More price falls add pressure to pig margins

UK pig producers are facing challenging market conditions as prices continue to slip, writes Farmers Weekly commentator Peter Crichton.

The GB Euro Deadweight Adjusted Pig Price eased from 150.06p/kg to 149.17p/kg in the week ended 26 August and weekly contract prices announced by Woodheads, Tulip, Vion, Cranswick and Gills also dropped by about 1p to average 143p/kg.

As a result, spot bacon buyers also had plenty of choice in a falling market, with most trades within the 140-144p/kg range.

But the relative strength of the euro, which closed on Friday (26 August) worth 88.5p, has helped cull sow prices remain more positive, with prices generally between 105-108p/kg according to specification.

Cull sow availability remains high due to reports of more herds beings culled because of the ongoing imbalance between feed and pigmeat prices and any further shrinkage in the size of the UK herd will be reflected when the December pig census is announced.

The weaner market is also operating in negative territory, with the Agricultural and Horticulture Development Board 30kg ex-farm weaner average falling yet again to £42.63/head and reports of some spot weaners traded below the £40/head benchmark.

On a more positive note, with schools due to go back as the holiday period draws to a close, better domestic demand might help to stimulate flagging retail prices in the weeks ahead at a time when feed costs remain high, with ex-farm feed wheat at £160/t and bullish forward prices being quoted.