3^rd September 2010

A rather underwhelming day for pig sellers and although the schools and factories are now open again, no real signs have yet emerged of any significant upturn in demand.

Retailers are still complaining of poor demand and if perhaps the industry were prepared to back Jimmy Butler’s proposed promotional levy, this could help at a time when margins are shrinking.

The DAPP has continued its steady downward track and now stands at 142.87p and the Tulip shout price also slipped a penny to 141p.

With reports of extra numbers of slaughter pigs available with lower mortality, better productivity and some producers (perhaps unwisely) expanding, there were more than enough pigs to go round with quotes as low as 135p/kg at the commodity end of the spot market with other quotes tending to be circa 136p/kg.

A very slight improvement in the value of the Euro which closed on Friday worth 83.3p helped cull sow prices to stand on at a time when European values are reported to be falling.  Shrewd sellers with large loads of sows to sell were generally able to negotiate prices of between 100 – 103p and 98p was widely available for delivery to collection centres.

Demand for weaners remains fickle with very little space available for spot loads with several finishers being more preoccupied with carting bales of straw than buying pigs and also wondering how good (or bad) the demand for finished pigs is likely to be in the run up to Christmas.

The latest AHDB 30kg ex farm average remains almost unchanged at £47.39/head, but non-Farm Assured weaners have proved to be hard to place.

Producers were also dismayed to hear that Gills Abattoir had apparently shut their lorry wash this week and hopefully this will only be a temporary measure, but greatly increases the risk of the spread of disease including dysentery, especially during the warmer weather when pig muck can effectively be oven baked in livestock containers and very hard to shift afterwards without a chisel, a Brillo pad and a pair of Marigolds.

On the numbers front, before expanding their herds, producers should be reminded of the very fine supply/demand balance within the UK retail sector to absorb extra supplies of potentially more expensive UK pigmeat in the face of cheaper foreign competition.

The last thing many of us would wish to see is a return to the oversupply situation we saw 10 years ago and the long term damage that was caused to the industry as a whole.

27^th August 2010

What Bank Holiday? was the question being asked in the pig market today.

With a number of the major abattoirs slaughtering on Monday the problems encountered on August Bank Holiday last year were largely avoided when contract and spot pigs kept being rolled and the backlog was not cleared until the end of September with prices suffering as a consequence.

Although we have hardly had a barbeque summer, the return of cooler weather is now being seen as a sign that pigmeat consumption might rise and growth rates could slow down helping to improve demand across the board.

The DAPP slipped again and now stands at 143.44p, but the Tulip base price stood on at 142p and although some spot buyers suggested they would like to pay less for pigs next week, most lost their nerve and prices remained at stand on levels with if anything a slightly firmer demand for lighter weights.

As a result spot bacon was traded in the 138 – 140p range and the only sellers left out in the cold were those with non-Farm Assured pigs who in some areas were unable to get more than 136p.

Lighter cutter weight pigs were traded at better levels with quotes of up to 158p available for 60kg deadweight pigs.

The Euro also staged a miniscule recovery and now stands at 82.2p compared with 81.8p a week ago, which at least means that cheap pigmeat imports are no cheaper.

Cull sow quotes remained at generally similar levels although there was something of a lack of competition in the market today with a short week and enough sows to go round.  Delivered quotes for large loads were available in 100 – 102p region and collected prices between 95 – 97p according to specification.

The weaner market may also have levelled out now that feed prices seem to have stabilised and the AHDB 30kg ex farm weaner average is now quoted at £47.36/head, but premiums are available for Freedom Food weaners as well as more interest being shown in 7kg piglets from some of the large scale buyers.

23^rd August 2010

Apologies for the first ever late delivery of my Commentary.  Due to the need to close a big pig industry related deal on Friday and my secretary having her one days annual holiday I ran out of time to send out anything coherent, but for those of you who missed it here it is………………..

Friday’s situation was similar to the case of deja vu we experienced a year ago towards the end of August and that dreaded (but final) Bank Holiday of the year.

The DAPP took a further modest downward step and now stands at 144.59p, but for those sellers who are still on DAPP related contract base prices this represents a much better return than the spot market where bids of between 136 – 138p were available for heavy bacon, but for lighter weights on a tighter spec 140 – 142p and the maxim “weight” is money remains the key.

The following comparisons with 2009 however might make slightly uneasy reading for bank managers and are another reason why we should continue to actively promote pigmeat to try and improve margins rather than allowing the retailers to call the tune.

