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What an Excellent Start to the Year!

by 5m Editor
3 January 2009, at 5:41am

UK - An excellent start to the New Year for a whole host of reasons, writes Peter Crichton.

These include further falls in the size of the United Kingdom pig herd which will no doubt be confirmed when the December 2008 census results are announced, coupled with conception rate problems last summer which are already hitting slaughter pig availability.

The record value of the euro which at 96p is now worth 32 per cent more than it was a year ago has effectively put up the cost of pigmeat imports by that amount and has lifted the United Kingdom pig base price back to levels at which producers can hope to make a reasonable return in the year ahead.

Although a number of the smaller fresh meat wholesalers commented that retail demand had not been particularly strong, some of the larger bacon abattoirs were looking to re-fill supermarket shelves are also upping their kill numbers putting more pressure on dwindling supplies.

As a result spot bacon quotes which opened circa 130–132p put on 2–3p with some outlets as the day progressed.

Lighter cutter weight pigs were achieving a modest 4– 6p/kg premium above bacon, but the best is yet to come in this sector.

The soaring euro also continues to benefit the cull sow market where most bidders were offering 120p+ and no real need to sell at less than this figure.

One of the downsides of the weakness of sterling is that grain prices are starting to move ahead and ex-farm feed wheat quotes are now in the £96-£100/tonne range which is £20/t up from the bottom of the market last year.

Although grain stocks are reported to be relatively high speculative buying is tending to drive the market ahead, but producers are still advised to get some cover in place as something of an insurance policy.

The weaner price is also on the move although the latest AHDB 30kg ex-farm quote of £43.74/head is generally £2-£3 behind recent transactions. As spring approaches a £50 weaner could become a reality.

To put half a smile on producers’ faces a comparison of January prices follows below:

DAPP Spot Bacon
Base Price
Average Sow Price Weaner Price per Head Feed Wheat
(ex farm)
January 2008 110.63p 97p/kg 74.57p 67p/kg £31.21 £166 - £170/t
January 2009 131.23p 133p/kg 96.00p 121p/kg £43.74 £96 - £100/t