Pig market is not keeping it dry

Combination of factors
The expectations that pig prices would fall sharply in week 28 in both the Netherlands and Germany have come true. Nearly 6 cents were surrendered across the board. It is the translation of a combination of poor meat sales, holidays, the conclusion of new contracts and currency exchange rates.

Meat sales
A decline in meat sales towards the summer holidays is a seasonal phenomenon. Purchasing interest is also declining in other products, such as dairy, due to production reductions. The temporary migration of people to drier and warmer places (including Southern and Eastern Europe) could generate some export demand, but that is not the case.

In our own country, meat demand during the holiday period is mainly linked to the weather. The rain that has fallen this week, the showers that are expected to fall around the turn of the week and the changeable weather forecast for the coming week will cause a declining BBQ index.

Meat sales were extremely difficult this week. This concerns almost all components, where, in addition to lower prices, volumes are also cut back. The minimum is purchased at minimum prices, which means that slaughterhouses are forced to adjust the slaughter program accordingly. There is no sign of lighter pigs at the slaughterhouses yet, although a few traders do mention light pigs as a result of panic offers from fatteners. This week there was an average increase of approximately 0,5 kilos. The German slaughterhouses indicate that the price will decrease towards €1,67 next week. If that becomes reality, a major change will have to be implemented.

Drying up pork supply

Although there are still dark clouds hanging over the pig market, the cloud cover appears to be slowly thinning. This will not become visible next week, but the volume of pigs hanging above the market does not seem to be greater than last week. A number of traders have managed to place the specified pigs, often due to German demand, and indicate that they have no problems with placing pigs next week. But most pigs had to be passed on. In the Netherlands as a whole, the supply of pigs is greater than the demand from the slaughterhouses, but that seems to be a matter of time, as traders estimate. The big question is whether the pig market can think about stabilizing after the coming change. The wish for stabilization is, by the way, at the forefront of people's minds.

For week 29, the change in the DCA Stock Price 2.0 will be downward. For live pigs this amounts to -€0,05, making €1,26 the price level and for slaughtered pigs it amounts to -€0,07, which gives a result of €1,60.