Danger not averted in a recovering pig market

The pig market took a big hit last year from the corona crisis. Sales opportunities fell sharply and several slaughterhouses struggled with limited slaughter capacity due to corona infections among employees. When African swine fever (ASF) also emerged in Germany, the pig market fell into a trough.

German international pork exports were hampered by many countries suspending imports due to fears of the introduction of ASF. This resulted in a significant oversupply of pigs in Europe. As a result, prices were significantly reduced.

Recovering market
There are now bright spots on the market again. The piglet market has been recovering since the beginning of this year and the pig market has also taken steps upwards again. Prices have skyrocketed. The DCA BestPigletPrice is now at its highest level for almost a year and the same applies to the DCA Stock Exchange Price 2.0.

Important factors for the recovery of prices are the improved market conditions in Germany, in combination with a smaller supply of piglets due to sow farmers retiring. The oversupply of pigs has been rapidly reduced and the current supply cannot fully meet demand everywhere.

In addition, countries have also agreed to the regionalization principle, whereby pork can be exported from ASF-free areas. The main pork buyer, China, has not yet agreed to such an agreement, but discussions are still ongoing to reach an agreement.

Dangers lurking
Despite better market conditions and rising prices, the threat is not over and dangers still lurk. For example, ASF is still prevalent in Germany and infections among wild boars continue to rise. The pig herd is still free of the deadly virus, but if the virus also strikes there, the market will take a major hit again.

In addition, the corona crisis is still not over and there are several slaughterhouses in Germany that are experiencing occupancy problems. Due to advanced testing, the situation does not seem to be as out of control as last year, but slaughter capacity could still drop significantly if the coronavirus continues to spread among employees.

In view of rising prices, pig farmers may hold the fattening pigs a little longer in order to benefit from higher prices, but this is not entirely without risk. If the situation regarding corona infections among slaughterhouse staff worsens again, it is quite possible that the pig supply will increase again and prices will also fall again.