News Rabobank forecast
Recovery on the pig market requires patience
According to Rabobank, the Dutch pig farming sector is facing a challenging winter. With the ongoing corona pandemic, African swine fever in Germany and rising feed prices, the prospect of recovery after January is uncertain.
The bank says that the coming quarter will bring a lot of uncertainty, but that there is a prospect of a recovery in the market situation in the second quarter of 2021. In the Netherlands, slaughter does not want to go so smoothly due to the corona crisis. This results in heavy pigs because the animals stay longer on the farms. With an average weight of 99,7 kilos, the pigs are 2% heavier than last year. Rabobank expects that the weights will decrease again in the course of 2021 because the corona virus is expected to be further contained.
Germany and its export ban
At the moment, the market is still under the spell of the corona virus, which means that the Germans are dealing with a schweinestau. In addition, our eastern neighbors are also struggling with increasing ASF infections. As a result, several Asian countries, including China, no longer want to import German meat. As a result, a third of German pork exports normally traded outside the EU are now largely sold within the EU.
Germany is still in talks with China about 'regionalisation'. The country is calling for a partial lifting of the export ban in regions where no ASF has been found. With 75.000 tons per month, China is Germany's largest sales market. Opening up certain regions would be a relief for Germany and the European market. According to Rabobank, the fact that Belgium has been declared AVP-free has little effect on the market.
Cost increase
Rabobank expects feed costs to rise sharply in 2021. The bank takes into account that next year soybean meal will be on average 20% more expensive than this year. This is partly driven by the high soy demand from China now that pork production there has started an upward trend.
With the expected low prices for meat and piglets and rising feed costs associated with ASF and corona, the bank outlines that the recovery in 2021 is uncertain. The production of pork is not just slowed down. A lower number of inseminations underlies such a change, something that is gradually becoming visible. Prices can only rise when the oversupply of pigs has disappeared, which, according to the bank, will only happen after January. In addition, the developments surrounding AVP in Germany continue to determine the mood that will prevail in the spring of 2021.
Jorine Cosse
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