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Casualties Inevitable; Pork Demand Not Improved

13 August 2012, at 8:30am

UK - Despite the long-awaited return of the British summer as well as the London Olympics climax this weekend, there is no significant improvement in demand on the pigmeat front, writes Peter Crichton in Traffic Lights Commentry.

The DAPP remained almost unchanged at 150.35p with Tulip and all the other shouters remaining at stand-on levels with the result that the final medal table reads as follows:

  • 152p Woodhead
  • 150p Gill
  • 149p Tulip
  • 147p Cranswick and Vion.

Spot demand from the smaller fresh meat wholesalers remained quiet with the result that most bacon quotes were in the 149p–152p range according to specification.

Reports of better European pigmeat prices might help to lift the domestic market at a time when there are very few surplus pigs available and supply and demand is more or less in balance.

Unfortunately the euro has eased a touch compared with last week and traded on Friday worth 78.53p, but despite this as well as a better European outlook, cull sow quotes generally rose by 2p on the week and any further recovery in European mainland pigmeat prices would help to put a firmer base into the market, which is currently sorely needed as producers are battling with losses of up to 315/pig.

Cull sow bids for next week tended to be in the 110p–113p range and although good volumes are available and some farmers have sadly taken the decision to cull or reduce their herds, this did not undermine better all-round demand.

The spectre of ever-rising feed prices continues to hang like a dark cloud over the weaner market as a whole and the latest AHDB 30kg ex-farm weaner average of 339.66/head is probably 37- 310/head below CoP levels. This sector has become very much a buyers' market with very little enthusiasm or space available.

However reports of relatively firm European mainland weaner prices may possibly signal better times ahead.

The effects of the United States drought are continuing to reverberate around the commodities markets and although the United Kingdom wheat harvest will soon be well underway, crop losses caused by fusarium are doing nothing to help with ex-farm feed wheat quoted at 3185/tonne and LIFFE futures market for November at 3196/tonne and in July 2013 as high as 3204/tonne.

With soya remaining on the wrong side of 3400/tonne unfortunately the stage is set for expensive feed in the months ahead, even if there is a slight correction in the market once the combines start rolling in earnest.

Unfortunately there will inevitably be casualties unless the feed cost/pig price imbalance can be remedied and with the supermarkets still playing price wars with each other there seems little prospect of this happening, so perhaps a return to more militant action to remind consumers that this may be a use-it-or-lose-it situation may be the only way forwards?