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Still a Fairly Long Way for Producers

by 5m Editor
25 April 2009, at 8:16am

UK - Another very worthwhile trading day for sellers and although the May Bank Holiday will soon be knocking another slaughtering day out of the system, this had little overall effect on demand, according to Peter Crichton.

The DAPP continues to move ahead and now stands at 148.3p, but for those statisticians wondering if this is a new peak, the highest ever index price was on the 13 July 1996 when the AESA (now the DAPP) hit 155.1p.

But before pig producers get too excited and start ordering new shovels, in real terms and based on the RPI, 155p in 1996 converts to 210p now, so we still have a fair way to go.

Because of the upcoming short week supply and demand was more or less in balance with most spot quotes in the 153–157p range according to spec and with a few barbecues now appearing on the nation’s patios, signs of demand for fresh pork could move ahead still further in the weeks ahead.

A slight improvement in the value of the euro has also helped to redress the pigmeat import/export balance probably reflecting the electorates’ cynicism over last Wednesday’s non event of a Budget presented by ‘call me Darling’ and a lack of any real investor faith in the value of sterling.

A week earlier the euro stood at 88.2p so this mini rise will also help to maintain cull sow quotes which were generally above 120p with large loads worth circa 124p in some regions, but German public holidays next week are also reducing killing/processing capacity.

Weaner prices continue to improve reflecting better finisher margins and the relative cheapness of feed wheat which is currently traded at little more than £100/tonne ex-farm, although some signs are emerging of firmer demand once the remainder of the 2008 harvest backlog has been cleared out of the system.

As a result the AHDB 30kg ex-farm weaner average is now quoted at £54.68/head, but there is still plenty of evidence of private sales at £2-£4 above this, especially from oop North.