By Peter Crichton
4th May 2018
“Helter Skelter” – When you get to the bottom you go back to the top…… (The Beatles)
Mixed prices across the board today although the latest SPP has gone up by .55p to 145.82p, unfortunately EU prices are heading south at an alarming speed with the latest German producer price falling by 5 Euro cents to 1.37p EUR (120p/kg in our money.
Although some but not all of the major players have put up their weekly contribution prices by up to 2p the spot market remains quiet with fresh meat demand reported to be selective but fortunately despite the short week not too many pigs were looking for homes and as a result spot bacon was traded at around the 145p region with more in places according to spec.
The value of the Euro continues to play a major role in determining pig meat prices, but despite a weaker pound with the Euro trading at 88.22p this was not enough to persuade cull sow buyers to go easy with sharp falls of up to 4p/kg for next weekcompared with their value of 104p this time last year when the Euro was much weaker at 84.7p.
Apparently European cold stores are filling up with pig meat with supply exceeding demand as well as sharp falls in the influential Chinese market, a major customer for global pig meat over the past few years.
As a result, culls have mainly traded in the 60-62p range which may encourage some producers to hang on to older sows and re-serve them rather than selling at such low levels.
Weaner prices have also been selective with demand for Freedom Food standard weaners well maintained but Red Tractor proving harder to move by comparison and the latest AHDB 30kg weaner average remains at £50.16/head with the 7kg prices dropped to £35.92/head.
With some finisher buyers worried about the high cost of straw and rising feed prices, it is no wonder that there is a certain amount of caution in the weaner market despite finished pig sales being relatively firm.
Feed prices have continued to creep ahead with the latest ex farm spot UK feed wheat quote now standing at £149.80/t which is £14/t more than it was worth at the start of the year.
UK protein prices have also remained firm with 48% soya meal trading ex Liverpool in the£362 region and rape meal prices also hardening to £222/t.
On the futures market London wheat traded for July at £147.60, November has also improved in value to £152.95/t.
And finally with the British Pig and Poultry Fair just around the corner on 15th/16th May, it is a good time to meet up with friends and colleagues and either celebrate or commiserate.
Just to put matters into perspective however, at the Pig Fair two years ago the SPP had slumped to 114.7p and the sow price was even worse than it is now at 59.33p.
The only downside appears to be that a tonne of wheat two years ago only cost £101.30 compared with its current day value of almost half as much again.
11th May 2018
“In the Summertime”– Mungo Jerry
The recent period of proper summer weather has come as a welcome relief and has also helped to stimulate barbecue demand after a long wet winter and spring.
The SPP has moved up by a significant .8p to 146.62p and weekly contribution prices were also tending firmer with rises of up to 2p/kg in places.
Spot buyers were also looking for (rather than at) pigs, with bids in the 150p region quoted and it’s good to see that spot prices are now level pegging with contract in many cases, but with feed costs on the rise, producers will need to watch every penny to maintain their margins.
Unfortunately the sow market is not displaying any buoyancy although it is something of a relief that this week German prices stood on, this is still at a very low level with UK cull sow exporters bidding in the 60-63p range. This time a year ago cull sows were being marketed at 106p/kg which for a 150kg deadweight sow works out at a value drop of £66/head!
Hopefully with better weather across northern Europe, alfresco eating will push up pig meat demand but with the Russian/UK pig meat import embargo in place it is difficult to see if there will be any World Cup boost as far as pig meat demand is concerned. Looking further ahead it is even more difficult to see how there will be any pig meat benefits in 2022 when the World Cup moves to Quatar!
The wide gap between Freedom Food and Red Tractor weaners remains in place and although the latest AHDB 30kg average looks a reasonably healthy £52.79/head and the 7kg price has also moved up £1.46 to £37.38, it is difficult to find many takers with space.
Not only are producers having to keep an eye on rising feed costs, but the price of straw has gone through the roof with reports in East Anglia of straw trading on an ex farm basis between £90-£120/t and in the north and west at considerably higher levels which has put a brake on some finishers filling yards because straw is extremely scarce even if you can afford to buy it in the first place.
Feed prices are also heading north with 48% soya meal traded ex Liverpool at £385/t and UK spot ex farm feed wheat is still on the rise with average spot sales quoted at £151.80/t. There is a saying that “wheat follows oil” and this is underlined by reports that there has been more upward pressure on wheat prices in global markets with London wheat quoted for July at £148.20/t and November at £152.50/t at a time when crude oil prices are rising following the US/Iran embargo.
With feed costs forming 60% of the cost of rearing pigs further increases in this sector will start to cast a shadow over the profitability of UK pig prices unless ours keep pace too.
And finally more concern over African swine fever was highlighted in the media this week underlining the threats posed by the Forest of Dean wild boar population and reports of African swine fever spreading at an alarming rate across Europe starting from Russia and now posing a major threat in parts of Eastern and Central Europe.
Closer to home, the main worry is that feral pigs in the UK will be accessing barbecue sites and getting into waste bins increasing the risk of potential ASF contamination.
