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Shouts Trail Spot Again

1 October 2012, at 7:50am

UK - Although the DAPP put on 1.61p this week and now stands at 153.46p, following Tulip's lead all the other shout prices went up only a penny with the exception of Cranswick which stood-on. But at least Woodhead has breached the 160p benchmark, writes Peter Crichton.

The league table now reads as follows:

160p Woodhead
158p Gill
156p Tulip
155p Vion
154p Cranswick

The United Kingdom price differential has almost completely vanished when compared with European Union imports. It is still a puzzle why we have lost our premium at a time when it would be more than handy because according to BPEX, producers need in the region of 170p/kg deadweight to break-even.

Spot buyers remained reasonably active in the market but were at stand-on or +1p levels and the general consensus seems to be that the retailers still hold the whip-hand in a competitive sector at a time when consumers seem to be cutting back on their weekly budgets.

As a result most spot bacon was traded in the 158p–161p range according to spec and all pigs were sold.

The euro ended the week almost where it began worth 79.68p and with European prices levelling out it was no surprise that cull sow buyers generally stood-on, although one or two were tempted to drop a penny where they could. Sows continued to be traded in a fairly narrow price range between 116p–120p according to region and specification.

The weaner market has yet to stage any significant recovery despite the prospect of improving finished pig prices in the weeks ahead assuming European supplies continue to tighten and demand improves, with the latest AHDB 30kg ex-farm weaner average virtually unchanged at 339.11p/head, but several trades just on the topside of 340/head are now being reported.

The grain markets have had something of a rollercoaster week with futures quotes dropping back on Wednesday, but they have since recovered to earlier levels with November wheat quoted at 3200/tonne and May 2013 at 3204/tonne. Reductions in soya prices might help to ease the pain to some extent, but there is still a yawning chasm between cost of production and pig prices that needs to be closed or more producers will inevitably fall into it.

Further reports are being received of producers considering serving notice on contracts which may yield a much lower price than spot as pig prices are forecast to rally early next year.