Opinions Robert Hoste
Don't celebrate now, but invest
The sky's the limit. At least, that is currently the thinking among pig farmers, because finally the price is going up seriously and the feed is getting cheaper. This situation is mainly due to the outbreaks of African swine fever in China and many other Asian countries. This is of course good news for pig farmers, but how long can this sentiment last?
The pig cycle now has a pattern of about 4 years, which means that the pig market corrects itself in about 2 years. On the one hand, this is due to the expansion of production in the United States, Canada, Brazil, Russia, Mexico and Argentina. In the European Union, production will also increase, although these are not always the most efficient producers.
On the other hand, consumption in East Asia will decline. The gap created in those countries cannot be filled with production elsewhere; there is simply not enough meat and meat is also very expensive. Despite a cultural attachment of the Chinese to pork, they will therefore eat less meat and/or switch to other types of meat (poultry meat).
Free from African Swine Fever
If we assume that the Netherlands will remain free from African swine fever, then the pig price is expected to remain at a good level for a while. However, this may mean that the restructuring scheme will come under pressure, although the real entrepreneurs are not short-sighted. They also know that after a hefty price peak, there will be an irrevocable trough and this time it can turn into a deep trough.
If we do have to deal with this animal disease in the Netherlands (or Germany), it will be disastrous; our export market, for example, will suffer permanent damage.
Structural investing
We must use a crisis elsewhere in the world to invest structurally and prepare here for what is to come. One thing is in any case certain: the dependence on the world market leads to additional price fluctuations, which means that more financial buffers are needed. The need to take shelter in producer associations and intensive chain cooperation will increase. In the Netherlands, we are not really at the top when it comes to animal health.
It is time to strive for maximum hygiene and animal health, possibly even SPF production. In that sense, African swine fever in China can sometimes lead to a favorable structural change in the Netherlands.
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Robert Hoste
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