Another big leap in pig price but record costs hit margins

The EU-spec SPP rose by more than 2p last week to top 155p/kg, although record production costs continue to hit margins. 

The SPP has now risen for 12 consecutive weeks, and, although it is still 9.42p behind where it was a year ago, it is now 6.5p up on the five-year average. 

Estimated slaughter at GB abattoirs was down 4% on the week at 173,000, but up 12% on the same week a year ago. The latest reporting week included the late May bank holiday.

Average carcase weights stood-on from the week before, at 86.46kg. This is 2kg heavier than the same week a year ago.

The EU-spec APP up another 1.33p to 156.55p/kg in the week ending May 29, widening the gap between the APP and the SPP for the same week to 3.76p.

In the week ending June 5, 7kg weaners averaged £37.74/head. This was down £4.79 on the price achieved for the same week a year ago and down 56p on the five-year average for the same week.

To see the Pig World weekly price graphs, click here

However, costs remain uncomfortably high, following the average loss of £26/pig recored across the industry in Q1 due to record average costs of 174p/kg, with soaring feed costs accounting for 117p of that, 67% of the total. 

While the pig price has improved steadily during the current quarter, costs haven't - wheat and barley remain at the £190-£200 tonne mark, with soya in excess of £350/tonne. 

The UK wheat harvest is forecast to be higher for 2021, although there are no immediate signs of costs coming down, according to AHDB. 

In its latest weekly market update, TVC said the continued disruption of foreign travel and increase in people enjoying staycations has further bolstered retail demand, while the start of summer sporting events and the easing of lockdown 'gives you all the ingredients for great trade'. 

But it said processors needed to increase prices further and faster to avoid an exodus from the industry, given the current cost situation.