Piglet surplus determines allowances

The July piglet market is at odds with the April market. The shortage has turned into oversupply. Yet propagators are doggedly clinging to the surcharge percentages. This is to the annoyance of traders and fattening pig farmers. How do propagators see this discussion?   

Southern piglets are pushing the market
According to Willy Wolfkamp, ​​breeder in Overijssel, it has been a matter of trial and error in the east of the Netherlands these weeks to get piglets placed, but there are no extreme surpluses. Wolfkamp has the impression that the market in the South of the Netherlands is under more pressure. Wolfkamp: "The surplus mainly comes from the south, but this also affects other directions." In times of surplus, quality and trading conditions become more important, for example genetics. Discussions also arise about allowances.

According to Wolfkamp, ​​it is difficult to say whether surcharges have skyrocketed this year. "Propagator and trader agree on a surcharge percentage together." According to Wolfkamp, ​​the amount of the surcharge is often determined in January or February for the entire year. The market is then usually in favor of the propagator. "If traders don't comply, they won't have any piglets. It's that simple."

Quality determines surcharge
Another propagator states that a trade relationship goes further than allowances. The bottom line result counts. Determining market-based surcharges cannot be based on the word of one trader. Multiple sources are required for this. High-quality piglets deserve a good price with an appropriate bonus, says this southern breeder. Many fattening pig farmers also accept this, because a good piglet usually becomes a good fattening pig. A surcharge is therefore an extra reward for quality. This can be quantified by flock size, genetics, flexibility and of course weight.  

A surcharge of 25%, for example on the DCA BestPigletPrice, is no exception this year. Such percentages apply during times of shortage. However, now that the piglet market has turned upside down, these percentages are a hindrance for traders.

Surplus determines the shelf life of allowances
According to Wolfkamp, ​​the sustainability of these percentages is determined by the surplus on the free market. "Only if the piglets remain lying down is there a chance that breeders will waive the agreed percentages." According to Wolfkamp, ​​this is not yet the case. There is indeed a market for Pietrain deposits. Sales of Tempo bears are much more difficult, says Wolfkamp.

Heavy pigs create price pressure
The pig market is also under pressure. Where it was thought that the pig price could exceed €2 per kilo, the opposite happened. According to Wolfkamp, ​​this is because fattening pigs are delivered much too heavy. It is better to deliver the pigs much lighter. "Then there will be much less meat on the market, which will benefit the pork price." Although Wolfkamp understands that fattening pig farmers spread the high piglet costs over as many kilos as possible. Especially now that the piglet price is dropping every week.

Cycling remains a challenge
Avoiding the summer dip on the piglet market is easier said than done. Inseminating 10% less in January in order to have fewer piglets in the summer is counterintuitive to many breeders. The ideal scenario probably does not exist in practice. "Ultimately, everyone calculates for themselves and that then creates the market," Wolfkamp puts things into perspective.

According to the southern breeder, sows are not machines. Nevertheless, supply determines the price. Producing for the sake of producing has long been outdated. In a crowded market, quality carries extra weight, as the breeder emphasizes his strategy. 

Read here how fattening pig farmers view the issue.