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There'll be More Good Days Like This, Euro Willing

by 5m Editor
21 February 2009, at 8:36am

UK - Another good day for sellers although prices tended to be closer to stand on than push on and in horse racing terms some of yesterday’s front runners tended to be back on the bridle today with the result that it was quite hard to reel in the odd 150p quotes that were rumored to have been made and most spot based bacon prices tended to be in the 146p region with some variations according to region and specification, writes Peter Crichton in this week's Traffic Lights commentary.

But later in the day a few of these front runners came back into the fray.

The DAPP also helped to improve contract price returns and now stands at 136.4p, but a DAPP plus 4p bid remains some 5p–8p adrift of the spot market, although the gap may be closing slightly.

Many large scale buyers and sellers are watching the currency markets like hawks as these may well dictate any further price movements in the week ahead and although the € looked as though it was losing value early on this week, it closed on Friday worth circa 88p.

As a result cull sow quotes remained at generally stand on levels with 114p widely quoted as base price and modest premiums available for larger loads.

The weaner market continues to reflect a major shortage of progeny pigs in the system following on from a combination of summer infertility and the numbers of sows that were slaughtered early in 2008, which are no longer part of the production chain.

Further evidence to back this up has been provided by reports of much longer gaps between emptying and filling contract rearing and finishing units and for the first time for many years there is more space available in this sector. Unless pig numbers recover, some of the poorer performing contract sites may have to be closed down.

The wide gap between the spot and contract finisher prices is also being reflected in the weaner market and although this week’s AHDB 30kg ex farm weaner price of 348/head has jumped up by 31.10, spot quotes well ahead of 350/head are now being reported with circa 355 being achieved in some regions.

Provided that finished pig returns do not flop in 12 week’s time, even though weaners look eye wateringly dear, if they stay healthy and grow well a reasonable margin can be earned and probably better than when weaners cost 335/head, but baconers only came to 380/head.