In the Summertime
12th May 2018 / By Peter Crichton
The recent period of proper summer weather has come as a welcome relief and has also helped to stimulate barbecue demand after a long wet winter and spring.
The SPP has moved up by a significant 0.8p to 146.62p and weekly contribution prices were also trending firmer with rises of up to 2p/kg in places.
Spot buyers were also looking for (rather than at) pigs, with bids in the 150p region quoted and it’s good to see that spot prices are now level pegging with contract in many cases. But with feed costs on the rise, producers will need to watch every penny to maintain their margins.
Unfortunately the sow market is not displaying any buoyancy, although it is something of a relief that this week German prices stood on – however, this is still at a very low level with UK cull sow exporters bidding in the 60-63p range. This time a year ago cull sows were being marketed at 106p/kg which for a 150kg deadweight sow works out at a value drop of £66/head!
Hopefully with better weather across northern Europe, alfresco eating will push up pig meat demand but with the Russian/UK pig meat import embargo in place it is difficult to see if there will be any World Cup boost as far as pig meat demand is concerned. Looking further ahead it is even more difficult to see how there will be any pig meat benefits in 2022 when the World Cup moves to Quatar!
The wide gap between Freedom Food and Red Tractor weaners remains in place and, although the latest AHDB 30kg average looks a reasonably healthy £52.79/head and the 7kg price has also moved up £1.46 to £37.38, it is difficult to find many takers with space.
Not only are producers having to keep an eye on rising feed costs, but the price of straw has gone through the roof with reports in East Anglia of straw trading on an ex-farm basis between £90-£120/t and in the north and west at considerably higher levels. This has put a brake on some finishers filling yards because straw is extremely scarce even if you can afford to buy it in the first place.
Feed prices are also heading north with 48% soya meal traded ex-Liverpool at £385/t and UK spot ex-farm feed wheat is still on the rise with average spot sales quoted at £151.80/t. There is a saying that 'wheat follows oil' and this is underlined by reports that there has been more upward pressure on wheat prices in global markets, with London wheat quoted for July at £148.20/t and November at £152.50/t at a time when crude oil prices are rising following the US/Iran embargo.
With feed costs forming 60% of the cost of rearing pigs, further increases in this sector will start to cast a shadow over the profitability of UK pig prices unless ours keep pace too.
And finally more concern over African swine fever was highlighted in the media this week underlining the threats posed by the Forest of Dean wild boar population and reports of African swine fever spreading at an alarming rate across Europe starting from Russia and now posing a major threat in parts of Eastern and Central Europe.
Closer to home, the main worry is that feral pigs in the UK will be accessing barbecue sites and getting into waste bins increasing the risk of potential ASF contamination.
Perhaps we need to check on the sources of all the pig meat being fed to visitors at the Pig and Poultry Fair next week and 'Buy British'?