold stores where demand has also been selective not helped by unseasonal weather patterns across much of northern Europe.

Most cull sows were traded in the 112p–116p range with no great appetite for extra numbers on either side of the Channel.

The euro which plays such an influential part on the pigmeat import/export balance traded on Friday at 80.81p which is slightly up on last week and perhaps allegations that certain high street banks have been rigging internal interest rates may hit the pound and help pig producers on this front?

The cost of feed continues to dominate the market as a whole and further price rises during the week have proved to be expensive for pig producers with ex farm feed wheat now quoted at 3185/tonne compared with 3147/tonne at the start of the year.

Futures quotes are also painting a fairly expensive picture with LIFFE wheat at 3190/tonne for July and 3170/tonne for November.

Soya prices are reported to be off the clock and with some analysts suggesting that this could soon hit 3400/tonne. At current prices compound finishing rations are now costing up to 3250/tonne.

As a result weaner values have continued to fall with the latest AHDB 30kg ex-farm weaner average now quoted at a mere 342.26/head and some 7kg pigs trading at less than 330/head.

The only way in which the British pig industry can look forward to a positive autumn is if finished pig prices move ahead (which seems unlikely) and feed prices go in the opposite direction, as well as further reductions in European Union mainland slaughter pig numbers.