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Demand Nudged Ahead of Supply

by 5m Editor
19 December 2009, at 9:27am

UK - Most pig sellers sighed with relief this evening with virtually every pig sold and no signs of the “Christmas rollover“ that we often have to face, writes Peter Crichton.

Although the DAPP moved marginally downwards and now stands at 138.82p, no further significant falls are on the horizon and this certainly compares very favourably with its value of 131.23p at the start of the year.

Most spot buyers opened on Friday suggesting prices would be a positive stand-on, but by mid-morning the signs of demand nudging ahead of supply started to emerge with the result that canny sellers were able to get a copper or two more later in the day.

As a result the spot bacon base price was firm at 129p with more money available for higher welfare or lighter weight pigs.

But the picture in Europe is far less rosy, mainly due to much cheaper non-European-Union imports from Canada, the United States and Brazil undercutting European Union prices.

This was clearly flagged up in the cull sow market where due to a combination of poor European demand and the short week ahead, cull sows proved to be very hard to shift with demand matching the weather (i.e. cold) and bids in the 94–96p range were available for those fortunate enough to find space, but in the low 90s from some outlets that already had more sows than they were looking for.

Cull sow prices have also not been helped by the recent improvement in the value of the pound with the euro closing at 88.8p today compared with 90.5p a week ago. Why anyone should have much confidence in the United Kingdom economy with the present clowns running the circus is a mystery to me.

On a brighter note the weaner market is continuing to reflect increasing optimism for pig prices this spring and although many of us have made the mistake of backing horses that then either failed to start, fell or worse, on this occasion hopefully their optimism will not be misplaced.

As a result the AHDB 30kg ex-farm weaner average is continuing to recover and now stands at 348.81/head, although there are several reports of 30kg weaners being traded in the 350/head region according to quality.

Although we have not gone out on a particularly high note this year, at these levels producers can make money - but Europe remains a threat, which is why the industry as a whole needs to continue to stress the high welfare and overall quality of British pigmeat.

You may have noticed quite a number of pig weathervanes are springing up on farms, but one feature they often have is that the pig’s nose seems to be pointing in the direction of the feed bin rather than the wind!