In simple terms all the revenue index prices shown have gone down and the main cost item (feed) has gone up!

With processors able to buy cheaper imports due to the falling Euro, further downward pressure is expected as far as UK pig prices are concerned over the next few weeks, but once all the schools are back and the holiday season is well and truly over demand normally improves which might help to put a little bite back into the market, but some processors are suggesting that we may have to be content with returns in the 135p region between now and the end of the year…………we shall see.

Although cull sow values are well behind their levels a year ago, this is mainly due to equivalent falls in the value of the Euro.  Over the last few weeks UK prices have if anything edged ahead reflecting competition for market share between UK abattoirs, rather than any actual improvement in EU mainland cull sow prices.

Although there are a fairly wide variety of different cull sow quotes available on a flat rate or collected basis and others subject to grade/weight premiums/deductions, most producers were able to negotiate prices of 96p including haulage or up to 100p on a delivered basis.

The weaner market continues to suffer from the twin problems of weaner buyers being preoccupied with harvest/straw carting and a general lack of finishing space in the system, especially for 30kg weaners where there are fewer homes available with more of the large scale buyers now operating a 7kg – 110kg systems, which are reported have lower mortality levels as well as reducing haulage costs.

The latest AHDB 30kg ex farm weaner average is quoted at £48.16/head which includes a high proportion of DAPP related contract prices, whereas the spot weaners had been changing hands at up to £5 below this mainly due to concerns over high feed costs and something of a “buyers’ market” is developing.

13^th August 2010

Demand today was rather like the weather…………..dull and not exactly hot, but most contract pigs cleared reasonably well with reports of only a few pigs being rolled into next week.

Spot buyers took their cue from the DAPP which dropped almost one penny to 144.59p, but Tulip fortunately stood on at 143p.

As a result there was no need for spot bidders to break into a sweat to find the numbers required, but once again a feature of the trade was a fairly wide range of spot bacon regional prices between the “haves and have nots” and quotes anywhere from 137p to 142p were available.

Further improvements in the value of Sterling have done nothing to help the import/export pigmeat balance and the Euro closed on Friday worth 81.8p, which is its lowest point this year and compares with an early 2010 value of 89p.

Some of the smaller wholesalers were on the hunt for a few extra pigs to top up their numbers, but prices remain unspectacular with cutters traded in the 142 – 146p range.

Recent falls in the value of the Euro did nothing to dent demand for cull sows which remains driven more by competition between UK cull sow abattoirs rather than better prices in Europe.

Shrewd sellers with large loads of sows were once again able to negotiate prices of over 100p/kg on a delivered basis with collected prices circa 96 – 98p according to specification.

The weaner market remains under pressure on three fronts due to concern over falling finished prices, high feed costs and many finishers being more preoccupied with carting valuable straw than buying cheap weaners.

The latest AHDB 30kg ex farm weaner average has dropped by over £5/head from mid April, but still provides a better net return to the breeder than the finisher.

Although cereal price rises seem to be levelling out, forward quotes are still painting a much more expensive picture for pig producers in the future with ex farm feed wheat traded in East Anglia on a spot basis of £137/tonne and September – October forward prices nudging up towards £140/t.

And if I had a pound for every time pig buyers have mentioned the dreaded upcoming Bank Holiday, I would be better off than many pig producers!

6^th August 2010

Although pig prices are normally the headline feature of this commentary, on this occasion the soaring cost of feed cereals is the big talking point.

Off the combine prices (if it is not raining) of between £155 - £160/tonne on a delivered basis are available for sellers in East Anglia with forward prices of circa £165/tonne for November rising by a further £10 to £175/tonne for March next year.

Soya is trading at slightly more moderate levels with quotes in the £275 - £285/tonne region available, but the cost of compound feeds is already shooting up and even the cheapest home-mix finisher ration is going to cost close to £200/tonne.

Much higher pig production costs are not limited to UK producers and the same problem is being faced across Europe and beyond.

Unless retailers can be persuaded to pay producers a price that will allow them to stay in business it is inevitable that some will be forced to quit, especially in Europe where they have not had the benefit of a couple of reasonably good years to build up a fighting fund.

The Catch 22 is that if pig producers receive a price that matches much higher costs of production this will put up the cost of pigmeat and could hit demand with consumers switching to cheaper alternatives, although the chicken industry which normally challenges pigs head on will be facing even steeper rises in production cost because feed forms a bigger percentage of their overall C.O.P.

