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Help!

2nd Feb 2019 / By Peter Crichton

Some suggestions that prices may be bumping along the bottom of the current 'pig' trough but still a long way to go before producer prices get out of the red.

The SPP has held almost static at 138.71p and the influential German producer price has remained at similar levels for the 18thweek running at €1.36 (119.4p) but at least it’s held its value rather than dropping any further and perhaps we might see signs of slightly firmer EU prices emerging in the weeks ahead?

Closer to home however, UK pig demand has remained subdued and supplies still ahead of demand, with spot bacon traded in the 125-130p region in the main, although numbers remain very light with most pigs being sold on contract.

Weekly contribution contract prices were generally between stand-on and 1 pee off in the 125p-129p range.

An improvement in the value of the Euro which traded on Friday worth 87.78p compared with 86.73p a week earlier encouraged sow prices to lift to the tune of 1p/kg but they are still far too low at these levels due to indifferent Continental demand, with most traded in the 55-59p range. However, looking on the bright side (if there is one) producers will lose less money in February than January as it is a shorter month!

Demand for weaners remains highly selective and although the latest AHDB 7kg price lost ground again and now stands at £34.70, no comparison prices were available for 30kg weaners due to an insufficient sample. One off 30kg weaners remain hard to sell with a two-tier trade which saw RSPCA assured weaners in the £44-£48 range, but demand for Red Tractor 30kg weaners remains as cold as the weather, with prices reported to be in the £32-£35 range, but for the limited numbers on offer.

Grain prices have ended the week little changed, with UK spot wheat traded ex farm to average £168.20/t and futures prices at generally similar levels to last week, with London feed wheat quoted at £171.75/t for May, and £153.75/t for November. UK protein prices have eased as far as 48% soya is concerned, which traded down £4/t ex Liverpool at £306/t and 34% rape meal ex Kent has stood on at £206/t.

However, like many other sectors of the economy, the Brexit roller coaster situation has continued to cause currency volatility which at times has outweighed global market factors.

And finally, the chaotic Brexit situation continues to hog the headlines and UK pig meat import/export traders are saying there could be a haulage nightmare whether or not a deal is reached, especially if this also includes 'hard' borders in Ireland and worse than that, if cull sow exports to Europe are also subject to tariffs, with cull sow prices at their current level this will leave precious little for the farmer.

Some form of financial assistance would help and a 'welfare slaughter scheme' may have to be brought into play.

However, the pig industry very rarely receives any form of financial help and this could put a huge strain on pig breeders cash flows at a time when there is no margin in the first place, so in the words of the Fab Four, 'Help'.

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