Perhaps we need to check on the sources of all the pig meat being fed to visitors at the Pig and Poultry Fair next week and “Buy British”?
18th May 2018
“Changes” – David Bowie
Better news for UK pig producers with the SPP putting on .59p to stand at 147.21p and European pig prices also took a step forwards with the influential German producer price rising by 5 Euro cents to stand at 1.42 EUR which in our currency translates to 124p but is still a long way behind the equivalent UK prices.
Although the spot bacon market requires fairly quiet, buyers were showing a little more interest with bids reported to be in the 150p region and shrewd sellers were able to get a couple of coppers more in places although pig numbers remain light with most being sold on contract.
Weekly contribution prices have in the main stayed at similar levels and the impending Spring Bank Holiday on 28th May is unlikely to have any significant effect on prices.
Unfortunately the cull sow market remains at bargain basement levels with reports of EU mainland cold stores being full whilst demand has remained indifferent despite the improvement in the European pig price.
UK cull sow quotes have remained at similar levels in the 60-63p range compared with 102p a year ago not helped by a slightly stronger pound which saw the Euro trading at 87.34p compared with 88.18 last week.
The latest AHDB 30kg weaner ex farm average has taken a tumble dropping by a whopping £5.29/head to £47.50 although 7kg piglets have firmed slightly, rising by .26p and now stand at £37.64/head.
A shortage of straw costing over £100 tonne in some regions is putting finishers margins under yet more pressure and coupled with rising feed costs is having a negative effect upon weaner values with large scale finishers taking a fairly cautious approach to weaner procurement in the weeks ahead which is frustrating bearing in mind the relatively buoyant demand for UK finished pigs at present.
In all sectors of the weaner market however, “contract is king” and those sellers prepared to face the spot market will need strong nerves and an understanding bank manager with a widening gap between spot and contract prices for all weights.
Feed prices are remaining firm with the latest UK ex farm spot feed wheat price quoted at an average of £150.90/t and protein prices are also holding with Brazilian 48% soya meal quoted ex Liverpool at £376/t and 34% rape meal ex Kent at £217/t.
Grain futures prices saw London wheat traded for July delivery at £150.40/t and November at £151.25/t.
Although some global grain futures prices have fallen due to lower US wheat futures following the release of the latest USDA report but looking further ahead, tighter global stocks for key crops are forecast in 2018/19 so there may be some justification for shrewd UK pig producers to take some further forward cover?
And finally, another successful Pig Fair has come and gone and well done to the sponsors, organisers and exhibitors for all the work put in to setting this up.
There might however be some merit in looking at a venue on the eastern side of the country near say, Peterborough/Newark nearer to where the majority of indoor and outdoor pig and poultry sites are located and which would be much more convenient for the majority of the pig and poultry producers and their staff.
The older cattle buildings at Stoneleigh are, like many of us, starting to show their age and it would be interesting to hear what others think (with apologies to those of you from the West Country and the Midlands as well as the AHDB).
25th May 2018
“I’m Backing Britain” – Bruce Forsyth
A positive day for sellers with the SPP moving up by .73 to 147.94p, the influential German producer price has also nudged up by 2 cents to stand at 1.44 EUR or 126p in our money.
Bacon pigs are getting scarce with most selling on contract and weekly contribution prices have been anywhere between stand on and plus 2p within the 140p-150p parameters.
Very few reports of spot bacon prices were available but trades were reported in the 150p-154p range which is slightly ahead of contract.
Cull sow prices have thankfully started to head north rather than south with a modest 2p rise this week with the two main export sow buyers pitching their prices in the 62p-66p range according to load size.
A slight improvement in the value of the Euro has also helped as far as pig meat imports and exports are concerned with the Euro trading at noon worth 87.65p compared with 87.34p a week earlier.
Although the latest AHDB 30kg average has recovered all last week’s losses rising by £5.81/head and now stands at £53.31 the latest 7kg average has held at £37.64/head but these only tell half the story with the gap between spot loads of Red Tractor and Freedom Food weaners getting wider all the time due to a significant lack of finishing space as well as the crippling cost of straw.
However, the elephant in the pig industry room at present seems to be rising feed prices about which warnings have been sounded in this column over the past year, bearing in mind that in January UK feed wheat was traded on a spot basis at £135.80 compared with £154.90 today.
These price increases partly relate to concerns over weather conditions in Australia, Canada and Russia although growing conditions in the EU are generally reported as favourable.
The US and Australia has been dry but there are some reports of more favourable weather in the pipeline but the futures markets have seen London wheat trade firmer at £155.90/t for July and £156.55 for November.
Protein prices have also remained firm with 48% Brazilian soya quoted ex store in Liverpool at £370/t compared with £304/t in early January.
And finally, good news that a recent survey of UK consumers has indicated that they would prefer to buy British where they can but not at any price.
With Brexit looming we need to hope that we are not flooded with pig meat from countries with lower welfare standards at competitive prices and hopefully consumers will continue to recognise the benefits of supporting the UK agricultural sector in a post-Brexit world.