Inside Pigs
Higher pig price seems to be a matter of time
Now that 2019 is already a few days away, life is returning to its normal rhythm. This means that the broken weeks are over for the time being, but the pig supply remains ample. The signals in the longer term are quite positive.
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In the last weeks of 2018, the supply was ample and this remains the case at the start of 2019. In itself this is not surprising, given that 2 slaughter days were canceled in the past 3 weeks. The aftermath of this will still be noticeable next week.
Internet stock market opens in red
The Internet Exchange is back on the air after an interruption of several weeks and the first listing of 2019 was not surprising. The market indicator has fallen by €0,01 to €1,39 per kilo and is therefore still well above the German pig price (the VEZG quotation). This remained stable at €1,36 per kilo. The fact that only 6 of the 16 lots were traded indicates that the demand for pigs has yet to come to fruition in Germany.
Since many pigs have been slaughtered in the run-up to Christmas, the meat supply is ample. In addition to the various meat parts that are popular around Christmas, other parts also come onto the market. The result is that meat prices are under slight pressure. In various European countries (France and Spain) it is hoped that supermarkets will come up with promotions that should stimulate consumer demand.
Despite the ample meat supply, there is no reason to fear a lower pork price. The margins of slaughterhouses can absorb this, the market hears.
A matter of time
The ample pork and meat supply is likely to last until mid-January. After that, the market may relax and this may lead to higher pig prices as the weeks go by. Historically speaking, it takes a while before prices seriously start to rise. However, in advance there is no reason to look gloomy at the market situation.
If the situation at the piglet market is a precursor for the pig supply in the long term, then there could be a shortage this spring. Once again because the German pig herd has shrunk. In terms of exports, the pig price obviously also needs a boost and that could be China, although there are no concrete signals yet that China will actually import significantly more pork.
For the time being, the DCA Exchange Price 2.0 remains at €1,28 per kilo for slaughtered pigs. The price of live pigs is unchanged at €1,03 per kilo.
