Pig business moving from muck to money?

- 09 February 2001

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By FWi staff

AFTER one of the longest periods of negative prices many can remember, further signs emerge that the outlook for UK pig prices is moving from the “muck” into the “money” sector.

The latest Dutch AEX futures market quotes are pointing to 100p/kg plus-returns in May and June this year.

Reference Prices in most major EU pig production countries have also risen, and 100p/kg for a heavy carcass is equivalent to 110p/kg for lighter UK weights.

There are further signs that a mixture of environmental, welfare and economic pressures will also inhibit herd expansion which in the past has been the undoing of the pig industry.

In the UK MAFF are reporting further interest in the Outgoers Scheme, with over 2500 applications for forms from producers looking to decommission their units for not less than 10 years.

IPPC regulations (Integrated Pollution Prevention and Control) will add thousands of pounds to producers costs, with the NPA complaining that this will disadvantage their UK members when compared with much more modest contributions in other European countries.

These regulations will apply to intensive producers with more than 750 sows or 2000 finishers and will kick in in 2007 for existing units or immediately for new buildings or alterations.

Evidence is also emerging of the very high level of refurbishment costs faced on many UK units after such a long period of negative equity, which may in some cases lead to their closure and a further reduction in the supply of pigs.

Outdoor producers are also having to think long and hard about the viability of their breeding set-ups.

Not only is worn-out equipment long overdue fror replacement, but there are problems in running their herds in areas of recent high rainfall.

As a result of the additional capital expenditure faced by the industry and the continuing slide in the size of the UK pig herd, numbers of slaughtered pigs are continuing to tighten up.

Although this week the GB AESA slipped a further 1.61p to stand at 95.85p/kg deadweight, spot and option market quotes are starting to move forwards.

Some analysts are predicting that March and April prices will be over 100p/kg deadweight for baconers and this view is to some extent reflected by sharply higher prices being paid for store pigs.

The latest weaner quotes are seeing PDNS- and PMWS-free 30kg pigs being traded at ex-farm prices in the north of the country of over 40 per head, with the best vaccinated and tail docked batches achieving premium prices of up to 45 per head.

PDNS- and PMWS-affected pigs are, however, proving much harder to trade because of the potentially high mortality risk they also carry.

Pig illnesses are an EU-wide problem and this has led PIC to organise meetings between scientists and vets from throughout Europe in a bid to search for what is known as Factor X to stop the disease from spreading and to find a cure.

An additional problem with PDNS is that the symptoms are very similar to Classical Swine Fever, and this has already led to a number of UK slaughterhouses having their production stopped while suspect carcasses are being checked out.

This has occurred twice at Malton recently and once at Bradshaws in the Midlands last week.

Although the high mortality arising from pig disease may improve prices in the market place it also puts intolerable financial pressures on producers whose herds are badly affected.

PDNS and PMWS appear to be spreading throughout the UK, Europe and the USA.

Scientists in the USA are reporting dramatic increases in PMWS and are still struggling to come up with effective control measures.

Batch farrowing and block weaning are seen as ways in which some of the stresses faced by young piglets at weaning time can be reduced, but according to UK vets there is still a “missing link” as far as controlling this disease is concerned.