Meat processors sound alarm for expensive pigs

The rapid rise in the price of pigs is a major concern for meat processors. The association for the meat products industry in Europe (Clitravi) calls on all parties in the pig chain to share these costs together.

The price of pork worldwide has risen by about 30% since January. The reason for this is the sharp increase in demand from China, which is caused by the country's struggle with African swine fever. Rabobank expects Chinese production to fall by 35% this year. The impact of this drop in production is significant, because approximately half of the production takes place in that country. 

Pork main raw material
The increased pig prices mean that meat processors in Europe are faced with more expensive raw material costs. The impact of this is significant, says Clitravi, given that the price for pork is 50% to 75% of the cost price. Moreover, pork is the most important raw material for the European meat products industry. Clitravi expects these higher prices to be the new reality for the time being, the organization writes in a press release.

The annual meeting of Clitravi recently took place in Salzburg, Austria. Affiliated organizations there, including the Association for the Dutch Meat Industry (VNW), have expressed concerns. Clitravi even speaks of a threatening situation for the meat processing industry and calls on the chain partners to jointly bear the burden. 

Speculators disrupt market
Jos Goebbels, chairman of the VNW, also expresses his concerns. His estimate is that the market is driven by speculators who anticipate demand from China and therefore freeze large quantities of pork in cold stores across Europe. The availability of pork for the meat processing industry is therefore coming under great pressure.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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