Spot Sellers Made More Than Shout Sellers

10 September 2012, at 7:23am

UK - So much for the British differential, in mid June European Union pig producer prices were in the 134p/kg region and the DAPP stood at 149.45p, writes Peter Critchton.

Since then the continental price has risen by 16p/kg ( 312.50/pig) whereas the British price has gone up a miserly 1p, worth 78p per pig with the DAPP currently standing at 150.28p.

Fingers are being pointed at the inadequacies of the shout price system and to rub further salt in the wound on Thursday night Tulip decided to leave its prices at stand-on levels and all the others followed suit, with the exception of Gill which was bold enough to add a penny followed by a surprising but welcome U-turn from Woodhead, which also went up a penny, recognising that the producer’s need is greater than processors or retailers.

The league price table now reads as follows:

  • 155p Woodhead
  • 154p Gill
  • 151p Tulip
  • 149p Cranswick and Vion

The inequality of the shout price system was further underlined by the relative ease with which producers selling on the spot market were able to receive bids of between 156p–158p earning them an additional 6p–8p/kg when compared with contract.

Consumers, processors and retailers need to understand that it is simply impossible for producers faced by soaring feed costs to stay in business with pig prices at their current levels.

This fact has been underlined by a steep rise in cull sow slaughterings with 7,000 more sows killed in July alone and signs of further herds heading for the exit door.

This trend was confirmed by the shock news today that Bacton Pigs Limited, one of the oldest and longest established Suffolk-based pig producers, has decided to close two of its large indoor breeding/finishing units with 27 jobs at risk and the loss of 1,400 sows producing 600 finished pigs a week.

Despite the larger numbers available, cull sow prices have held firm helped by a slightly stronger euro which closed on Friday worth 79.86p and as a result most cull sow export abattoirs were bidding in the 114p–116p range.

The weaner market continues to struggle with the latest AHDB 30kg ex-farm weaner average quoted at 338.98/head, not being helped by the current level of finished pig prices as well as high feed costs with ex-farm wheat quoted at 3193.80/tonne and November 2012 LIFFE quotes at 3205/tonne, not to mention soya in the 3450/tonne region.

Unless finished pig prices can reach the 170p/kg level some producers are considering serving notice on abattoirs as it is quite obvious they will be unable to supply pigs for longer than the notice period at a lower price.