Those readers with longer memories might remember the following extract from my report in the 14^th May 2010 Commentary:-

Cereal market price watchers will also be aware that prices have continued to creep up with ex farm feed wheat worth close to £100/t and now might be the time for forward thinking producers to get some more cover.

Although slaughter pigs were cleared reasonably well for next week, demand remains fickle with the DAPP taking a further downward step to 145.55p and the Tulip base price also dropping by 1p to 143p.

As a result spot buyers were spoilt for choice and quotes as low as 138p were heard for bacon in some sectors, but warmer hearted buyers were generally prepared to give 140p and a touch more in places.

With the much feared August Bank Holiday not too far away the advice to producers is to keep on top of their numbers wherever possible because with feed prices where they are holding pigs to heavier weights will prove to be more expensive than usual.

Cull sow prices have continued to maintain recent values with report of an extra copper available to those sellers who were prepared to haggle, but still a fairly wide range of quotes depending on load size and specification and these were anywhere between 95 – 100p.

The weaner market has separated into the “haves and have nots” and those sellers with binding DAPP related contracts are still receiving prices around the latest AHDB 30kg ex farm average of £50.62/head.

The spot weaner market however has fallen sharply because of concerns over feed prices and indifferent finished pig returns with the result that some spot 30kg weaners are now trading at a £3 - £5 discount when compared with contract.

Difficult times ahead, especially for those who remember the double whammy that occurred 3 years ago which not only saw sharply rising feed prices, but we were also hit with the August 2007 outbreak of FMD which managed to “escape” from Pirbright, which heralded all sorts of problems for the livestock sector as a whole.

Hopefully lightning will only strike once and not twice on this occasion.

30^th July 2010

Demand for contract and spot pigs remained rather subdued today with most abattoirs blaming indifferent demand from the retail sector at a time when there are perhaps just a few more pigs on offer than they really need.

Although there were no reports of any large numbers of pigs being held over, general price trends tended to be more of a negative than a positive “stand on” with spot bacon selling at around the 140p mark and at times like this you know who your friends are (or are not).

Lighter pigs continue to earn modest premiums, but when compared with beef and lamb pork is still extremely good value and it is just a pity that demand at the retail end still seems to be on the flat side and perhaps those who voted in favour of Jimmy Butler’s plea for more money being spent on pigmeat promotion might be proved right.

The Euro has also followed a rather lacklustre path recently and closed on Friday at 83.1p which is almost 0.5p lower than its value a week ago indicating that currency traders have probably marginally more confidence in the Pound than the Euro.

Cull sow prices remain within a fairly wide range depending on load size and region with but leading quotes were around 100p/kg on a delivered basis, but for those with smaller numbers or further distances to travel bids in the 94 – 97p area were available.

The price of feed remains a major talking point, which after a further volatile week has seen off the combine prices for wheat of over £130/tonne and delivered quotes nudging up towards £140/tonne.

Some pundits feel that the market is being lifted more by speculators than raw material users and once the combines get into the UK wheat harvest prices might perhaps either ease or hit a plateau, but there is no doubt that producers will face significantly increased production costs in the months ahead compared with a year ago.

One thing everyone (apart from arable farmers) wants to avoid is a repeat of the situation in 2007 when we saw wheat prices zoom up towards £180/tonne and several pig producers head for the exit door including some spectacular liquidations.

Disease also remains a significant challenge in the industry as a whole and a significant number of the dysentery outbreaks that have affected East Anglian and Yorkshire producers can be traced back to inadequate or incomplete wagon washing with inadequate disinfection at abattoirs.  This is not helped by the pressures of time that hauliers have to work under and reports of inadequate washing and disinfection facilities as some (but not all) UK plants.

Abattoirs need to recognise that they have a vital part to play in the food supply chain and it is essential that the UK pig herd remains healthy, so wherever possible the lorry wash should be treated as a priority and not somewhere round the back with a trickling hose attached to a hungry slot machine and a timer!

 23^rd July 2010

A fairly quiet day as far as pig sellers are concerned with the DAPP down a touch to 146.78p and the Tulip base price also down by 1p.

Fortunately pig numbers still seem to be on the tight side, but retail demand is also slow hence spot buyers were generally operating in “stand on” mode.

As a result spot bacon was traded in a fairly narrow band between 140p – 142p with lighter weights worth 4p – 6p more than this.

