Pig future brighter; Malton U-turns on contracts

By Peter Chrichton

THERE are further signs of a better second half of the year for pig producers.

Slaughter numbers continue to fall, with the weekly kill down to a June average of 233,000 head, compared with 267,000 in 1999 and 292,000 in 1998.

At the same time, prices are continuing to rise and the latest Malton contract offers have put a much firmer base into the market.

The contracts have the option of a 50% fixed element quoted at 100p/kg with the balance tied to the AAPP or have a “floor and ceiling” range between a minimum 85p and a maximum 120p/kg deadweight.

If the price moves outside the band, 50% of the difference is payable to the producer.

The contract period runs for a 24-month period, after which six months notice can be served, with a price review at six-month intervals.

This marks a sharp “U-turn” in Malton policy.

In May 1998, the company stated that the AAPP no longer reflected an accurate pricing structure for the pig industry, and served three months notice to switch to their own factory spot price, to the dismay of many of their contract suppliers.

On this occasion the small print is being looked at more closely.

With falling pig numbers, the feeling in the trade is that Malton will have to make this new contract as attractive as possible if it is to secure the numbers needed.

Malton may even have to re-open the Spalding abattoir, which has remained shut for over a year.

• Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry