Guarantee price Vion in the refrigerator for the time being

Vion informed its regular suppliers today (Friday 3 April) that the so-called price index guarantee system will be decommissioned from next week. The uncertainty in the meat market is too great, because of the corona crisis. 

With the guaranteed price, part of the 'Good Farming Balance' concept, pig farmers are paid a competitive pig price. This price is based on the German VEZG quotation (40%), the Danish Crown pig price (20%), the Spanish Llerida (20%) and the Belgian Westvlees (20%). 

John de Jonge, COO of the Pork division, explains the decision: “The meat market is too volatile to guarantee this system. Sales to countries in Southern Europe have fallen by up to 50% in recent weeks. And South Korea is also on lockdown. This puts the square valorization in a pinch.” De Jonge indicates that a lot of meat is frozen. There is still no shortage of freezing capacity, but the situation is, all in all, very critical, according to the COO. 

Intensive contact with authorities
Vion also says it will do everything it can to ensure that the supply of pigs ready for slaughter does not stagnate. To this end, there is close cooperation with bodies such as the NVWA and KDS. De Jonge points out that the inspection service is making every effort to ensure that the slaughter process runs smoothly. Vion also says it is walking the paths for support measures. “We are in close contact with the Ministry of Agriculture, the COV, the POV and Nevedi about this.”

In these dark times, there are also bright spots for Vion, because sales to China are slowly getting going again after the logistical problems in the past few weeks. "Good thing, too. Otherwise the problems would be even bigger,” says De Jonge.

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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