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China in Your Hand?

26th Jan 2019 / By Peter Crichton

Another difficult day as far as the UK pig industry is concerned with prices still in retreat on this side of the Channel, although the influential German producer price stood on for the 18th week running, but at a miserly low level equivalent to 118p in our money.

The SPP continues to head south and dropped by another 0.71p this week to stand (or possibly lie down) at 138.78p compared with 148.25p a year ago, when a tonne of wheat only cost £135 compared with around £170 today.

Weekly contribution prices have also remained in retreat, with falls mainly between 1p-3p.but an even colder wind is blowing through the spot market at present with very little demand hitting prices hard and virtually no space for “rolled” pigs remains available, with the result that spot quotes of less than 130p were reported and weights keep going up.

Despite all the Brexit uncertainty, for some reason that is hard to fathom the pound has continued to gain in strength which has hit the value of the euro trading on Friday worth 86.73p compared with 88.12p 7 days ago.

As a result, despite German prices holding steady cull sow quotes came back another penny due to the weaker Euro with cull sows now only worth a stingy 55-58p. This means for anyone tempted to head for the exit (not Brexit) door and leave the industry, an average cull sow is worth little more than £70 per head.

Although there were reported to be one or two more buyers tentatively looking for spot weaners despite the gloomy outlook for finished pig prices, quotes being tendered were very low and far behind COP levels. The latest AHDB average prices which mainly comprise pigs sold on contract, saw the 30kg average drop £3.68 to £43.91 and the 7kg price also fell by £1.40 to £35.56.

Unfortunately weaner finishing is rather like horse racing, something of a gamble but a lot less fun.

Feed prices are holding at generally static levels but wheat is still £40 a tonne more than it was worth a year ago with London wheat traded at £171.10/t, July at £174.15/t and the only glimmer of sunlight relates to longer months with November ‘19 quoted at £154.90/t and November ’20 £155.25/t. Ex-farm UK spot wheat trades are averaging £167.20/t.

UK protein prices have however eased a touch with 48% soya quoted ex Liverpool at £310/t and 34% rape meal ex Kent at £206/t although strong export demand has caused a lift in feed bean prices and could soon filter through to the soya and rape seed markets.

And finally despite all the doom and gloom surrounding the pig industry it is good to read reports that during November 2018 UK exports of fresh/frozen pork continued to improve and were up 5% on the year, reaching a total of 19,500 tonnes.

Exports to China continue to lead the way and are quoted to be up by 81% over the 12 month period and with reports that African Swine Fever is still far from under control this could result in more export business being done in the land of sweet and sour pork but not if we are unlucky enough to catch ASF in the UK, although it is refreshing to know that the media have picked up on the potential ASF risk and well done to the NPA and Zoe for getting airtime on a recent Countryfile programme to highlight this.