Weaker Pound offers some hope for pig men
By Peter Crichton
WITH the value of the Pound weakening to around DM2.82, export opportunities are opening up for the UK producer, coupled with British Pig Industry Support Group activity to persuade the major retailers to switch to UK supplies.
Also on the export front are indications that EU ministers may increase the rate of export refunds as far as supplies from EU sources to Russia are concerned. This may be linked to financial guarantees to restore the confidence of exporters to this sector, most of whom stopped trading when Russia was hit by a wave of financial disasters.
Pig industry analysts point to all these factors combining to stabilise the UK market, and expect a further hardening in domestic prices in the run-up to the end of the year.
With the fall in the AAPP almost over and the AESA for the week ending 28 September down just 35p, contract prices are also expected to be overtaken by spot bids next week.
However, with Signet reporting that even the most efficient breeder/finisher units operating at a break-even figure of around 90p/kg deadweight, prices need to improve by 50% from current levels to hit this figure.
Weaner prices have also started to reflect an overall shortage in UK numbers and more confidence in finished-pig returns. This weeks spot quotes for 30kg pigs are reported in the £12 to £15 per head range, compared with £10 to £12 a month earlier.
The only static prices are for cull sows, which are still languishing between 28-32p/kg deadweight due to the large numbers still available. This values the average sow at no more than £38 per head and has put many breeders into a negative equity trap with their bankers.
Although most of the major UK banks are indicating continuing support for their long-term pig-farmer customers, there are reports of receivers being called in to wind up many of the more heavily borrowed and overexposed customers. This could lead to a credit squeeze for the entire industry, accompanied by more land and pig units being put up for sale.