The Big Deal - Peter Crichton commentary
26th Dec 2020 / By Peter Crichton
At the time of preparing this commentary breaking news suggests that, after four years of discussions, terms for the departure of the UK from the EU may have been agreed, much to the relief of many involved in the pig industry.
The two sides have just seven days to get any deal formally agreed in Brussels and London. Although the devil may well be in the detail, at least some of the uncertainty facing the UK pig industry has been lifted.
In the meantime however, the problems posed by ASF, Covid and the challenges to abattoirs, meat processors and producers remains.
In Chinese terms 2020 is the year of the Rat but in the UK it has also been a Pig of a Year.
The latest SPP has fallen yet again and lost 0.77p this week to stand at 148.49p for the year just ending, which is its lowest level since June 2019.
Weekly contribution prices remain in negative territory mainly standing on between 134p and 137p and are on average around 10p/kg below the SPP, with most weekly prices going down faster than they went up, surprise, surprise in the words of Cilla Black (RIP).
Despite haulage disruptions in the Channel ports restricting pig meat supplies, as yet no panic buying has led to empty shelves of home produced pig meat pushing up the price.
As a result spot bacon quotes have remained generally static, but like last week, fewer pigs have been rolled although some of the large processors have plenty of pig meat in store to draw down on over the next few weeks but several of the smaller fresh meat abattoirs have had a good retail demand and their chiller cabinets are virtually empty over the Christmas period.
Spot bacon demand is holding around the 130p mark. Cull sow prices have yet to react to the Brexit news but were trading in the 40p/kg region beforehand and are forecast to stand on when slaughtering resumes after Christmas. The Euro has however weakened due to a stronger pound and is currently worth 89.75p.
Weaner prices continue to fall in line with the decline of the SPP, with the latest AHDB 7kg ex-farm average of £39.29p. No 30kg average price has been quoted for this week but spot trades have been in the £52 region.
Feed prices continue to rise putting up COP levels yet again, with UK feed wheat traded at £204/t for January 21 and £159/t for September 21. Barley remains better value at £152/t for January 21. Spot ex- farm wheat deals have been in the £186 region.
Soya prices continue to head north with UK delivered Hi-Pro Soya quoted at £417 for January 21 and £381 for June-October 21, due to higher global protein prices and stronger demand from the Chinese to feed their growing post-ASF national pig herd.
And finally, assuming that the Brexit deal is signed off, the EU have granted Third Country status to the UK which will allow the export of meat including pork to continue.
However, the meat industry have warned of further port delays over the issuing of Export Health Certificates (EHC) signed by vets who are in short supply and there have been calls for a further 1 year “orientation” period along with the Transition period to introduce a series of gradual changes to the new import/export systems.
All in all much still to be done in the new 'future' facing the whole UK pig industry.
And finally finally, we can rejoice in the news that Nigella Lawson intended to have pork rather than turkey as her Christmas dish!