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Stand-on for Some as Short Weeks Loom

by 5m Editor
4 April 2009, at 8:09am

UK - Another rewarding day for sellers, although some of the larger players did not need to venture far into the spot market as due to the short week they had enough contract pigs in the system to cover their pre-Easter requirements, writes Peter Crichton in his Traffic Lights commentary.

Although spot quotes were more inclined to be at stand-on levels after several weeks of significant improvements, contract prices have continued to move ahead with the GB Euro DAPP making further progress and rising to 144.57p compared with 114.90p this time last year.

Traffic Lights commentary

For those producers selling on DAPP-plus-4p contracts the gap between their returns and spot continues to narrow and may cross over soon.

Because of the shortage of pigs, one feature of the trade has been the willingness of several processors to increase their upper weight limits to 95/100kg on a 14 probe in an effort to attract extra weight through their plants. This now means that pigs at the heaviest end of the weight scale could touch 3150/head in value.

Most spot bacon pigs were traded in the 150–155p range, although some abattoirs on tighter specs were prepared to pay a penny or two more than this and the same applied to lighter pigs, although 160p probably represents a ceiling price for the cutter weights, but little incentive for farmers to sell at this level.

One shadow that continues to hover over the British pig market is the recent mini recovery in the value of sterling which closed higher on Friday reducing the value of the euro from 92.9p last week to 90.9p this week, which means that imported pigmeat will be around two percent cheaper.

An underlying feature of the trade however has been the overall shortage of pigs in the system and once the Easter and all the other Bank Holidays are out of the way, the signs are that supply will fail to match demand, especially when barbecues reappear on the nation’s patios.

Cull sow prices have yet to react to the fall in the value of the euro with most buyers operating at reluctant stand-on levels, but no evidence of any more money being put into the pot.

As a result cull sow quotes for smaller lots were circa 120p, but larger loads are worth a premium of 4–6p above this and no need for any sellers to accept less than 120p.

With weaner supplies continuing tight, in this market it is still very much a question of “name your price“ and whilst the AHDB 30kg ex-farm average has now risen to 352.16/head, it is relatively easy to earn premiums of 34- 36 higher than this in some regions.