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Another Good Day for Sellers

by 5m Editor
9 May 2009, at 8:54am

UK - With the delectable (and vegetarian) Joanna Lumley now hogging the front pages, "swine flu" seems to have been ousted from the media spotlight and hopefully this trend will continue in the weeks ahead, writes Peter Crichton in this week's Traffic Lights commentary.

The DAPP also maintained its steady upward progress and now stands at a new high of 150.25p which represents a 15 percent rise since the start of the year.

As a result contract base prices moved ahead and Tulip also added 1p to their base price, so producers selling on DAPP+4p contracts are now receiving close to 155p similar to spot bacon quotes.

Some of the smaller fresh meat wholesalers were also reported to be more active in the market and short of lighter weights, due to much more attractive heavy pig contracts available, some of which are paying producers for up to 95/100kg deadweight on a 14 probe and well worth looking at.

One word of warning however relates to the European market where pigmeat prices remain under pressure. Reports are being received of larger volumes of imports heading this way, some of which are able to undercut the domestic market by up to 20p/kg.

As always the value (or otherwise) of the euro remains a key factor for the whole of the United Kingdom pig industry.

The recent mini rally in the FTSE index which now stands at around 4,400 compared with 3,800 a couple of weeks ago may strengthen the pound and in turn push down the value of the euro, which on Friday closed worth 89.3p.

Any reductions in the value of the euro will cheapen foreign imports and make our cull sows harder to sell on the continent.

Cull sow prices have also taken a bit of a knock in Europe due to the difficulty of penetrating the Russian market and ongoing fears in connection with "swine flu", as well as tight processing margins.

But as it turned out falls in cull sow values were generally no more than 2–4p, although bigger drops would have occurred if numbers on this side of the Channel were not so scarce.

The weaner market continues to maintain recent gains with the AHDB 30kg ex-farm average of £55.44/head still £2–£4 behind recent trades.

All in all a generally good day for sellers and with warmer weather ahead, barbeque demand should help to fuel the market still further.