UK pig prices remain under pressure with the latest GB Euro Deadweight Adjusted Pig Price easing by 0.78p to 151.12p/kg, writes FW commentator Peter Crichton.
Demand for spot bacon has remained subdued with producers concerned that prices could drop below the 140p/kg barrier, but with one or two exceptions most quotes for pigs next week tended to be between 140p/kg and 143p/kg according to region and specification.
Lighter pigs continue to earn modest premiums, but better pig availability coupled with subdued retail demand is putting the whole supply chain under pressure.
The recent civil disturbances in London and other major cities are reported to have affected retail demand across the board during the earlier part of the week, but once order has been restored food shopping volumes should return to normal, which might to some extent help to stimulate demand in the pigmeat sector.
The civil unrest may also have contributed to a slight fall in the value of the pound and a stronger euro which continues to have such an effect as far as the pigmeat supply/ demand trade balance is concerned.
The euro closed the week worth 87.57p, compared with 86.6p seven days ago and as a result cull sow quotes showed a firmer trend with delivered prices mainly between 104–107p/kg.
In the face of indifferent prices for finished pigs, weaner values are continuing to fall with the latest Agricultural and Horticulture Development Board 30kg ex-farm weaner average dropping to £43.68/head, which is its lowest level since mid-April.
Another negative for the industry to consider has been a slight improvement in cereal prices over the past week, not helped by indifferent harvesting weather, with the latest ex-farm feed wheat price quoted at £152/t. Futures prices are also tending firmer with November wheat quoted on the LIFFE market at £162.25/t and July 2012 looking even more expensive at £171.20/t.