If better weather returns this could stimulate alfresco demand for pigmeat.

Earlier signs of a slight rally in the value of the € unfortunately fizzled out and it closed on Friday worth 83.3p down from 84.4p a week ago.

Despite this cull sow prices moved up by 2p after several weeks of falling quotes and producers were also heartened by the news that Lamberts’ new Eye (Suffolk) abattoir will start slaughtering sows next week providing a convenient and competitive outlet especially for East Anglian producers.

The weaner market continues to suffer from rising feed prices and a lack of confidence in finished pig margins during the autumn period ahead and the latest AHDB 30kg ex farm average is £51.63/head, but with reports of some producers selling at below £50/head where space is short.

The other talking point of the last few days has been feed prices with off the combine quotes of over £120/tonne for feed wheat and barley looks a much better bet at around £105/tonne.

Forward prices are however painting a fairly expensive picture with wheat for November delivery quoted at £135/tonne, but the market remains speculative so those producers with forward cover may now be pleased that they have got a safety net in place.

16^th July 2010

Although the DAPP has held up reasonably well at 146.93p, spot sellers found the going slightly tougher with fewer takers in this sector which continues to be affected by cheaper imports and indifferent retail demand.

As a result spot quotes were in a fairly wide range between 139 – 144p according to region and specification and some reports of pigs being rolled into next week, but fortunately not too many as UK numbers remain fairly tight.

Lighter pigs continue to earn premiums of 4 – 6p above bacon with spot cutters traded between 145 – 150p.

One heartening feature has been the recent improvement in the value of the € which closed on Friday worth 84.4p compared with 83.3p a week ago.

This helped to put something of a bottom into cull sow prices which had been generally easing over the previous two weeks with quotes generally falling into the 90 – 94p range depending on load size and small premiums still available for those sellers with larger numbers and who are prepared to haggle.

Weaner prices continue to reflect the slightly unsettled outlook for finished pigs in the weeks ahead and recent sharp rises in feed wheat quotes with the AHDB 30kg ex farm average now standing at £52.21/head, but some quotes of £2 – £3 below this where sellers needed to make space during harvest.

The recent rise in feed wheat prices remains the talking point of the week which in the last few days have seen feed quotes increase by up to £15/tonne.

There are some signs however that speculators are driving the market up rather than simply an increase in demand or reduced supplies, but those producers who bought ahead a few months ago (as previously advised) should keep their feed contracts locked in a safe place.

9^th July 2010

A quiet days trading with most contract buyers having enough pigs in the system to meet what was described as patchy retail sales and although the recent heatwave has boosted demand for parts of the pig, the loin remains hard to sell.

As a result the spot sector was more of a buyers’ market and most of those out shopping were able to agree deals in the 142 – 144p range, but some warmer hearted types were prepared to pay a penny or two more than this but often on a tighter spec.

The DAPP has held almost unchanged at 147.27p but could ease back in the weeks ahead, although one bit of slightly more positive news is that pig numbers appear to be tight with the hot weather slowing down growth rates.

The € closed the week marginally firmer worth 83.6p up from 82.9p only 7 days ago.

Unfortunately this did nothing to lift the gloom in the cull sow sector where prices have generally eased by a further 2p with quotes of between 92p and 96p on a collected/delivered basis.  Following the suspension of slaughtering at A & G Barbers an extra 1,000 sows were looking for space with the two remaining export outlets in the UK who are selling to a lacklustre EU mainland sow market.

A return to a more competitive situation in this sector would be welcomed and a few more baskets to put all our eggs in.

Weaner prices have also eased reflecting a combination of rising feed prices caused by the drought and indifferent finished pig prices forecast over the next 10/12 week period.

The latest AHDB 30kg ex farm weaner average has dropped again to £53.23/head, although this still probably represents a better return for the breeder than the finisher.

2^nd July 2010

Unfortunately prices were not as hot as the weather and although the DAPP took another upward step to stand at 147.31p (up 0.51p from the previous week), this was due to lighter and leaner pigs going through the sample rather than any actual increase in prices the previous week.

Spot buyers tended to be fairly coy and although the current heatwave should help barbeque demand, other parts of the pig especially the loin are still proving hard to sell.

The relatively low value of the € which closed on Friday worth 82.8p is also having a negative effect on the market with much cheaper imported pigmeat still posing a significant challenge.  As a result base prices and spot quotes tended to drift down by 1 – 2p, but spot bacon traded at around the 147p mark and modest premiums still available for lighter weights from some outlets.

