August 8, 2011

UK's pig prices spiral downwards

UK's pig prices persist to decrease with the GB Euro Deadweight Adjusted Pig Price declining by GBX0.58 (US$0.01) to reach GBX152.34/kg (US$2.48), according to Farmers Weekly.

The big four contract buyers - Vion, Tulip, Woodheads and Cranswick - all dropped their contract base prices by GBX2 (US$0.03), which now range between GBX146.5 (US$2.39) and GBX150 (US$2.44) per kilogramme.

Spot quotes also followed this downward trend, with bacon traded at GBX144-148 (US$2.35-2.41) per kilogramme according to region and specification, with lighter pigs earning only modest premiums of GBX4-6 (US$0.07-0.10).

Despite high beef and lamb prices, pork still appears to be something of a loss leader in the retail sector, which, when coupled with rising UK live pig availability, has led to the current price drop.

Cull sow export quotes remained at relatively firm levels within the GBX100-105 (US$1.63-1.71) range, according to region and specification. The release of recent undercover Animal Aid footage shot at Cheales Abattoir did nothing to undermine cull sow prices.

The weaner market, however, remains a very difficult trading sector, with a lack of finishing space coupled with buyers' concerns over falling finished pig prices. The latest AHDB 30kg ex-farm weaner average remains pegged at GBP45.61/head (US$74.88), which remains below producers' cost of production levels.

With harvest under way, new crop wheat prices are being quoted at GBP153/tonne (US$251) ex-farm, which might point to slightly lower compound feed prices in the months ahead. However, further falls will be needed before this delivers any significant financial benefits to hard-pressed pig producers.