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Retailers Decide to Play Hardball

by 5m Editor
24 January 2011, at 12:34am

UK - Another very difficult day for sellers, but a few signs may be emerging that we are at or close to the bottom of whichever particular trough we seem to have fallen into, writes Peter Crichton.

Some but not all of the big operators' weekly prices have slipped and although Tulip held firm at 136p, Vion and Cranswick dropped 2p to 133p and 134p respectively and even Woodhead eased by a penny having held firm at 140p since before Christmas.

Although I may be unpopular for saying this, because of the rising tide of much cheaper foreign imports some of the big players have had to drop their prices in order to keep slaughtering bigger numbers and avoid too many rolled pigs building up in the system, which with heavier weights and higher backfat measurements inevitable lead to further price reductions.

This is because the retailers have been playing hardball with the processors on the basis that if they are going to take extra product it needs to be competitive with the foreign stuff. Distasteful but true.

But it is a fact that the processors' margins are a good deal better than producers without whom they would not have a business in the first place.

On a positive note the DAPP actually took a slight upward step to 137.55p, but one does not need a crystal ball to forecast that it will do the reverse next week.

As a result most spot bacon was traded in the 126–128p region, although there were one or two reports of desperate sellers having to take a penny or so less than this.

The cull sow market often provides a forward barometer of European Union pigmeat price trends and for the first time for several months actually moved up, but only by around 2p with large loads worth 80p/kg on a delivered basis or 74–76p on a collected basis.

The weaner market is also signaling a shortage of pigs in the pipeline with far fewer being traded, although price remain lacklustre with the Agriculture and Horticulture Development Board 30kg ex-farm average quoted at 342.15/head and 7kg piglets around the 330 mark.

Swine dysentery has reared its ugly head in Norfolk and BPEX along with Jimmy Butler are to be supported in their efforts to try and improve lorry-washing facilities at abattoirs, which are in some cases abysmal and amount to little more than a garden hose and a watering can. Hardly the best advertisement for the pigmeat supply chain in the 21st century.