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More Buyers Than Sellers

by 5m Editor
17 January 2009, at 8:40am

UK - Although reports are continuing to filter through of slightly indifferent retail demand, spot prices have continued to improve mainly due to shrinking United Kingdom pig availability, writes Peter Crichton in his Traffic Lights commentary.

This follows higher infertility levels last summer and reflects the large numbers of sows that were slaughtered during the first six months of 2008 whose progeny pigs are no longer in the system.

The DAPP caught many traders by surprise this week by slipping a shade to 130.5p, but unless someone in the economics department presses the wrong knob, the signs are the DAPP will rise next week reflecting better spot quotes and a reduction in heavier pigs held up in the system over the Christmas period.

But the market remains overshadowed by reports of further falls in European Union pigmeat values which have been under pressure since Christmas.

Despite these negative factors most spot bacon was traded within the 137–140p range, but at this level foreign imports are starting to challenge the domestic market.

Other signs of easing European Union pigmeat values have been seen in the cull sow market where export abattoir quotes moved down fairly sharply this week by anywhere between 3–6p according to specification with quotes generally in the 114–117p range, which after slaughtering and transports costs are still ahead of equivalent European Union values.

Hopefully the € will continue to hold its current value which remains in the 89p region, as any further falls will work against the interests of the United Kingdom pig industry.

Probably the most active sector has been the weaner market where further falls in output have put finishers under pressure to fill empty units and saw the AHDB 30kg ex-farm weaner average move up again from £45.10/head last week to £45.46/head.

Another positive note is that after several weeks of fairly significant increases feed wheat prices appear to have stabilised at just above £100/tonne on an ex-farm basis, although forward quotes for the second half of the year are tending to be reported in the £117-£125/tonne region.

Despite concerns over the European situation the overall picture is much more positive for United Kingdom producers than normal at this time of the year and we are all eagerly awaiting the Jamie Oliver pig programme at the end of the month to see if this helps or hinders the industry as a whole.