More pigs to be sold on contract?

By Peter Crichton

PIGS sold through auction continue to under-perform the market, fuelling speculation that more producers will move to contract selling.

The latest midweek average all-pig auction figure of 59.23p/kg liveweight is equivalent to just 79p/kg deadweight. This compares with the latest Adjusted UK Spec GB price of 93.27p/kg for the week ending 16 May.

These latest prices indicate a price differential between the spot and contract markets worth a total of £9.80 per bacon pig. As a result, the switch to contract selling, reported in last weeks commentary, is expected to gain momentum.

Sow prices are also plumbing new depths. Recent deadweight quotes of 60p/kg convert to a liveweight price of just 38p/kg. This puts the value of an average cull sow at about £76 whereas breeding companies are still looking for prices of £140-160 for replacement gilts.

This has led some cash-strapped producers to select their own farm-bred gilts for breeding. Although this is cost-effective in the short term, it could lead to a lower genetic and productive herd threshold and ultimately prove to be “penny-wise-but pound-foolish” later on.

But it is hardly surprising that breeders have been forced to take this route to survive. The old rule that “one cull sow would pay for one new gilt” no longer applies in todays market where cull sows are worth half the price of a new gilt.