Mixed messages from the pig market

By Peter Crichton

THERE are currently a mixture of messages in the marketplace and Whitehall concerning the future of the UK pig industry.

As far as the markets are concerned, the recent price rise seems to be levelling off and, although the UK AESA put on a further 1.3p to stand at 98.12p, the gap between contract and spot prices seems to be narrowing.

Last week saw significant price rises with a number of spot abattoirs very short of pigs and prepared to pay up to 110p for light baconers.

Meat salesmen are reporting that retail demand has eased back slightly and that some imports are penetrating the market, with a result that most quotes are tending to be more of a “stand on” nature than further significant rises.

However, with some plants still very short of pigs prices could still move ahead in spite of a more static picture as far as wholesale prices are concerned.

Weaner producers in unaffected areas have also seen their prices improve, but only where they have been able to move stock to finishing units within the same disease category area.

In these regions 30kg weaners are being traded at close to 40 per head and 7kg weaners in the 22-25 per head range.

In areas affected by foot-and-mouth restrictions these prices can be cut by a third or more.

Cull sow marketing remains a major problem area for the industry.

Although the National Pig Association (NPA) producer group chairman Stewart Houston has hopes of an early resumption of pig meat exports from East Anglia, which would lift cull sow values, there are still no signs from DEFRA of this becoming a reality.

The NPA is also pushing for a cull sow “purchase for destruction” scheme to take unwanted products off the home market.

Stewart Houston claimed that if these issues could be resolved producers could expect to see a lift of up to 15p/kg for clean pigs.

Prices in other European countries also remain relatively firm compared with the UK market, but the weakness of the Euro will continue to give some imports a competitive edge.

Reports from Holland indicate that when normal trading patterns return there, a large volume of pig meat will be released on to the European market, which could lead to further imports into the UK.

The Dutch futures prices are currently in the 82p-85p range over the next two months indicating a relatively firm underlying demand for heavy pigs.

Until some form of export trade resumes, UK cull sow prices are likely to remain stuck at around the 25p/kg mark, with many producers receiving little more than 30 per sow from an animal which in pre-foot-and-mouth days was worth close to 100.

Another problem for UK producers is the steady rise in feed prices with fishmeal for June priced at 430 per tonne, hipro soya between 170 and 175 per tonne, feed barley at 73 per tonne and feed wheat between 76 and 80 per tonne.

Concern over the availability of non-GM feed has led to Tesco confirming that it has deferred the introduction of GM free fed pigs until January 2002.

PDNS and PMWS is continuing to hit output and, in spite of a recent BEPEX announcement that up to 100,000 has been made available to research into its prevention, so far little concrete progress seems to have been made of limiting the effects of this deadly virus.

According to Signet, the break-even cost of a PDNS-affected herd rises by between 10p and 15p/kg deadweight per pig sold.

This means that conventional farrow-to-finish units that have cost of production figures of between 90p and 95p are still operating somewhere between break-even at best and at a significant loss in many other instances.

• Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry
• Weekly pig and sheep deadweight prices