Temporary upturn, or is the pig market booming?

The turnaround taking place in the pig market is unprecedented. At the end of July, the German slaughterhouses announced to want to return to €1,35 per kilo, but the Internet exchange now quotes €1,60 per kilo. This is a difference of almost €25 per delivered fattening pig. Although the volume of the Internet exchange is a fraction of the total, the listing can be seen as a reliable indicator of how deeply slaughterhouses want to dig into their pockets.

The reason for the revival stems from a tight supply. The German slaughter figure recorded 873.888 pigs last week, which is a negative difference of more than 6,5% on the 5-year average. Never before this year has the difference in a full slaughter week been so great.

Holding pigs
There is a lot of pressure on pigs in Germany. Now that the market is skyrocketing so quickly, pork farmers are holding on to the supply. This is possible because there is not always piglet pressure. The high manure disposal costs and gloomy prospects on the pig market, has made some fattening pig farmers decide not to impose. This may now change, although the pork price will have to show structural resilience.

For now, the shortage can be attributed to the slowdown in growth. Temperatures have now dropped, returning normal conditions. The market has also woken up in the Netherlands. The supply is tight. In the past week, declarations from traders at DCA-Markets were still cautious; now they are opting for hefty increases. It is said that the market is governed by the issues of the day. The chance that the revival will return like a boomerang cannot be ruled out.

More demand for parts
A starting point is that the meat processing industry will soon restart. These parties also closely monitor the pig price and are increasingly realizing that parts prices have bottomed out. The demand from Italy for hams is increasing again, and the prosecutors are also being pressed. It leads to slightly rising meat prices. 

The demand for BBQ parts, on the other hand, is lackluster. This is because in certain parts of Europe it is forbidden to light a fire in public due to the drought. On the world market, sales to China are slow; export volumes to Japan are stable.

Stock price attracts 
The tight supply means that the pork price is quickly gaining ground. The DCA Exchange Price 2.0 for slaughtered pigs increases by €0,07 to €1,41 per kilo. The price of live pigs increases by €0,06 to €1,13 per kilo.