Inside: Pig Market
DCA Stock price plummets in turbulent market
There are currently no positive leads on the pig market. How does the DCA Scholarship 2.0 react to the unexpected commotion in Germany?
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The pig market is tough this week gone down. The Internet Exchange looked at the level of the German pig price (VEZG) on Friday, January 12 and fell by €0,04 to €1,34 per kilo. The fact that the majority (6 out of 10) of the lots offered were traded is a signal that there is interest in buying at this price level. Yet the flag in Germany is not hanging well. The already ample pig supply has only increased due to this week's reductions.
German pork farmers are making every effort to be able to deliver early next week. After all, the chance that the VEZG quotation (on which many pigs are paid) will correct towards the level of German slaughterhouses is plausible. However, it is urgent to get pigs placed. Dutch traders also notice this. The pig supply is therefore far in excess in many places.
Pointing fingers
There is not enough sales for many parts on the meat market, which appears to be in dramatic bad shape. These parts are therefore frozen for later in the season. The costs and risks are translated into a lower pork price at Tönnies, Westfleisch and Danish Crown. This is how annoyed market participants argue, who hold Tönnies guilty for the 'Hauspreisen' in Germany.
Tönnies parries this criticism. They point to the Westfleisch slaughterhouse, which previously released the 'Hauspreis'. Tönnies uses the 'Hauspreis' from Friday 12 to Wednesday 17 January, because the quotation only came out on Thursday instead of Wednesday. Be that as it may, according to advocacy group ISN, pig farmers are probably better off now and in the future at medium-sized slaughterhouses in Germany.
Dutch market
The Dutch slaughterhouses moved along with the movement of the VEZG listing this week. However, the fact that the large slaughterhouses in Germany use a 'Hauspreis' is not yet priced in. This makes it likely that Dutch pig prices will turn red again next week. The DCA Exchange Price 2.0 therefore remains a significant reduction from €0,07 to €1,22 per kilo. The price of live pigs drops by €0,06 to €0,96 per kilo.