A hard road...
6th Oct 2018 / By Peter Crichton
Not too many positives as far as the UK pig industry is concerned with the SPP continuing on its downward track losing another 0.47p to stand at 147.21p.
Although there were reports that German prices might also ease at the end of the day they managed to stand on but the same cannot be said for UK weekly contribution prices which in many cases eased back by a copper or two and are now within the general 132-137p range.
There have also been recent significant falls in forward quarterly prices but these might well be worth taking unless in the next three months we see a price revival.
The spot market remains very quiet with high street fresh meat trade under pressure and consumer demand seems to be wilting to some extent. One off spot loads of bacon pigs could do well to achieve 140p but with regular spot sellers achieving premiums of 4-6p above this in most cases.
Falls in the value of the Euro did nothing to help which traded on Friday worth 88.2p compared to 88.8p a week ago and as a result cull sow export values dropped by around 1p with most now between 64-67p/kg.
Weaners continue their roller coaster ride with the latest AHDB 30kg average dropping by £3.29 to £51.57 but 7kg piglets on the other hand went up in value by £2.82 to £37.32.
Red Tractor spot weaners however proved to be almost impossible to sell with prices being quoted for recent trades where space was available as low as £35 per 30kg weaner which is less in some cases than the value of 7kg piglets on contract but once again producers are advised to check the small print on their weaner contracts and keep them in a safe place!
The grain market is also doing no favours for producers’ margins with the latest UK feed wheat spot ex farm average firmer at £172.80 and futures prices are also hardening with London feed wheat quoted at £178/t for November, £181.95/t for March and an eye watering £184.30 for July.
UK protein prices have however held at similar levels with 48% soya quoted at £318/t and rapeseed at £217/t.
And finally, the industry is sadly back in a situation where producers are between a rock and a hard place and although there are opportunities to sign up to fixed price quarterly slaughter pig contracts in most cases these will be below COP levels but having said that, at least they provide something of an insurance policy if prices drift lower over the same period – a case of damned if you do and damned if you don’t but no doubt bank managers will be keeping their beady eye on overdraft levels just to add to the pressure the industry has to face in the hard road ahead.
Apologies for the negative tone of this report but it is difficult to find many plus points unless we look ahead to early next year, if there is a recovery in 2019, with the Brexit year ahead….we shall see.