Pig prices running out of steam

EUROPEAN PIG prices are starting to run out of steam, falling by 3p/kg in the w/e Oct 1.

The European “Big Six” pig average price fell below the 100p/kg threshold to 98p/kg last week. 

Belgium, France and Germany saw the biggest falls of 4-5p/kg, which will lead to cheaper imports penetrating the GB market during the final quarter of 2004.

But the recent strength of the Euro, which opened on Mon, Oct 4 at 69p, will make these imports slightly less competitive.

The downturn in European prices has been reflected in relatively static spot and contract quotes for GB pigs in the week commencing Oct 4.

The GB Euro Deadweight Adjusted Pig Price (DAPP) remains almost static at 99.51p/kg and most spot bacon quotes are also unchanged at 100-104p.

Lighter pigs continue to earn a premium with cutters traded in the 104-108p/kg range.

But low priced imports from Belgium in particular are threatening to undercut domestic values.

Reports of relatively low GB pig meat stocks and tight numbers may help to stabilise domestic prices in the face of cheap imports.

DEFRA‘s modified June census figures now indicate a total English sow breeding herd of just 481,000 sows. 

Recent high cull sow prices, which have touched 88p/kg to average £120/head, may tempt producers to cull or reduce their herds further which will hit finished pig production from mid 2005 onwards.

The availability of cheap feed will however help to preserve producers‘ margins. 

Feed wheat traded for early October delivery is now quoted between £55 and £58/t ex-farm, which is 35% below the same period last year.

But straw prices have moved in the opposite direction due to poor harvesting weather and scarce availability, with delivered prices over £40/t in some regions.