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Supplies Will Tighten Soon

by 5m Editor
26 September 2009, at 9:24am

Despite the surging euro which during the last seven days has risen in value from 90.4p to almost 92p, little of the benefit seems to have filtered through to the United Kingdom pig market yet, writes Peter Crichton in his Traffic Lights commentary.

The DAPP took a medium-sized downward step this week to 149.49p compared with 150.55p seven days ago.

This represents a drop of 4 percent over the last eight weeks, but it is still many times better than its position a year ago when the DAPP stood at a modest 135.92p.

Although there is no doubt that the recent rise in the value of the euro has put up the cost of imports, this comes at a time when European Union pigmeat prices are continuing to slide due to a mixture of poor retail demand and the virtual closure of the “pig curtain“ on the Russian border.

For the first time for many months some spot quotes of less than 140p were being heard in the market, although most of the slighter warmer-hearted buyers were still prepared to hold their bids at 140p with premiums available for niche pigs, Freedom Food and other specials.

This underlines the need for producers to go the extra mile and obtain the highest level farm assurance they can because it is at the bottom of the market that pigmeat is seen as a commodity rather than a product and is most affected by cheap imports.

European Union mainland sow prices have also continued to decline in line with falling pigmeat values, but thanks to weakening sterling which must surely be heading for parity with the euro soon, most sow buyers held their prices at stand-on levels in the 114-116p region according to load size and specification.

Weaner prices continue to edge downwards tracking the DAPP despite the availability of cheap feed.

The latest AHDB 30kg ex-farm average is now quoted at 352.81/head and continues to be influenced by a slightly indifferent outlook for pig prices in the months ahead.

On the other hand once the current Indian summer comes to a close and temperatures drop, finished pig growth rates could fall sharply and finished pig supplies will quickly revert from feast to famine.

When this happens we could see processors looking for pigs rather than at them, but there are only really another ten clear trading weeks before Christmas interrupts the market once again.

Another feature has been the remarkable effect that PCV2 vaccines have had on the growth rates and mortality with many producers reporting that vaccinated piglets have “grown like weeds“ with much lower mortality, which also helps to explain why more pigs seem to be coming forward from what is currently an almost static breeding herd.