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Challenging Day for Spot Sellers as Imports Flood In

08 January 2013

UK - A quiet day for sellers with demand at typical early January levels now that the Christmas and New Year break is behind us. The DAPP took its first downward step since early October and fell by 0.22p to stand at 160.87p, but on the plus side weights are down indicating there is no particular backlog of pigs in the system, writes Peter Crichton.

Once again Tulip took the lead by leaving its weekly shout price unchanged at 159p and all the others followed suit, so the first running order for 2013 reads as previously: 163p Woodhead, 160p Gill, 159p Tulip and Vion, 158p Cranswick.

The spot market however proved to be a much more challenging environment for sellers especially for those who did not have regular homes to go to and as a result spot bacon was generally traded at around the 153p mark and only regular sellers with a weekly slot were able to get significantly more than this.

The leg trade is reported to be exceptionally weak and sellers are having to compete with foreign imports which are now coming in at bargain basement levels.

It is a sobering thought that the average European producer price has fallen from an equivalent of 149p/kg in September last year to a mere 132p/kg now.

Despite a relatively firm euro which traded on Friday worth 81.32p, the sow market also continues to suffer from larger European Union volumes in cold stores as well a higher levels of sow culling throughout much of Europe with seven of the major pig producing nations including France, Germany and Belgium less than 65 percent compliant with the January 2013 partial stall ban.

As a result although it was possible to move cull sows, prices remained in the doldrums at around 100p/kg compared with 116p/kg a year ago and this remains very much a buyers’ market for the time being.

Looking further ahead however weaner buyers are showing signs of more confidence in finished pig returns later on this year and as a result weaner prices have continued to improve with the latest AHDB 30kg ex-farm weaner average quoted at £46.21/head, but evidence is emerging that Freedom Food weaners could soon be traded around the £50/head region with more buyers than sellers.

The cereal markets have also remained in holiday mode with very little activity and most forward positions remain unchanged with January LIFFE wheat quoted at £206.40/t and £200/t ex-farm.

However producers will need pig prices to rise by at least 15p/kg to get back in the black which means we have a long way to go, especially if imports keep winging their way across the channel in our direction.

Trafficlights Peter Crichton

TheMeatSite News Desk

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