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Autumn Rally Beginning to Look Elusive

by 5m Editor
12 September 2009, at 12:42pm

UK - A slightly underwhelming day for pig traders with limited space available on the spot market, writes Peter Crichton.

Where there were takers, bids around 140p/kg were available for heavy bacon on a 14-probe, although some useful premiums for lighter weights and on a tighter spec in some regions.

Contract prices are continuing to ease and the DAPP took a fairly significant downward step this week falling from 152p to 150.56p.

Since late July the DAPP has dropped by 5p ( 33.50- 34/pig) and although many sellers would have given their right arm and parts of the left one at the start of the year for prices at these levels, some signs are emerging that there is unlikely to be the normal autumn price rally and we may have to wait until the spring before demand takes off again.

One of the main problems facing the pig industry (and it will get worse) is lack of competition, with the market dominated by four major retailers who can quite easily turn the supply tap on and off at will, especially if they have access to cheaper European Union imports, which is currently the case.

European pig traders are reporting falling prices in many of the mainland European Union pig production countries, but hopefully this will turn out to be a blip rather than a trend.

Negative European Union mainland prices are also starting to filter through to the cull sow market where prices dropped 2–4p, but in some cases these falls still put United Kingdom prices well ahead of what can be earned selling sows onto the continental market.

Cull sow bids on Friday tended to be in the 113–115p range for smaller loads with sellers of larger lots still able to command a 3–5p premium above this reflecting an underlying shortage of cull sows.

A quick glance at the United Kingdom herd census results for the last ten years (below) underlines just how much the breeding herd has shrunk and the associated shortage of export cull sows with excess slaughter capacity chasing fewer numbers.

As always currency values play a big part in influencing not only the price of imported pigmeat, but also cull sow quotes and this week the euro closed on Friday worth 87.4p, which is almost exactly where it was seven days ago.

Weaner prices continue to reflect a slightly sober view of finished pig prices in early December and the AHDB 30kg ex-farm quote continues to drift downwards and now stands at 353.25/head.

Looking on the bright side however, feed prices are still at relatively low levels and the PCV2 vaccines have worked wonders in terms of mortality and growth rates with PMWS/PDNS becoming almost a thing of the past.

The industry remains haunted however by the threat of swine dysentery which is still rumbling in the eastern and northern counties as well as reports of a new form of what is known in Cockney rhyming slang as the threpenny bits (proper name Neonatal Diarrhea Syndrome) which is a pig killer and despite microbiological testing, no signs have yet been found of the causes - another reason for all pig finishers to steer clear of importing weaners which could have disastrous consequences for the health of the British pig herd in return for trying to save a few bob.