By Peter Crichton
PRICES in the spot market look set to reflect a shortage of slaughter pigs in the system.
The surge in sow slaughterings that hit over 10,000/week in the autumn, coupled with a collapse in gilt orders, is starting to filter down into the store and finished pig sectors.
Store pig prices have hardened over the last six weeks, and the ex-farm average for a 30kg weaner now stands at over £20, compared with only £12 in the early autumn.
According to consultants Signet, the latest production cost to the farmer for a 30kg pig is between £30-£32, so losses of over £10/pig are still hitting the weaner producer.
Liveweight market prices for finished pigs moved up by 6-10p/kg during the week, with the steepest rises seen in the north of England, where herd clearances have been at higher levels.
Although this price hike is welcome news to all pig farmers, production costs are still running well above returns.
Many producers will still be faced with borrowings – said to be as high as £500/sow – which put an impossible financial burden on breeding herds.
With the latest AESA UK index price languishing at 64p, trade sources believe that some contract sellers will break ranks and switch to spot selling in the months ahead, where premiums of 10-15p/kg may be available.
The mood in the industry is that, following the Malton announcement on 28 May that it was ditching its AESA-based buying contracts, some producers will turn the tables on the abattoirs and do the same to them.
Some of those more militant producers will be reminding abattoirs that unless they “share” some of the massive losses being suffered they, too, will soon be short of stock and under pressure.
However, the finished pig market faces further disruption by the recently announced Meat Hygiene Service inspectors one-day strikes.
The staff union Unison is thought to represent about half of the MHS employees affected.