Hard crash for US pig price

The Iowa-Minnesota quotation lost more than 35 dollar cents last week and was trading at $2 per kilo on Thursday, April 0,96. The mood has changed like a leaf in the past week, because pig prices were still on the rise until the end of March.

Lockdown is taking hold
The coronavirus is the main culprit. Just like in Europe, America also has a 'lockdown', which means that restaurants keep their doors closed. As a result, meat supplies are increasing rapidly. The bacon price has now fallen to a 20-year low. Ribs and ham prices have also plummeted. All in all, the carcass has become considerably less valuable 

In addition to the sluggish meat sales, the price is depressed by a large supply of pigs. Last March, the US had 77,6 million pigs, approximately 4% more than the same period in 2019. Moreover, there is still the necessary supply in the pipeline, as the sow herd has also increased in the same period. Due to the growth, slaughter capacity is being intensively tapped. As in Europe, there are concerns about staffing in slaughterhouses. This may result in a loss of processing capacity 

In addition to physical pig prices, the pig futures market is also under great pressure. The quotation in Chicago, the April contract, has fallen by almost 40% in recent weeks to around $0,40 per pound (0,45 kilo). This is the lowest level since October 2016.

Competitive advantage on the global market
Now, the pork price in the US often tends to fall sharply or peak, but last week's crash can be called extreme. European pig prices also fell in March, but not nearly as much.

However, the pressure is on pork price here too is on the rise again, partly as a result of the price fall in the US. As a result, American exporters now have a competitive advantage in the global market