By Peter Crichton
THE UK AESA, on which most contract prices are based, has continued to rally, putting on 7p/kg over the past 6 weeks, to stand at 99.71p/kg.
Spot prices have shown a much sharper rise over the same period, with most baconers trading between 111p/kg and 113p/kg (less 2p/kg for UK Spec plants).
Although producers are starting to bring pigs forward with only three full selling weeks left before Christmas, demand continues to outstrip supply.
Analysts predict that the UK AESA will put on a further 5-7p/kg between now and Christmas, which could mean that contract prices with added bonuses will match or overhaul spot quotes by the end of the year.
And although January and February are notoriously difficult periods for selling finished pigs, the benefit of higher contract prices should help to stabilise the more fragile spot market.
However, some retailers are looking to source cheaper foreign supplies and imports are beginning to undercut the UK market.
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry