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Be Careful What You Wish For

27th Apr 2019 / By Peter Crichton

Although the SPP only put on a modest 0.36p to stand at 138.67p and the influential German producer price has also held at last week’s levels, the UK spot market was a much more exciting place to be, with hot prices being offered after a much colder winter.

A steep price in Chinese pig meat values due to the ASF epidemic, which has hit the largest pig herd in the world, has meant that global pig meat prices are continuing to rise and this has finally started to filter through to the UK market.

Some pundits are suggesting that we could see UK values at around the 170p/kg mark towards the end of the year, which would make a pleasant change from the usual pattern at Christmas which is often the time to be giving rather than receiving!

Weekly contribution prices have generally moved ahead between 2p-3p, but still have a long way to go to catch up with the spot market, where pigs were scarce and wanted and deals in and around the 146p-150p region have been achieved in places. But as many will know the spot market is not for the faint-hearted!

Cull sow prices have remained at positive stand on levels with most culls trading either side of the 90p mark with the euro almost unchanged, trading at 86.29p on Friday, but this sector will also benefit from rises in global pig prices as well as an easing in the number of sows being culled in mainland Europe, now that there are clear signs of a major recovery in finished pig values.

The availability of weaners has gone from feast to famine with very few unsold lots, although the latest AHDB 7kg weaner piglet average slipped by 46p to £35.27/head and for the second week running there is no quotation for 30kg weaners due to an insufficient sample. Freedom Food 30kg weaners are now worth in excess of £50/head and their Red Tractor counterparts in the £45 region and now could be the time to fill those empty pens and take a punt on the buoyant nature of the pig industry in the months ahead.

Cereal prices have remained generally static with London feed wheat traded on the futures market for May delivery at £161.75p/t and November also a shade firmer at £145.60/t. Spot UK wheat is trading at £160/t ex farm.

UK protein values have slipped a touch with 48% soya traded ex Liverpool at £291/t and 34% rape meal easing to £188/t.

And finally, although it looks as though every cloud now has a silver lining as far as our pig industry is concerned, spare a thought for the Chinese where every single province has recorded ASF outbreaks across this vast country. It has also spread to Vietnam and Cambodia, with predictions that 80% of those pig farmers in China who have been slaughtered out are unlikely to go back into the industry.

However, reports are being received that large intensive chicken sheds are being put up at a rate of knots in China and with a much shorter poultry breeding and growth cycle, it could soon be a case of four legs bad, two legs good.

On the basis of every cloud having a silver lining, a meaningful hike in pig meat prices could work wonders for our hard-pressed industry and allow reinvestment and herd re-stocking to take place and remain efficient in the future and ready to face whatever may be round the corner.

On that note however, thank you to the NPA for their efforts in campaigning for government support to ensure that the risks of importing ASF in pig meat cannot be over emphasised. Even though we have a strip of water between us and mainland Europe, ASF is now a major problem in many parts of the world and continues to spread so greater public awareness is needed to avoid importing an ASF calamity into the UK.