Inside: Pig Market
Sliding with pigs, despite high slaughter rate
Thanks to full slaughter lines, the Dutch pig market can still survive to some extent. At the beginning of January, however, the market still has a considerable amount of catching up to do in terms of pig supply. The meat market is also in flux. What are the developments?
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It is not easy to get all the pigs placed in the first week of January. In the last week of December, carcass weights increased again to 97,40 kilos (+1,10 kilos). The already heavy pigs have not become lighter. Normally, slaughterhouses slow down their slaughter pace in the first weeks of a new year, because meat sales are then lukewarm. This is less the case this year and slaughterhouses are taking the pigs fairly well.
There is also a 'pig plug' in Germany as a result of the broken slaughter weeks. There too, the slaughter lines run at a smooth pace, so the market is not at a rush hour. The fact that the Internet Exchange stabilized at €1,40 per kilo on Friday is a sign that the worst of the pressure from pig prices appears to be over. Half of the 10 lots offered at the auction were sold.
Snowfall in Alps blocks exports
The extreme snowfall in the Alps (Austria and Switzerland) is currently hampering pig exports. Live pigs that were to be exported to Italy this week therefore had difficulty getting away. This means that some traders have to sell extra consignments in their own country. On balance, however, the effect on total supply is small. From week to week, live pig exports to Italy fluctuate somewhere between 100 and 1.000 pigs. Despite the full slaughter lines, people have to move around to get the pigs placed. Some traders are even stuck with hundreds of surplus pigs.
Tame meat market
The meat market still has to find its feet in the new year. There are especially few buyers for the more luxurious parts of the pig (hams and tenderloins). January is usually not the month when meat consumption is booming. It results in reductions for the various parts (front and middle section). If the meat market comes under further pressure in the coming weeks, it cannot be ruled out that the pork price will take a hit. In that respect, slaughterhouses are on the hook if margins deteriorate.
More clarity in the coming weeks
In the coming weeks it should become clear how the pig supply and the meat market will respond to each other. The market estimates that finding a balance could take a few weeks. For the time being, the market relies on the smooth slaughter pace. The DCA Exchange Price 2.0 therefore remains at €1,29 per kilo for the slaughtered pigs. Also unchanged, the price of live pigs is €1,02 per kilo.