Trader must act as the sheep with five legs

Based on the supply of piglets, the DCA BestPigletPrice increased from €1 to €23 in the period week 50 to week 59. The good demand for piglets and the limited supply pushed the price to the high price level. Based on conditions of the DCA BestPigletPrice this meant a price of a maximum of €70 per piglet. However, in the heat of the moment, extra percentage premiums were sometimes promised in order to ultimately have access to the breeder's piglets.

However, the piglet market has been collapsing in recent weeks. The supply of piglets is increasing, while the fattener is not asking for more piglets. Due to a difficult meat market, slaughterhouses are adjusting their slaughter programs downwards. This leads to a lower intake capacity of pigs, resulting in insufficient flow at the fattener and even causing pigs to be passed on. And that is a blow that few people had taken into account. Friend and foe alike recognize that the summer period is a difficult period for trade, but few would have dared to imagine that this period would arrive so early.

However, breeders hold their piglet dealers to the agreements made, which means that the dealer has to use all his creativity to ensure sufficient flow of piglets. The solution is sometimes sought by laying on the piglets themselves, with all the associated risks, a so-called bypass construction. Another possibility could be that the promised percentages above 18 (the maximum in the design of the DCA BestPigletPrice) should be able to be reduced to a maximum of 18 percent in periods when the market is more difficult. This matter was discussed in detail at the last public meeting in Arnhem on June 12, 2017. Those present were informed that no allowances would be exchanged.

The pricing of German piglets, among others, is surprising when compared to that of the Netherlands. In recent weeks, Vion has reduced the piglet price from €63,5 to €58, Van Rooi reduced it from €62,5 to €57,5 and the DCA BestPigletPrice from €59 to €55. Germany remained unchanged at €63 and has not made any changes today for the piglets in week 27. However, the trend report for this week indicates a -2, which means that the German piglet quotation may show a more realistic quotation.

Vion also shows that the pig market is experiencing difficulties, by lowering the pig quotation by 6 euro cents to €1,76.