By Peter Crichton
Most of the attention created so far by the worsening price slump in the pig sector has been focused on the finished pigs.
Weaner pig producers are the latest farmers to face the huge losses now spreading to the breeding company sector and to equipment suppliers.
The abandonment of the All Average Pig Price (AAPP) by most abattoirs has led to a massive reduction in the number of weaner buyers prepared to keep purchasing on a contract basis.
Until recently, most weaner producers sold their pigs on either formula- or spot-based contracts. Formula prices were usually tied into the AAPP on a 30-35% percentage basis for a 30kg pig.
But with the AAPP standing at around 90p/kg, weaner producers should currently be receiving around £29 per pig on an average formula pricing system.
This comes as a financial disaster to the weaner industry who felt they had a reasonably stable pricing arrangement. Most AAPP supply contracts have now been torn up and the weaners are on the spot market at a huge discount.
Current spot weaner quotes are in the region of £2-£4 per head plus 50p/kg. That represents a total price of £17-19 per 30 kg pig, say weaner pig trading groups.
With Signet quoting production costs of £30-32 for a 30kg weaner, breeders are staring at huge potential losses in the months ahead.
The situation is also grim for producer of 7kg pigs sold on to Isowean nursery units.
Until recently these pigs were also traded on an AAPP linked price of about £19 per head. This price has now been slashed to £7.