Stand in the Gap
18th May 2019 / By Peter Crichton
With sharply rising EU pig meat prices, where the German quote is up by four euro cents to €1.80, which is equivalent to 156p/kg and a massive 14p/kg ahead of the latest SPP, which moved up by a relatively modest 1.26p to stand at 142.94p.
For those who struggle to do the maths, this represents a difference in value of £11.55 per bacon pig or £2,310 for a load of 200.
A massive void in Chinese pig numbers and despite sharply rising EU pig meat values, very little of this yet seems to have filtered through to the UK market.
Weekly contribution prices have also moved up with rises of between 1-3p which will help to put a smile on some producers lips.
Spot quotes for what is described as more of a trickle than a flood of bacon pigs have remained at similar levels of around the 150p mark but once the upcoming short week is over and the barbeques start to emerge on suburban patios, the signs are that the impact of much more expensive EU pig meat imports will start to make its presence felt on the domestic market.
Cull sow quotes have moved up by another 3p with some now reaching the 100p benchmark and the increase in the value of the Euro has also helped to nudge them in an upward direction, trading on Friday worth 87.4p compared with 86.3p a week ago.
Weaner prices are reflecting more of a shortage of supplies than was the case a few months ago with the latest AHDB 7kg ex farm average up by .43 pence at £35.73 but no averages are quoted by AHDB for 30kg which remain at previous levels of £46.02. Some weaner buyers are however getting a little wary over the possibility of rising straw costs unless we see some significant rainfall soon to swell yields of wheat and barley straw with harvest approaching.
On the feed front, although cereals are continuing to trade at similar rather flat levels, protein values are tending firmer but hopefully this will be more of a blip than a trend.
London grain futures are quoting feed wheat at £157/t for June and £145/t for September and barley looks particularly good value at £127/t for June and £132/t for September. Proteins on the other hand have moved ahead to some extent due to the value of sterling working against the soya market and Chicago soya closing at higher levels to the tune of £1.50/t with hi pro soya quoted at £289/t for June-October and at £297/t for November-April 20.
And finally, yes China remains the main topic of conversation with further news that the Chinese AG Min reported that their sow herd is down by 22% on a 12 month basis although some feel that this is understated and could be much higher according to regional reports, but global pork prices will continue to soar and to put the epidemic into context, there could be a 13m tonne shortage of pork in China in 2019 which is more than the total volume of pigs produced in the US.
Although chicken can replace some of the missing proteins, there is what is described as a massive under supply of pork in the world market at a time when the number of outbreaks of the disease is continuing to spread beyond China to Cambodia and Vietnam with other adjoining countries also at risk and the latest news is that an outbreak has now been confirmed in a Hong Kong abattoir.
A grim scenario for pig producers throughout Asia but yet another reason why the UK needs to step up its border controls (Brexit or not) to ensure that we don’t suffer a similar fate and this might also be a good time for producers to reinvest some of their margins in improving biosecurity on their farms and getting ready for the next slump which could be in around 4 years’ time if the pig cycle follows its normal route!