In the cull sow market the shock news of the day was the decision by A & G Barber Limited to suspend all cull sow/boar slaughtering at their Essex abattoir following the release of undercover video footage of what can only be described as totally unacceptable handling and stunning of pigs by Eastern European agency workers for a limited period last April.

Whilst there are no excuses for this, questions have to be asked why these people were not more closely supervised by the MHS vets who are responsible for ensuring that animal welfare and biosecurity standards are fully maintained.

A & G Barber Limited accounted for approximately 25% of the UK weekly cull sow throughput of circa 3,500 head and although their closure will affect the pig industry as a whole, prices only moved down a shade more due to reduced demand in mainland Europe rather than the loss of a major UK cull sow slaughtering outlet.

Quotes for large loads of sows were up to 98p with the majority between 94 – 96p and it was refreshing to see that prices have remained in line with European levels.

Often in life where one door shuts another opens and it will be interesting to see how the market copes with the situation in the months ahead.

25^th June 2010

Strawberries and Wimbledon used to be more of a problem for pig sellers before fridges were invented with no “R” in the month, but in modern times this has proved to be much less of a challenge.

Some signs are however starting to emerge of an easing in prices which have risen steadily throughout the year and the DAPP closed very marginally lower losing 0.02p to 146.8p, which is still 8p better than where it was at the start of the year.

Some of the smaller fresh meat abattoirs are also commenting that sales have not been as brisk as they had expected, although we all have the World Cup to look forward to (?) on Sunday.

If the Germans are no better at football than they are at winning wars this might allow England to progress to the next round and keep the home fires (barbeques) burning………..we shall see.

Spot bacon quotes tended to be anywhere between stand on and 2p off according to specification, but in general 148p proved to be an accurate base price with small premiums available on tighter specs or for lighter weight pigs.

The € has remained under pressure all week and closed on Friday worth 82.1p compared with 83.5p a week ago.

Collected prices for cull sows were in the 93 – 95p range, but it was hard to get much more than 97p on a delivered basis.

Weaner values also continue to reflect the fairly static nature of finished pig prices and although forward feed quotes are easing, the AHDB 30kg ex farm weaner average has remained almost static at £54.24/head.

If European pigmeat prices continue to drift downwards especially if the € remains weak, this will allow more foreign imports to undercut the domestic market.

Now might be the time for those producers still sitting on the fence about proposals originally submitted by Jimmy Butler for a promotional advertising levy to persuade BPEX to support this innovative suggestion.  With good margins at present the industry can surely afford a relatively small contribution to help ensure a strong future in market place for UK pigmeat.

18^th June 2010

A firm demand for all categories of pigs, although no fireworks, with prices at sustainable levels for producers and hopefully also allowing enough of a margin for processors to keep in the black as well.

The DAPP continues to nudge ahead and put on another 0.66p to stand at 146.82p.

12 months ago spot prices and the DAPP peaked in late June, but then went into a fairly steady decline right through to the autumn.

Signs are emerging that this year although we have not hit the heights seen in 2009 supply and demand are in better balance, which should (hopefully) mean we avoid last year’s roller coaster ride and for those of you familiar with these devices, they always end up lower than where they start!

Spot bacon was traded in fairly tight band of between 150 – 152p/kg with lighter cutter weights earning a modest 4 – 6p above this.

Premiums are being paid for slaughter gilts by some smaller outlets and this is an area well worth looking at, especially as gilts tend to probe thicker than boars so can be taken out of the system at a slightly lighter weights, but still return higher than average prices.

The € has moved very little this week and traded on Friday worth 83.6p compared with 83p a week ago.

While the European cull market is reported to be over supplied and under pressure, because of the relative shortage of UK sow numbers cull prices held at generally similar levels, although there were some regional variations with sows worth more in the south east than they were in the north and most traders were quoting bids of between 96 – 100p according to specification.

The weaner market has also remained firm throughout with the latest AHDB 30kg ex farm average quoted at £54.24p/head, but prices are likely to rise as the autumn approaches, especially if the cost of feed continues to drift lower.  The latest feed wheat quote of £96.50/tonne compares with £100/tonne in early May.

11^th June 2010

Some fairly positive signals were sent out in the market place by the further improvement in the value of the DAPP which now stands at 146.16p, although the Tulip base price remained at a 148p stand on.

