The pig market is currently in calm waters, Rabobank concludes in its quarterly report. Although European exports are under pressure, production remains stable. In addition, the bank expects that the profits of fattening pig farmers will decrease at the expense of sow farmers.
It is notable that pork production increased by 2024% in January 4 in the European Union and the United Kingdom. According to Rabobank, the growth is mainly the result of recovery after the 2023 holidays. In addition, production in January 2023 was exceptionally low.
Because the sow herd has been stabilized in 2023, the bank expects pork production to remain at a comparable level compared to 2023. The bank notes that the sow herd in Spain and Poland can still increase, although this is partly due to disease pressure from PRRS and African Swine Fever (AVP) not yet given.
Exports under pressure
Due to the relatively high European prices, exports are still under pressure. In January 2024, exports were 10% lower than in the same month of 2023. Lower exports to major Asian markets remain the main cause. Exports to China, at 109.000 tonnes, are at the level of the second half of 2023. Exports to the Asian country are expected to remain the same in the second quarter, although the market is seeking a new balance as the country reduces its pig supply. Exports to Japan also decreased by 13%, or 4.000 tons.
The European market is finding new importers of by-products. As a result, export volumes to Vietnam more than tripled to 2024 tonnes in January 13.000. In the same month of 2023, the European Union exported another 4.000 tons. In addition, exports to South Korea increased by 17%, or 4.000 tons, in that month. In absolute terms, exports to the Philippines increased by the same volume. This amounts to an increase of 21%. Remarkable is an increase of 32% to the United States, an increase of 2.000 tons.
Cheaper piglets
In the field of exports, Rabobank notes that exports to the Dutch core markets are leveling off. According to the bank, this mainly applies to exports to Germany and Poland. The latter market even shows a small minus. Because the Netherlands is highly dependent on exports, the average pig price will be under pressure in 2024. In week 13, the pig price in the Netherlands was 14% lower than the Dutch average and the European average was 2024% lower in 7 than in the same period of 2023, Rabobank notes.
Meanwhile, piglet prices are following the European pattern. According to the bank, prices are at the level of 2023. Rabobank expects a seasonal decline in sow farming for the second quarter. The direct consequence of this is a lower, but positive margin for sow farmers. Fattening pig farmers, on the other hand, can expect larger margins. A wide supply of corn and soy meal on the world market also helps. As a result, feed prices will fall slightly in the second quarter.