Peter Crichton commentary - Death and taxes...
13th Apr 2017 / By Peter Crichton
More of a ‘stand on’ feeling in the air as we approach the Easter bank holiday weekend, but demand remains firm from end to end, so no real worries on the price front as far as producers are concerned.
The SPP continues its relentless rise and put on a further 1.34p to stand at 154.47p, although most weekly contribution prices remained unchanged.
Once again, very few ‘spare’ spot pigs were available, but where they were, prices in the 158p-160p/kg region were achieved.
EU mainland prices have also tended to hold at similar levels to last week with the influential German producer price remaining unchanged.
Cull sow prices were anywhere between a penny off and stand on, depending on load size, but the price reduction was more due to the euro losing value with no fundamental changes in European pig prices. The euro was trading on Thursday afternoon at 84.85p, compared with 85.54p six days ago, representing a drop in value of almost 1%.
Most sow prices were therefore in the 102p-104p/kg range, although, as usual, those with large loads were able to haggle an extra copper or two in places.
The weaner market continues to reflect the ongoing shortage of pigs in the system with the latest AHDB ex-farm 30kg average rising to £59.08/head and 7kg piglets within a whisker of £40 at £39.38/head. But spot prices are still well ahead of their contract counterparts in what can only be described as a ‘short’ market with more buyers than sellers.
Grain prices have continued to edge upwards with feed wheat quoted on the LIFFE market for May delivery at £148.75/t and for November at £139/t.
And finally, there are only two certainties in life; death and taxes and now might be the time for some producers who are restoring their bank balances on the back of better pig prices to consider reinvestment, which is sorely needed in some units, or to replace elderly sows with gilts, especially in view of the much better balance between cull sow prices and gilt costs than previously.
But we are still far away from those days when one cull sow could buy a gilt with some spare change but, as the old saying goes, ‘you have got to give if you want to gather’.
It seems a pity to make the Exchequer a free gift when there are opportunities to reinvest and the industry would be better placed to resist future financial challenges which, no doubt, may have to be faced in the future, not to mention Brexit!