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160p/kg for the Right Types

by 5m Editor
6 June 2009, at 3:50pm

UK - Plenty of evidence that British pig supplies are on the tight side with contract buyers looking for extra numbers and prices in most sectors on the rise, writes Peter Crichton in this week's Traffic Lights commentary.

The Tulip base price went up by 0.5p, the DAPP put on 0.4p and now stands at 152.78p and spot quotes were anywhere between 1–3p higher than a week ago.

As a result prices up to 160p were available for lighter weights and most spot bacon was traded in the 153–156p range according to specification. One slightly negative factor recently has been an easing in the value of the euro, but recent events in Westminster seem to have wobbled sterling even more, helping the euro to stage a mini recovery from 86p mid-week to a close on Friday of circa 87.3p.

Any further revelations from behind the front door to No. 10 could also help to undermine sterling and add value to the euro, so at last we can thank the Labour Party for unintentionally helping the pig industry. On a more serious note however there is still no real sparkle in the European pigmeat market.

Reports from some of the larger German and Dutch sow and pig traders are indicating that their margins are under pressure, but it is not so much a case of increased supplies, but poor demand that is putting a lid on any price recovery which normally kicks in at around this time of year helped by barbecue demand.

British cull sow abattoirs remain short of volume and have had to hold their prices at similar levels to secure dwindling numbers with most bids circa 110p/kg, which after slaughtering and haulage costs is more than they are worth in Europe.

Weaner prices continue to reflect the overall pig shortage with the AHDB 30kg ex-farm average continuing to rise and now quoted at 357.30/head, but premiums of circa 32/head available from some northern buyers.

Feed wheat prices rose fairly sharply in the early part of the week, although some of the sting has now come out of the market with ex-farm wheat now quoted at 3114/tonne, but forward prices are 310- 315/tonne above this. Pig producers will be well advised to buy forward because if drought conditions continue and any of the major world markets pick up, we could see much higher feed prices in the year ahead.

Back to politics, and in was interesting to hear one commentator quote that the recent Cabinet defections have been a case of “sinking ships leaving the rat“ and no doubt at the moment our Prime Minister is out shopping for a nice pair of brown trousers and some strong bicycle clips!