THE MEAT and Livestock Commission and the British Pig Executive are celebrating the first anniversary of the new Deadweight Average Pig Price (DAPP).
The DAPP replaced the former adjusted Euro/UK spec average price system (AESA), which was phased out at the end of March 2004.
The AESA had been widely criticised as unrepresentative by users. The DAPP is designed to provide a wider cross section of different contracts within the pig market place.
The number of abattoirs providing weekly DAPP prices represents over 60% of weekly slaughterings, equivalent to around 100,000 pigs.
The average weight of pigs in the DAPP sample is 1.5kg heavier than in the AESA and represents the gross price paid to producers before deductions such as transport, levies and insurance.
The DAPP also excludes bonus payments and Northern Ireland‘s prices, which historically are lower than in the rest of GB.
The GB Euro spec DAPP was 106.93p per kg at its launch in May 2003, 1.62p lower than the GB AESA at the same time.
It is now at 109.7p/kg.
Because of the increased number of stabilised and cost-of-production related contracts within the DAPP the MLC believes it will iron out some of the highs and lows seen with the AESA.
Although the MLC has advised that the DAPP should not be used to fix contract prices, many producers believe that some form of index related link is still required.
A number of recent weaner and finished pig deals are already linked to the DAPP system.