Don't Bring me Down
2nd Dec 2017 / By Peter Crichton
Although the influential German producer price has remained at 1.45 EUR for the 6th week running, unfortunately UK producer prices continue to head south with the SPP losing 0.42p to 153.24p compared with the dizzy heights of 164.75p in early August.
Weekly contribution prices also took their cue from falling prices and dropped by between 1p and 3p/kg. The spot market was also not a place for the faint hearted with bids in the 140p region where space was available.
On a more positive note however, some fairly large numbers of slaughter pigs have been handled over the past two weeks and if the present spell of cold weather continues, this might help to stimulate human appetites for 'meat and three veg' and slow pig growth rates down a little.
Despite European prices holding at similar levels, unfortunately a significant reduction in the value of the Euro which traded today (Friday) worth 98.11p compared with 89.03p seven days earlier, contrived to drop cull sow prices by yet another 1p, with most trading at 70-72p region. This means that the average cull sow is struggling to be worth more than £100 and it now takes at least three cull sows to buy two replacement gilts, but it would be false economy not to keep replacing worn out breeding sows just because the cull sow price is in the doldrums. As we all know, a poor quality unproductive sow eats just as much as a good one!
Although the latest AHDB weaner averages have held at similar levels with the 30kg average at £56.07/head and 7kg at £41.25/head, it is much harder to find spot buyers especially for Red Tractor rather than Freedom Food weaners, which appear to be left out in the cold for the time being. But, as advised last week, keep those weaner contracts in a safe place if you are a seller.
As far as feed prices are concerned, grain markets fell slightly last week with very little movement in UK and European futures but lower than anticipated US wheat export sales put a slight spike in the market which may feed through to futures prices in the weeks ahead. UK LIFFE feed wheat traded for January at £138.30/t with May quoted at £141.50/t. UK protein prices were up by around £10/t with 48% soya meal ex Liverpool traded in late November at £309/t and 34% rape meal was also firmer at £170/t.
And finally, with straw prices continuing to rise and reports of ex farm values in the West Country of around £85/t and East Anglia in the £65/t region. Even though Guy Fawkes day is now behind us, producers should check their levels of fire insurance cover because on a delivered basis they could be looking at replacement costs of well over £100/t with reports from Ireland that straw is worth as much as wheat on a per tonne basis.
Another reason why Freedom Food producers all need the extra premium for their pigs.
PS - Apologies for those of you who may not have received recent pig commentaries from me due to a Temporary Information Technology (TIT) malfunction. Hopefully this is now cured but if not my commentary also appears on my website www.petercrichton.co.uk every Friday afternoon.