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Trouble Ahead

8th Jun 2018 / By Peter Crichton

Another fairly positive day for sellers in all sectors, although cull sow prices still have a lot of catching up to do.

The latest SPP moved up by 1.20p to 149.37p and the influential German producer price also put on 3 Cents this week and now stands at €1.47, equivalent to 128p/kg in our money, but the gap between UK Red Tractor and EU mainland pigmeat prices is still too wide for comfort.

Most weekly contribution prices have remained at similar levels in the 142p-150p range and with the majority of pigs being sold on contract the spot market remains quiet and in most cases bids were in the 150p-156p/kg range, according to spec and who rings who first.

Cull sow values edged ahead a shade due to reports of slightly better demand for manufacturing grade pigmeat and although the Euro rose earlier in the week it traded on Friday worth 87.7p, which is almost exactly its value a week ago. As a result, most cull sow quotes were in the 64p – 67p/kg range.

There is still a two tier trade for weaners with some space for Freedom Food but very little for Red Tractor, underlining the continuing problem of a lack of suitable bacon finishing space in system with most units now either vertically integrated or tied up with bed and breakfast pigs.

No AHDB price was published for 30kg weaners this week due to an insufficient sample, but the week before these stood at £52.30/head. In addition, 7kg values eased a shade with the latest AHDB ex farm average at £37.70/head.

However, there may be trouble ahead as far as feed prices are concerned with UK spot ex farm feed wheat quoted at an average of £158/t compared with £139/t a year ago and the combine new crop UK wheat is reported to be trading in the £150/t region, but could go dearer.

UK proteins remain firm with 48% soyameal quoted ex Liverpool at £363/t and 34% rape meal ex Kent at £209/t. On the futures markets, London wheat is quoted at £155.70/t for next month, but rising to £161.20/t in November.

The old rule of thumb was that the price of pigmeat in pence per kilo should be higher than the equivalent price in £ per tonne of feed wheat but, unfortunately, it is starting to reverse itself and producers need to look long and hard at any opportunities to cover their feed costs on the futures market if the present trend continues.

And finally, the NPA is continuing to express its concerns over the lack of clarity in Defra’s approach to Brexit, which will hopefully not turn into 'Exit' as far as pig producers are concerned.

Disease is also a major problem in parts of Eastern Europe, with further outbreaks reported in Hungary and Romania on the Ukraine border, so the need to guard against this reaching our shores remains more vital than ever.

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