UK pig numbers are reported to be on the tight side and as a result everything was sold despite one of the major players cutting their kill by 1,000 head for next week.

Although the weather has remained on the chilly side, there is a better forecast for the weekend and early next week which might help to stimulate demand on the barbeque front and although recent falls in the value of the € are causing some concern, pig trading finished on a generally firm note with very few cases of spot bacon being traded for less than 150p/kg.

Several retailers are reporting to be living on something of a hand to mouth basis which may mean that if demand picks up new orders will come rolling in leading to further price rises in the weeks ahead.

Lighter cutter weight pigs continue to attract modest premiums of 4 – 6p/kg, although those producers who have space cannot beat taking everything to the heaviest possible weight and selling on a bacon contract and some of the more generous specifications out there to 90kg on a 14 probe mean that pigs at the top end of the weight range are now capable of realising close to £130/head.

The € finished the day on Friday worth 83p, which is a far cry from last autumn when it hit 92p in value, but at least Friday’s close is slightly ahead of 7 days ago and perhaps we have hit something of a plateau?

EU mainland cull sow values have remained at similar levels, although reports are still being received of indifferent demand and very cheap imports from Brazil, America and Canada undercutting the EU market which may help to explain why UK cull sows are now generally trading in the 96 – 98p range compared with 110p 12 months ago, which is equivalent to a loss of £15/sow.

The general trend is for sow values to remain at similar levels in the summer but rise in the autumn, but even at what appear to be low prices a return of £150/head from a cull sow is not to be sneezed at.

Weaner prices continues to reflect long term confidence in the market although the AHDB 30kg ex farm average has slipped a shade to £54.27/head, but those sellers with large numbers of tail docked and PCV2 vaccinated pigs are still able to command a significant premium in an undersupplied market.

Those of you who are looking for outdoor pig equipment, the following sale which takes place next Saturday the 19^th June may be of interest www.petercrichton.co.uk/images/PDF/catwebsite

4^th June 2010

Like the weather prices are also hotting up and 150p proved to be a very accurate minimum price for bacon and anyone who sold at less at this has probably been sitting out in the sun for too long.

The Tulip base price moved up a penny to 148p and the DAPP also took another upward step to 145.92p.

Although prices are still approximately 5% lower than they were a year ago, most sellers would rather see a firm but stable price throughout the summer and autumn rather than the rollercoaster ride we faced last year.

Numbers still seem to be on the tight side and there are more reports emerging of health challenges which may account for generally lower probes and slightly reduced growth rates.

The current shortage of finished pigs can also be traced back to the very cold spell faced at weaning time on outdoor units 18 – 22 weeks ago.

With barbeque demand continuing to improve pork is still very good value and the signs are that we could see further price rises in the weeks ahead, especially if European countries continue to stay out of the losers dressing rooms at the World Cup.

The situation in the currency markets is however painting a much bleaker picture, more due to a lack of confidence in the € than a strong £.

For those of you who find it hard to do the maths, a weak € is generally bad news for the UK pig industry (although it can help on the feed price front) as it means cheaper imports and our pigmeat exports (mainly cull sows) are also worth less.

By Friday afternoon the € had fallen in value to 82.6p compared with 85.4p seven days earlier, a fall of 3.2%, but a year ago the € was worth 88.2p.

Although there have been reports of slightly higher cull sow prices in mainland Europe, this was more than offset by the fall in the value of the € and most buyers were pulling their bids back by between 1 – 2p and it is only due to strong competition between the three main UK outlets and a lack of cull sow numbers that the drops were not greater than this, but prices were generally quoted in a 96 – 98p range with a copper or two more for big loads or on a tighter specification.

Weaner prices continue to hold at recent levels with the AHDB 30kg ex farm average hardly moving at £54.46/head, but one positive note has been a recent reduction of circa £5/tonne in ex farm feed wheat prices which should help to keep feed costs under control, but Soya remains dear.

p.s. For those outdoor producers looking to buy kit, I am attaching details of my outdoor pig equipment auction near Ipswich on the 19^th June.

28^th May 2010

The outlook for sellers remains positive and this was underlined by a further rise in the DAPP, which improved again this week and now stands at 145.46p.

The Tulip base price also moved up by a penny to 147p and the spot market reflected this with a positive stand on feel to the trade, despite the € remaining under pressure and closing on Friday worth 85.4p.

Despite the short week ahead several of the major players will be operating on Bank Holiday Monday and hence the so called “short week” had very little effect, which is often not the case.

