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SPP down another 2p as average weights reach record high

14th Jan 2021 / By Alistair Driver

The latest weekly market update from AHDB highlights the difficult market conditions we are now operating in. 

Prices were down by another 2p last week, the biggest weekly drop in five years. The EU-spec SPP averaged 144.74p/kg and, following largest week-on-week decline since January 2016, is now 17.66p below the same week in the previous year. However, it remains slightly above the 5-year average.

GB pig prices jan

Meanwhile, carcase weights continued to rise, averaging more than 90kg for the first time on record, reflecting the continuing problems at pork plants, which are causing pigs to remain om farm for longer than would usually be the case. The average figure of 90.42kg was 560g up on the previous week. This was almost 4kg higher than last year.

Estimated slaughter continued to pick up following the shorter kill weeks over the holiday period. Throughputs totalled 173,400 head, 38,600 head more than in the previous week - however, slaughterings remain around 5% lower than in the same week last year.

You can view the average weekly price graphs HERE

In his weekly market comment at the end of last week, Peter Crichton said the spot bacon trade is virtually non-existent. For those producers unlucky enough to have additional pigs which must be cleared, prices are unlikely to be any better than 120p, though regular sellers should be closer to 130p, he added.

"Although German producer prices have held for the last six weeks at 1.19 EUR, in sterling terms this works out at no more than 106p/kg, which explains why foreign imports are continuing to undercut domestic prices by a country mile. At least the value of the Euro has held at similar levels on the week, trading on Friday at 89.9p," he said.

Cull sow prices have 'collapsed' and cull sow deals have 'dried up to a trickle and are nowhere near their pre-Christmas value two weeks ago', he added. This is due to the additional post Brexit paperwork and bureaucracy involved in exports coupled with the challenge for some of the larger EU abattoirs in meeting COVID regulations in terms of working space. 

Weaner prices continue to reflect falling pig meat values across the board and the latest AHDB 7kg average of £38.52/head last week was well ahead of spot trades. However, in the case of Red Tractor pigs, it is difficult to find buyers other than at knock down prices, he said. 

AHDB said the data was not rubust enough for 7kg and 30kg weaners for the week ending January 9.

Straw and feed prices

"The soaring cost of straw which is changing hands at around £100/tonne is also adding to producers’ problems and red ink bank statements, with usage rates on the high side following on from the recent periods of wet weather and forecasts of more to come," Mr Crichton added.

In addition, sky high feed prices are continuing to add to cost levels with UK feed wheat traded at £210/t for February and £166/t for September.

Feed barley prices have also followed this upward trend trading at £162/t for February. Just to add to the pain, protein costs have also soared, with Hipro soya traded for February at £428/t.

"Reports of below average rainfall in South America and speculative demand pushing up prices are also underlining that dearer feed costs will have to be faced in the months ahead in what is already a very troubled New Year," Mr Crichton said.