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What Will The New Year Bring?

30th Dec 2017 / By Peter Crichton

More questions than answers as far as next year is concerned, but that is nothing new for many of us. 

With the latest SPP and AHDB prices yet to be announced, a certain amount of guesswork is involved, but hopefully the three year comparison in the table below makes interesting reading. 

The current SPP remains at 151p and weekly contribution prices have, in some cases, shed a penny and others have stood on with most in the 141p – 143p/kg range plus the usual Red Tractor and Freedom Food premiums. 

The spot market remains very much like the weather (cold and miserable) with fresh meat demand reported to be 'fickle' (or something that sounds like that!). Although regular spot sellers could expect to receive prices in the 140p – 145p/kg bracket, one off sellers of surplus bacon pigs might find it difficult to secure bids of much more than 138p/kg, assuming space was available. 

One positive note is that the influential German producer price stood on at 1.37 EUR, which is equivalent to 122p in real money. 

Cull sow prices have remained at generally similar dismal levels with most traded in the 63p – 66p/kg region, but are still some 30% less than their value a year ago, but underline just how much EU wide pigmeat prices have fallen over the past year. 

Grain and protein prices have remained generally unchanged over the holiday period with UK feed wheat traded on the LIFFE exchange at £136.25/t for January and £143.95/t for July, but clearer market trends will emerge once the Christmas break is over. Reports of above average rainfall in areas of South America may lead to more bearish trends in the short term, but the cereal and protein markets will remain weather and currency dependant in the coming months. 

And finally, those of you who like looking at figures, the following three year price statistics make fairly interesting reading. Providing they stay at these levels and before the effects of Brexit start to bite in 2019, our industry should face a reasonably positive future next year; providing the old rule of thumb pence per kilo price for bacon pigs stays ahead of the pound per tonne value of feed wheat. 

  December 2015 December 2016 December 2017
SPP 123.6p 151.8p 151
Cull sow 51.07 89.75p 65.3p
AHDB 7kg/head £31.11 £38.48 £40.62
AHDB 30kg/head £40.89 £53.51 £51.61
Feed wheat  £103.60 £133.50 135.80
Euro 73.40p 85.29p 88.66p