European pig slaughterers under the spell of China

Slaughter figures

The number of pigs slaughtered weekly in the Netherlands in 2017 is steadily increasing. In week 1, that number was 285.000 pigs, increasing over two consecutive weeks from 292.000 pigs to 295.000 pigs in week 4 and 297.000 pigs in week 5. The overview of slaughter data also shows an increase in average weights. In week 1 that weight was 95,67 kilos and in week 5 it increased by 0,46 kilos to 96,13 kilos.

In week 1, German slaughterers hung 930.730 pigs on the hooks. In week 2, more than 5.000 pigs were added, reaching a million in week 3. Steering the market with the deployed slaughter capacity is reflected in week 4 by a drop in the number of pigs slaughtered by more than 50.000 head. This recovered somewhat in week 5 and almost 970.000 pigs were slaughtered, with an average weight of 96,29 kilos.

Pork market analysis

The German internet stock exchange on Friday (10/02) gave up the profit of the plus 1 earlier this week, resulting in 1,58 euros. It is a sensitive blow in a week in which it became clear that Germany's largest pig slaughterer, Tönnies, was told that the approval to supply meat to China has been temporarily suspended. The Germans did not excel in quietly building up the pig market in the first weeks of 2017 and this suspension will not contribute to that. The suspension was reportedly prompted by the fact that the papers or documents accompanying the shipments were not in order. And this seemingly minor omission is severely punished with the withdrawal of the permit. Insiders point out that obtaining a permit is a time-consuming affair and that getting it back is expected to take some time. Exports to China are very careful and errors are not accepted.

For Dutch slaughterers with a China recognition, this means that extra vigilance is required. China sees Europe as one country, which means that controls are being increased in the Netherlands, because the Dutch pig market cannot afford such a nonsense. Consider, for example, the price formation of piglets in recent weeks, where a drop in pig prices would be extremely inopportune.

The situation on the Dutch market is one of few changes. The slaughterhouses indicate that compared to the planned slaughter programs, there are sufficient pigs that are currently in good weight. Sales of meat in the coming week are expected to be the same as this week. With the Tönnies debacle in mind, it must be hoped that the pork price can remain stable in the coming weeks.

The DCA Exchange Price 2.0 will remain unchanged for week 7 at 1,17 euros for live pigs and 1,48 euros for slaughtered pigs.