Signs of a Plateau Ahead

22 October 2012, at 8:02am

UK - Following Tulip's lead, all of the shout price abattoirs moved their prices up by a penny after a further improvement in the DAPP which put on 1.37p and now stands at 157.11p, but spot buyers were not prepared to put any more money on the table following reports of easing values in mainland Europe with the key German indicator price slipping by 5 eurocents, writes Peter Crichton.

On this side of the water however all pigs were sold fairly readily and the latest shout price league table reads as follows:

  • 163p Woodhead
  • 160p Gill
  • 159p Tulip and Vion
  • 158p Cranswick

Spot bacon was generally traded in the 161p–163p range according to region and specification, but there are continuing reports from the fresh meat sector that demand remains slow as consumers become more selective and the same pattern is being seen with beef and lamb.

The cull sow market remains a ready barometer of the health (or otherwise) of the European mainland pig industry and for the first time for many months British cull sow quotes actually dropped by an average of 2p despite a relatively firm euro which traded on Friday worth 81.27p compared with 80.73p a week earlier

The three main cull sow abattoirs were reported to be buying on a delivered basis in the 115p–118p range with little enthusiasm to pay any more than this, even for large loads.

The weaner market continues to improve in value but is still well below cost of production levels with the latest AHDB 30kg ex-farm weaner average quoted at 341.06p/head, but with less spare weaner availability this price could push ahead further between now and the end of the year, especially for 7kg weaners which possibly face a better outlook if finished pig prices live up to their forecast and improve next February/March to match falling European supplies following the partial stalls ban.

It will however be interesting to see to what extent the ban is enforced in some of the more lax European countries and perhaps it will be a case of "look away now" when the inspector calls?

On the feed front futures prices continue to creep ahead with the latest LIFFE wheat quote up by 32 to 3203.50/tonne and May 2013 at 3210.50/tonne.

If the pundits are right we may have seen the best of our finished pig prices this side of Christmas. A significant recovery will need to take place early next year because according to BPEX 3170p/kg deadweight still remains the breakeven point, whereas experience has shown most businesses need to actually make a profit rather than be content with standing still at a time when the pig industry is sorely in need of major re-investment.