Inside Pigs
Tight supply has nothing to do with DCA Stock Price 2.0
The cautious upward price movements in the pig market have been stopped this week by the German slaughterhouses. How does the DCA Scholarship 2.0 react to this?
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The increase in the German pig price (VEZG quotation: +€0,03 to €1,47 per kilo) has not been followed by the 4 largest slaughterhouses in Germany. When Tönnies announced that he would not follow the mutation, Vion Germany, Westfleisch and Danish Crown also came up with a 'Hauspreise' almost immediately afterwards. The medium-sized slaughterhouses in Germany did follow the increase.
However, the big 4 represent more than half of the number of slaughters. This means that the majority of pigs are traded at unchanged prices. The Internet Exchange responded to the tense mood on Friday, June 8, and corrected by -€0,02 to €1,50 per kilo.
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For the fifth time this year, Tönnies offers a 'Hauspreise'.
Meat sales are disappointing
The situation that has arisen is a result of disappointing meat sales. In 2016 and 2017, sales in China were lucrative; this year the opposite is the case. Sales within Europe are not great either. The pig supply in Germany is not extensive, although last week was yet another broken slaughter week. At that time, 911.339 pigs were slaughtered in Germany, with an average weight of 97,64 kilos.
Not too many pigs (301.000) were slaughtered in the Netherlands last week either; So far in 2018, the slaughter figure in full weeks has almost always exceeded 310.000 pigs. What is striking is that the average slaughter weight lost almost 1 kilo to 96 kilos. This decline indicates a significant slowdown in growth. This week too, the supply in the Netherlands is not extensive, which means that there is more than enough placement space at the various slaughterhouses.
Too much resistance
However, the tight(er) supply does not lead to higher pig prices in the Netherlands. There is uncertainty in the market as to whether German slaughterhouses will still make up the difference next week, or whether the VEZG quotation will drop in price. That is why the Dutch pig trade has opted for an unchanged DCA Exchange Price 2.0. The price of slaughtered pigs remains at €1,38 per kilo, while the quotation for live pigs remains at €1,10 per kilo.
| DCA Scholarship 2.0 (week 24) | Price range | Number of problems | Average |
| Gender €1,38 (approx.) per kilo | € 1,38 - € 1,40 | 15 | €1,385 |
| Live €1,10 (approx.) per kilo | € 1,10 - € 1,12 | 12 | €1,105 |
| Explanation DCA Markets: The developments on the pig market are at odds with expectations for this period. The shortage of piglets around February should be resolved at some point in the supply of pigs. That seems to have worked. Moreover, the temperature in recent weeks has caused slower growth of the pigs, which means that the supply is limited anyway. Yet these matters bring little or nothing to the pig market and it may benefit most from the limited supply of pigs. The meat market is still proving difficult. The necks and bacon create price pressure, while the other components stabilize. The prospects in the flesh offer little hope in the short term. Despite all expectations, stabilization is the highest achievable for the coming week. | |||