You Can't Always Get What You Want
25th Oct 2019 / By Peter Crichton
Mixed messages from the market place as far as pig meat values are concerned. Although the SPP has continued to rally, rising by another 1.15p to stand at 156.92, the influential German producer price has remained unchanged since August 21, which is to some extent, slightly closing the gap between EU mainland and UK prices.
Domestic demand is reported to be fickle (or a word that sounds rather like that) but with more abattoirs obtaining China export licences we are fortunate, unlike the Chinese industry, to be able to benefit from the massive shortage of pig meat in Asia and adjoining countries and Chinese ASF losses are reported by industry sources to be much higher than the 35% which had previously been suggested.
Weekly contribution prices have in the main remained at similar levels, mainly between 151p-157p, with the odd penny being put in here and there, but with extra pigs now coming forwards there is nothing to stimulate any significant pre- Christmas price rises on this side of the Channel.
UK spot bacon trade remains selective, with quotations between 156p-160p in the main according to spec, but as with contract pigs, not a great deal of enthusiasm from buyers.
Despite all of the recent political shenanigans, the euro has ended the week worth 86.59p, only marginally firmer than its value seven days ago and in the light of virtually static German pig meat prices, UK cull sow quotes pigs have remained at stehen auf (stand on, for the benefit of those who don’t yet speak German), with the result that most UK cull sows were traded between 105p-110p.
Weaner values are marginally dearer, with the latest AHDB 30kg ex farm average up by a modest 11p to £40.09 but still no quotation for 30kg weaners and most have been trading at £12-£15 above their 7kg counterparts.
Feed ingredient values have also remained at generally similar levels, with UK spot wheat sold ex farm averaging £128.60/t compared with UK futures prices of £139/t for November feed wheat and £148/t for September 2020 wheat. Feed barley is trading at £12 discount when compared with wheat, with November futures at £127/t and September 2020 at £136/t.
Proteins have eased very slightly in value, with Hipro soya meal for November-April 2020 forward deals being done at £295/t and £301/t for Hipro soya between May-October 2020.
Further afield, large global grain and protein supplies are tending to put a lid on world commodity prices which is encouraging as far as pig producers are concerned, but the currency markets remain jittery and are likely to do so until Barking Boris can come up with a solution to the current impasse as far as our exit from the EU is concerned, which could be a case of should we jump or will we be pushed, to which the answer could be “we fell”.
And finally, still on the subject of Brexit, it looks as though as a result of the parliamentary rejection of Boris’s fast track Withdrawal Agreement Bill, that the UK cannot leave the EU by his 'rather die in a ditch' October 31 deadline.
It seems that there is no quick fix to a whole host of parliamentary manoeuvres and no real clear water in the choppy seas ahead, or any indications of whether or not UK pig meat prices are likely to drop to WTO levels, which could have us all running for cover.