Spot bacon was generally traded at 148p to 90kg on a 14 probe, although some factories operating on a tighter spec were a copper or two ahead of this and were effectively paying more for less.

Signs of slightly firmer demand in the fresh meat sector were evident with some of the smaller wholesalers also looking for larger numbers, perhaps anticipating barbeque demand over the holiday period and in the run up to the World Cup as many of the male population of the World stumble around spilling beer and chomping away on barbequed pork.

At long last signs are also emerging of slightly firmer prices for cull sows, but only by a copper or two and prices are now starting to nudge through the 100p/kg barrier, but they still have a long way to go to catch up with values 12 months ago.

The three major UK cull sow export abattoirs generally moved their prices up between 1p – 2p/kg, but once the Bank Holiday week is over we could see a further demand for cull sows especially if the Germans (don’t mention the War) get into the final of the World Cup.

Weaner prices are still holding with the AHDB 30kg ex farm average quoted at £54.53/head, but now that feed wheat prices have risen to just over £102/tonne ex farm some buyers are operating on a more cautious basis because of their concerns over rising feed prices and lack of any clear ideas emerging over finished pig values in the late summer/early autumn.

Perhaps we should encourage a UK futures market for pigs?  But I expect this will mean redesigning movement licenses and FCI forms!       

21^st May 2010

Like the weather demand is starting hot up although prices for next week have only moved ahead by a copper or two once suburban barbecues start to sizzle pigmeat (and alcohol) consumption should rise.

The DAPP continues to nudge ahead and now stands at 144.95p but is still 7p below its position twelve months ago.

Demand was helped by some spot buyers who had already made mid – week forays for pigs although contract buyers seemed to have better access to the numbers required and were less inclined to increase their base prices.

As a result spot bacon was generally traded in the 148p region with a penny or two more available from some buyers and few seem to be bothered about the upcoming spring bank holiday at the end of the month.

Lightweight pigs continue to earn modest premiums of 4 – 6p above bacon but the motto “weight is money” still applies.

The whole EU pigmeat trading market remains under something of a cloud however due to further concerns in the financial markets over the value of the Euro although at the time of preparing this report this is yet to filter through and the Euro closed on Friday at 86.7p which is better than its value of 85.4p a week ago.

European cull sow prices have remained under pressure with EU mainland pig processors complaining more about poor demand rather than oversupply.

There are hopes however that when the World Cup coincides with the European summer holiday period al fresco dining will lift demand for pigmeat still further (but not in Saudi Arabia).

At least UK cull sow quotes appear to have stopped falling and there were one or two reports of the odd penny extra being available for larger loads but prices still remain low with quotes mainly between 96 – 99p although some sellers were still able to haggle for prices at the upper end of this range.

The weaner market has also paused for a breath due to buyers concerns over finished pigmeat values in the August/September period but the AHDB 30kg weaner average has held firm at £54.54/head despite a further slight rise in the spot price of wheat which is now quoted at £99.80/tonne on a ex farm basis.

P.S. Two starving Mexicans were lost in the desert and saw a tree in the distance draped with juicy bacon. Miguel said to his mate Pepe “look there is a bacon tree, we are saved”. Miguel ran to the tree but before he got there was shot down in a hail of bullets. With his last breath he shouted “run Amigo, ees no bacon tree ees a ham bush!” (Boom boom)    

14th May 2010

Prices followed the upward trend set at a buoyant Pig Fair all signals seemed to be on green as far as sellers were concerned except in the cull sow market.

The DAPP took a significant upward step again this week and now stands at 144.58p and the Tulip base price also gained ground to 146p.

As a result most spot buyers had to offer in excess of 147p to find the numbers that they wanted but these are still thin on the ground.

All the signs are that there is something of a “black hole” opening up in the supply chain and this could put prices under further upward pressure in the weeks ahead although most industry pundits would prefer to see a steady rise rather than the more volatile movements that we saw in 2009 which unfortunately led to a mini slump in August/September.

Another note of caution is that now we have our “Little and Large” government coalition at Number 10 the £ has gained in value against a weaker € and this has the effect of cheapening foreign imports and also cuts the value of UK cull sow exports.

However it is not just the value of the € that is hitting demand for cull sows with reports from Europe that cold stores are full and product is still hard to move in the face of cheap competition from outside the EU.

Consequently UK cull sow abattoirs were offering less than 100p/Kg and still getting the numbers they needed as low as 95p in some regions but the usual copper or two more available for larger loads and for sellers who were prepared to haggle.

