UK Pig Price Rally Continues

In spite of all the dire warnings from the abattoir sector that the recent pig price increase will run out of steam, current spot quotes are pointing to the sellers market in the weeks ahead.

There are reports of spot baconer buyers looking at quotes in the 105p to 110p/kg range for next week in an effort to secure dwindling supplies of pigs. Contract buyers are also starting to see their numbers slip as producers switch to the more lucrative spot market.

The UK AESA only managed to put on a modest 0.55p/kg to stand at 94.12p/kg this week which sees the index price lagging over 10p/kg behind spot quotes worth around 7/pig.

Although there has been widespread criticism from the retail sector of the recent MLC advertising campaign, which highlights the welfare and MBM issues connected with some imported pigmeat, this does not seem to have affected demand for UK or imported pork products.

Imports from Holland alone rose a further 120 tonnes last week and now account for 20% of all their exports at a massive 2,840t.

Higher pigmeat prices in the rest of the EU have played a major part in lifting UK pig values. At the same time the long awaited strengthening of the Euro has also helped the position of our pig producers.

The Euro has improved in value by almost 10% in recent weeks and although this may have a slight upward effect on feed prices it has a far greater benefit for the producer at the selling end.

UK weaner prices are still however held back by the scourge of PDNS and PMWS which continue to hit herd output, especially in East Anglia.

A “two tier” system of weaner pricing is emerging. PDNS free 30kg weaners are worth up to 37.50/head whereas pigs from affected herds are trading at a discount of up to 10/head.

As a result the overall UK Farmers Weekly 30kg ex farm weaner prices has hardly moved and is still stuck at 32.24/head.

Demand for 7kg pigs has however moved ahead more strongly with ex farm quotes for healthy EP vaccinated consignments hitting 23/head.

On the marketing front there are reports that most of the major supermarkets have indicated that they will be supporting the British Farm Standard “little red tractor” logo.

This kitemark will only appear on British farm assured food but has yet to be widely accepted by many UK pig farmers who feel that it has no realistic linkage with meat products and looks more like a “Toys R Us” trademark.

In the High Court this week hundreds of pig farmers supported the BPISG initiative to seek over 200m in compensation from the Minister of Agriculture for their alleged discrimination against the British Pig Industry during the BSE crisis.

Court action began on 7 & 8 June to try and persuade the judge that the industry was unfairly treated by MAFF and should be compensated for the extra 5.26/pig BSE “tax” arising out of the crisis.

MAFF officials have refuted these claims and it remains to be seen which way the judge will go on this when he makes his announcement.