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Depressing Day for Sellers as Tulip Drops Shout Prices

23 July 2012, at 10:33am

UK - A damp and depressing day for sellers was kicked off with the disappointing news that Tulip had decided to drop its shout price by a penny and although Vion followed suit, all the other major players decided to stand on reflecting a relatively firm DAPP which is currently holding at 150.46p, writes Peter Crichton.

The pre-Olympics medal table now reads as follows:

  • Gold 152p Woodhead
  • Silver 150p Gill
  • Bronze 149p Tulip
  • Lead 147p Vion and Cranswick

Spot buyers also remained relatively quiet reflecting indifferent retail demand and most spot bacon was traded at or around the 150p mark, but one positive sign is that no pigs were rolled and supplies remained tight, which could lead to a slight lift in the next week or so during the Olympics, especially if the weather improves stimulating barbecue demand.

Another negative factor has been the poor performance of the euro which traded on Friday at 77.8p compared with 78.6p a week ago and 80p at the start of the month.

A weak euro (or a strong pound) is always bad news for the pig industry as imports are effectively cheaper and exports lose value. For those with long memories, this time last year the euro was trading at 88.2p which means it has dropped in value by a massive 11 percent.

European mainland producer pigmeat prices are averaging around 130p which coupled with a weak euro means that pigmeat imports can easily undercut the domestic product by over 5 percent.

The cull sow market is also suffering from weaker European mainland pigmeat prices and the value of the euro and more sows from herds clearing out and export abattoirs cut their bids with most delivered prices in the 108p–111p range according to specification. This compares with quotes of around 122p just eight weeks ago.

The weaner market remains the Cinderella of the industry with the AHDB 30kg ex-farm weaner average continuing to slide and now standing at 340.83/head and reports of spot loads of 7kg piglets changing hands at not much more than 325/head.

The imbalance between feed costs and pigmeat prices is continuing to crucify the British pig industry as a whole, bearing in mind the old rule of thumb that the price per kilo for a bacon pig should not be lower than the value per tonne of wheat, i.e. if bacon pigs are 150p/kg,to stay in the black the producer should not paying more than 3150/tonne for wheat (which would be good if it was true).

The recent surge in feed prices has done nothing to abate much to the dismay and despair of the industry as a whole and this week until the combines get rolling ex-farm feed wheat is quoted at 3214/tonne and soya is nudging up towards the 3435/tonne mark in some regions.

Perhaps we should all move to the Philippines where according to John Millard of J.J. Genetics finished pigs are trading at the equivalent of 170p per live kg, which translates to 230p per kg deadweight. Even in mainland China prices are ahead of ours where, according to John, liveweight baconers are selling at 142p, which is equivalent to 190p deadweight.

Perhaps we should all have the yen to head east where I am sure there are not quite so many forms to fill in either.