The weaner drought continues with demand outstripping supply and although the AHDB 30kg ex farm quote has remained almost static at £54.64/head sellers with large lots to offer were achieving premium prices of £2-£3 ahead of this in most regions.

Cereal market price watchers will also be aware that prices have continued to creep up with ex farm feed wheat worth close to £100/t and now might be the time for forward thinking producers to get some more cover.

As far as the Pig Fair is concerned it was really good to see so many smiling faces with the exception of one well known pig trader who “got his fingers burnt” for the first time by the scalding hot water in the gents cloakroom!

At the 2012 Fair perhaps we might even see some abattoirs/processors and marketing groups dip into their pockets and rent a stand too?

P.S. You can usually tell who the real pig farmers are at the Pig Fair (rather than reps and traders) as they wash their hands before they have a pee and not afterwards!

7^th May 2010

Although there were some bleary eyes on Friday morning following the Election, demand for spot pigs remained positive but traders were keeping an eye on the value of the €, which has followed a roller coaster track in the last few days due to the turmoil in Greece and the threats of similar financial problems in neighbouring countries as well as in the UK.

As we all know to our cost a weak € allows imports to slip across the Channel at discounted rates and from a selfish point of view pig farmers should hope that commodity speculators are more worried about the £ than they are the €.

Prices took their cue from the DAPP which moved up a fraction to 143.96p and as a result most spot quotes remained a firm stand on to average 144p, but with slightly firmer demand for lighter weights which were traded 4 – 6p ahead of this.

Although EU mainland pigmeat prices moved up last week, this had no effect on the European cull sow market which remains under pressure mainly due to competition from non EU countries, rather than too many sows in the system.

Coupled with uncertainties over the value of the € sow quotes tended to be below 100p/kg except for large loads with the majority traded in a fairly tight 97 – 100p range.

The € closed on Friday worth 86.1p compared with 86.9p seven days ago, but on Thursday things looked pretty bleak when it slipped to 84.7p.

The recent rise in weaner prices seems to have hit a plateau with the latest AHDB 30kg ex farm average quoted at      £54.52/head, although a quick glance at the calendar reveals that today’s weaner is likely to be a finished pig in mid/late August when prices normally start to wobble.

In the light of the recent Election I wonder how many pig farmers will start calling their stock boars Gordon……….i.e. because they are exceptionally “well hung”?

30^th April 2010

Bank Holiday – what Bank Holiday?

The next of a series of normally dreaded short weeks had little effect on the pig market providing further evidence that numbers are already on the tight side and when normal working resumes we could see demand continue to exceed supply.

The DAPP also continues on its welcome but steady upward track and is now at 143.93p and the Tulip base price also put on a welcome penny to stand at 145p.

Before we get too carried away however a glance in the diary reveals that a year ago the DAPP was 149.65p and the spot base price was 154p, almost 10p up on where it is today.

Although the € has wobbled due to concerns over the financial plight of some of the southern Mediterranean EU member countries it closed on Friday worth 86.8p, but this is 3% down on its value in early May 2009.

With pig numbers in almost perfect balance, spot sellers were able to command prices in the 143p region and this sector is still lagging behind most equivalent contract prices, which after premiums are working out between 145p – 149p.

But much lower EU pigmeat prices continue to pose a potent threat to the domestic market with EU sellers receiving almost 30p/kg less for their pigs than we do.

Any further fall in the value of the € will make the UK pigmeat market even more vulnerable to imports and could put a lid on any hopes of further price rises this side of September.

Another ready indicator of the state of the EU pigmeat market is provided by cull sow quotes which remain under pressure with only with only hardnosed sellers with larger loads available able to obtain bids of 100p with quotes for smaller loads according to specification circa 98p.

The recent rises in weaner prices appears to have leveled out with the AHDB 30kg ex farm average remaining static (but firm) at £54.40/head.

Once again however the whole weaner sector remains a seller’s market and there are significant premiums available for larger numbers on a contract basis.

This time next week we will know the outcome of the General Election and whether or not we have a “well hung” Parliament, although some might be tempted to add perhaps they should all be well and truly hung.

If however the “Boys in Blue” win the Election, although this might provide positive signals for the future of the national economy, any increases in the value of the £ would do nothing to help the import/export balance of the UK pig industry.

So a few votes for the Raving Loony Party (remember them?) might help?