Some signs of pig price recovery

By Peter Crichton

RECENT signs of the start of a much needed recovery in UK pig prices have started to emerge.

Although the latest UK AESA could only manage a 0.43p rise to stand at 75.15p/kg this week, deadweight and spot quotes are expected to show increases of between 3 and 5p/kg across the board.

The Glanbia forward two-week price has already been hoisted by 5p/kg to 80p, and the other major players are expected to follow suit.

If the larger abattoirs such as Malton, Dalehead, Cranswick and Glanbia are all able to lift producer prices, together this will add further upward momentum to UK pig returns in the weeks ahead.

A higher UK AESA may force supermarket buyers to give more for the product and will go some way towards increasing producers cheques as well.

Other signs of better prices are more offers of fixed/floating finished pig contracts being put on the table.

Most of these run for 12- to 18-month periods and include a 50% fixed price element at about 95p/kg, and 50% floating based on the UK AESA.

With the UK AESA currently at 75p and a fixed price of 95p, this would give a producer return of the average of the two prices at 85p/kg on present quotes.

With some breeder finishers now claiming that they can produce finished pigs at about 85p/kg deadweight, a fixed/floating contract of this nature would at least provide them with the guarantee of not less than a break-even price, and the chance of a profit if the UK AESA continues to improve.

Pig prices in the remainder of the major EU production countries are also firming, and this had been heightened by the recent jump in UK cull sow prices.

Almost the entire domestic cull sow output ends up in Europe, and is a ready barometer of trade levels throughout the EU.

Recent cull sow deadweight quotes have risen to almost 50p/kg, compared with 35p four weeks earlier.

Weaner prices are also on the rise and the latest Farmers Weekly 30kg ex-farm average is 21.81 – almost 50p/head up on last week.

Reports are filtering through of some vaccinated selected batches of 30kg weaners being traded at up to 27/head.

Another factor in the current UK price improvement is the growing shortage of slaughter pigs in the system.

The latest slaughtering statistics are flagging up a 12 month drop of almost 50,000 pigs/week.

Analysts believe that when the full effects of the heavy sow cull last autumn filter through, the late spring weekly figure could drop by a further 20,000 to 30,000 head.

At the same time, UK pig numbers are being hit by the continuing dual effects of PDNS and PMWS, which is believed to have wiped out over 15,000 head in this country.

Beef and lamb prices have also moved up which should help pig producers to maintain their own returns at a time of year when meat consumption normally improves.

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

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