Inside Pigs
Low slaughter rate hinders pig sales
The sale of fattening pigs is downright difficult. The supply is increasing because slaughterhouses in Europe are not in a hurry with slaughter now that meat sales are slow. What does this mean for the change in the DCA Stock Price 2.0 for next week?
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Meat consumption is always lower in January and that is especially the case this year. Due to the lockdowns, meat sales are disappointing and there is little prospect of improvement in the short term. Because the stocks in (especially German) cold stores is already high, slaughterhouses are taking it easier in terms of slaughter programs. The fact that Germany cannot supply to third countries outside Europe obviously does not help the situation.
Lagging German slaughter figures
In Germany, slaughter figures are lagging behind compared to other years. There were 2 pigs on the hooks in week 740.537, which is quite a small number for a full slaughter week. In addition to disappointing meat sales, slaughter figures are stagnating due to the corona measures that slaughterhouses have to take. With an oversupply estimated at between 750.000 and 1 million pigs, this situation is far from desirable.
Traders who spend a lot of time on the German market are noticing the consequences. Getting the pigs placed is a difficult puzzle for them to solve. The situation is better in the Netherlands, especially because Dutch slaughterhouses can export to Asia.
In the past week, 322.791 pigs were slaughtered here, which in itself is not a low number for this time of year. With over 102 kilos of slaughter weight, the pigs are quite heavy. The fact that the law of communicating vessels applies to the pig market has been underlined once again in these weeks. The consequences of the oversupply in Germany are also noticeable in our country.
Prices remain in place
In terms of price changes, we see a calm picture at relatively low levels. The German VEZG quotation remained unchanged again this week at €1,19 per kilo. The Dutch and German slaughterhouse quotations also remained in place. As long as the ample pig supply continues, the prospect of a price increase seems limited.
DCA-Markets hardly opts for an increase from the Dutch trade. On the other hand, a reduction is also not an option. The DCA Exchange Price 2.0 therefore remains at €1,21 per kilo. The price of live pigs is unchanged at €0,91.