Traffic Lights (updated Friday nights)
Sold out by lunchtime
March 6 2010
By Peter Crichton
A good start to the month with DAPP nudging ahead to 141.34p (139.24p a year ago) and by noon most pigs had been sold with no sign of any carry over to the following week at a time when cold weather is continuing to hit growth rates and availability. The forecast is for more price rises in the weeks ahead also reflecting firmer demand normally encountered in the early spring.
As a result there were very few cases of spot bacon trading at below 140p with a copper or two more available from those outlets that were still short of numbers, although with the growing trend for more and more pigs to be sold on contract, spot buyers and sellers are gradually finding themselves in something of a backwater.
Once again demand for pigmeat is being led by the major players supplying supermarkets and some of the smaller fresh meat wholesalers are still complaining that high street trade is slow and beef has also eased back from recent high levels confirming this point.
Lighter weight pigs and gilts continue to earn modest premiums of 4–8p, but sometimes it is tempting to put everything on the bacon lorry where weights of up to 95kg d/wt are paid for in full, but there is still “trousers-off” time for those whose pigs weigh more than 100kg d/wt entering a potentially costly no-go zone.
Although a mini rally in the value of the euro appears to have leveled out, further doubts over the value of sterling saw the euro rise from 89.6p in value last week to close on Friday worth 90.2p.
Despite reports of recent falls in European Union mainland cull sow values which have dropped by up to 5 euro cents (4.5p in English) over the past week, a combination of a slightly stronger euro and low sow availability saw demand remain firm in this sector with most quotes at positive stand-on levels.
Sow prices of below 100p/kg are now a thing of the past and most sellers with reasonable-size loads were able to achieve in the 105p region on a flat rate basis or slightly more where weight/grade related.
Although cull sow quotes have improved by around 10p/k over the past four weeks, they are still lagging well behind their value a year ago where average quotes were circa 117p at a time when the euro was worth less.
Weaner demand continues to reflect a shortage of numbers in the system and with over 40 percent of the breeding herd now kept outdoors, this is hardly surprising given recent Arctic weather conditions.
The AHDB 30kg ex-farm weaner average now stands at £52.69/head, which is £3/head higher than a year ago, but shrewd sellers are able to obtain significant premiums above this for large tail docked and vaccinated bunches.
“Buy now while stocks are there” is the message in the feed market because it is difficult to see how much longer wheat will be traded at below £90/tonne on an ex-farm basis, although reports although reports of fairly high stocks still left on British farms abound.
But as many feed compounders are quick to remind farmers, soya is still expensive being traded at around the £300/tonne mark, but it is just a pity that cheaper alternatives cannot be found.
With margins and profitability returning to the British pig industry, now might be the time for BPEX to consider some really active point-of-sale pigmeat promotion and a bolt-on levy to cover the costs, which at 50p/pig would generate a weekly revenue of £80,000 that could be usefully spent on advertising (but not on quangoes and internal costs) to further stimulate sales of high welfare British pigmeat.
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