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UK Pig Producers Want 170p

24 September 2012, at 7:45am

UK - At last, evidence is emerging that even the most reluctant retailers are starting to wake up to the fact that they will have to pay more for pigmeat and processors are reporting generally improved prices on the wholesale front, which has helped producer returns to add to recent gains with Tulip moving its shout price up by a further 2p to 155p and Cranswick and Vion played catch-up by adding a welcome 3p, with Gill and Woodhead also moving ahead by 2p, writes Peter Crichton.

The league table now reads as follows:

  • 159p Woodhead
  • 157p Gill
  • 155p Tulip
  • 154p Cranswick and Vion

The DAPP has yet to fully react to rising prices and currently stands at 151.85p.

Although spot buyers opened the day offering stand-on prices they soon found very few takers and as a result spot quotes moved up to between 158p–161p in the main and according to spec, but numbers still remain on the tight side and European prices are also reflecting a similar trend with the key German market continuing to harden.

Although the euro has lost a little in value over the last week trading on Friday at 79.97p, compared with 80.77p a week ago, this did nothing to take the edge off demand for cull sows which moved up by a further penny or so and despite large numbers on offer including several big herds being culled, shrewd sellers were generally able to obtain prices in the 117p–120p/kg range according to specification.

Just a pity that so many sows are being culled because pig production has been unviable and further shortages in the British slaughter pig supply pipeline are forecast by early next year.

The weaner market appears to have stabilised and may soon recover from its current bargain basement levels, but there is still a long way to go before producers hit breakeven with the latest AHDB 30kg ex-farm weaner average quoted at 339.00p/head and signs are emerging that some weaner buyers might be prepared to up their bids by 32- 33 in the weeks ahead.

Few signs of relief however on the grain front with feed wheat trading at 3192/tonne ex-farm and LIFFE forward quotes for feed wheat of 3205.50/tonne for November and 3210.75/tonne for next July.

Providing pigmeat supplies continue to tighten across Europe and the euro does not wobble we should see better returns in the weeks ahead, but according to BPEX 170p/kg deadweight still represents a realistic breakeven point and we are a long way from that at present.