BBQ weather boosts sales, but the price?

The fact that the demand on the pig market is enormous was confirmed on Friday afternoon, May 26, by the Internet Exchange, which rose by no less than 4 cents to 1,90 euros. This means that the German indicator is entering a rare price zone. The times that the internet auction recorded above 1,90 euros can be counted on one hand. The current record dates from the autumn of 2012, when 1,98 euros was briefly touched. Given that the calendar now only shows May, a new price record on paper is a possibility.

Market is BBQ driven
The German pig price moved sideways on Wednesday at 1,80 euros, which means that the distance with the Internet exchange is now outside the normal bandwidth of 6 cents. If the Internet fair continues next Tuesday, the North/West committee will probably start moving on Wednesday. It must be stated that the improving pig market is mainly BBQ-driven. Therefore, a negative correction cannot be ruled out in advance on Tuesday. Especially because the following week (week 23) is another broken week because of Pentecost.  

Following the pig price, meat prices for the various components have risen. The front broke the downward trend of recent weeks and rose by 3 cents. A similar plus applies to hams. The bellies and middle section remain unchanged up to plus 2 cents. 

Wedge at meat market
It must be stated that the meat market is not moving along with the rising pig prices across the board. Selling prices to the meat industry (meat products and sausages) are under heavy pressure. These companies cannot tolerate higher purchasing prices. In Germany, 3 companies are currently in financial trouble.

At other companies, including in the Netherlands, the curtain is also in danger of falling due to even higher pig prices. The slaughterhouses also reported stable prices in the industrial sales channel last week. Exports outside Europe also do not allow higher pig prices. China seems to be turning around request less volume. 

On the basis of a significantly lower pork price, "sausage makers" have entered into long-term contracts with retailers. This often involves a safety margin of 15 to 20 cents. However, the German pig price has already risen by about 30 cents this year. This is disastrous for the meat industry, which reportedly consumes around 25 percent of the total slaughter volume. 

Increases based on retail
In short: the increases on the pig market are mainly based on retail. In sunny weather with high temperatures, supermarkets want to be assured of full shelves. Slaughterhouses often have contracts with a delivery obligation. As a result, there is a hunt for pigs on the market. The quantities are necessary to be able to cut out the grill products. This explains why all parties on the Internet exchange were traded this week. There are plenty of pigs in the Netherlands. At least, that's what traders report. Some are still struggling with the volume of pigs to be placed in the coming week. There is no certainty that this will work.

DCA Stock Price 2.0 stabilizes
Most parties on the market are therefore not in favor of forcing the market with an increase. The "lid on the nose scenario" is too big for that. That is why the DCA Market Price 2.0 will not increase this week and the price for slaughtered pigs will remain at 1,74 euros. A similar fate awaits this week for the price of live pigs, which remains at 1,37 euros.