PIG PRODUCERS‘ returns are set to improve in the second half of 2004, as feed prices fall and pig markets rise.
After a volatile first six months of the year forward and spot feed ingredient prices have eased significantly.
The Home Grown Cereals Authority quotes June feed wheat at £76/t ex-farm, compared with £104.70/t at the start of the year and £69/t for harvest 2004.
Reports of additional supplies of up to 1m tonnes of Black Sea wheat potentially hitting the market later this season have also put downward pressure on prices.
London wheat futures have eased by 10% over the past five weeks, with September to November movement periods settling in the £70.40-£71.90/t range.
Proteins have followed the same downward track, with oilseed rape prices slipping from £180/t at the start of the year to £160/t now.
UK delivered values for soyabean meal are now at £172/t, representing a 20% reduction since the end of 2003.
Failing a crop disaster in the EU or elsewhere in the world, cereal prices are not expected to rise significantly in the short term.
Providing pig meat prices can be maintained pig finishers should therefore be able to improve on their current slim margin.