Full cold stores makes slaughterhouses nervous

While calm returned (more or less) to the Dutch pig market this week, unrest is emerging in our Eastern neighbors: The large German slaughterhouses ignored the unchanged VEZG quotation and charge a Hauspreise of €1,80 per kilo. In addition, Tönnies also cut the sow price - by some delay - went down 7 cents.  

Overcrowded cold stores
In Germany, major events are banned until August 31, which is a loss for domestic (sow) meat sales. But sales outside the country's borders are also disappointing. Freezing meat is increasingly a problem. Cold stores in Europe are reportedly packed. Slaughterhouses complain about this, as well as processors and trading houses that want to put away butter or French fries products, for example. Freezing costs are rising rapidly due to market forces. And that creates risks.

Especially because German slaughterhouses fear a significant price drop in the event of an outbreak of African swine fever. And considering the virus was detected just 10 kilometers from the Polish-German border, that is a realistic problem. 

China is a bright spot
In the Netherlands, the supply is wide and the pressure among our Eastern neighbors is clearly palpable. An advantage is that the supply will shrink towards the summer. The sales opportunities in China are still positive. In the first quarter, the country produced 10,3 million tons of pork, a decrease of almost 30%, according to its own statistics. The number of slaughters fell in the same order of magnitude to 131 million.

All in all, we have to wait and see how the situation in Germany will develop next week. Based on the statements, the DCA Exchange Price 2.0 drops by 1 cent to €1,70 per kilo. And the price of live pigs also drops 1 cent to €1,36 per kilo.

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