Was the DCA increase in BPP a robbery or a reality?

Anyone who has followed this quotation since the existence of the DCA BestPigletPrice (BPP), and has therefore also attended the two annual information evenings, will have noticed that there is regular tension in the pricing of the Dutch piglet. In times of less supply, as occurred last spring, it was not only the basic price that rose. The allowances also had no limits at that time. There was a market for everything called big at that time. The question arose: "How do you get a grip on the piglet supply?"

Surcharges
Friction will further arise when the pig market turns and the demand for piglets decreases. As a trader, you will have granted exorbitant surcharges (above the percentages with which the BPP works). Reversing this could, in the worst case, lead to losing a propagator. Or as a trader you have a pair of piglets left over every week that there is no room for in practice. What may be the impact of these matters on the basic price of the BPP?

Design BestPigletPrice
The design of the BPP never allowed for exorbitant allowances to be awarded. Anyone who has applied such commitments in practice will first have to correct them to percentages as discussed and agreed at the time when the BPP was set up. Moreover, at the last public meeting of June 2017 in Arnhem, it was once again emphasized that exchange of allowances are not an issue. This also means that the basic price should not be affected by surcharge extremes.

VLN members known
All members of Vee&Logistiek Nederland (VLN) joined the start new piglet listing were able to have their say and were included in the developments that were underway. The objectives that the initiators what we had in mind at the time, increasing piglet quality and producing cyclically are things that are not easy to cut with scissors. This was and is not strange to the sector either.

Current practice
Now that in practice it appears that the supply of piglets has been greater than demand for a number of weeks and traders are struggling with sales, the BPP seems to have to pay the price. The drop in the basic price is not happening enough for many and discussions about tinkering with the high surcharges are being avoided. The highest base price of the BPP has been €59. Looking back, this level is probably the primal source of the current feeling about the piglet quotation, which could have been a good €1 to €3 higher. Then the surcharges would also have been better controlled.

Residualbig
At the moment, it is mainly the surplus piglets that leave a heavy mark on the market. However tempting it may be to focus on that, that is not what the listing is intended for. Moreover, in the event of a major correction, the price of the 'residual big' will fall even further. The increase in the BPP in week 33 (a plus of €0,50) indicated that there was more appetite for the piglets, after the market seemed to relax somewhat a week earlier.

Stabilization
The interest shown in piglets did not grow further in week 33, causing the BPP for week 34 to move sideways and amount to €49. What was striking this week was the growth in the number of piglet price reporters that contributed to a stabilization of the price.

Also read:
How does a piglet listing function best?
Piglet surplus determines allowances
Piglet market without supplements does not exist
The sector can do well with DCA BestPigletPrice
Real challenge for DCA BestPigletPrice is coming