News Pigs
Meat pig farmer now also feels the pain in crisis
Where until now most pain in the pig sector was felt by the breeding farms, the balance on fattening pig farms has now also fallen to a deplorable level. Meanwhile, the margins of sow farms also remain well below the long-term averages.
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After a low point in November last year (12 points), with slightly increased piglet prices, the DCA-Piglets index rose somewhat to a position of around 30 points at the beginning of February. Although the index has shown an increase, the current level is still historically low for this time of year. The situation is not much better in fattening pig farming.
For a long time, low piglet prices supported the balance of fattening pig farmers. After the recent price increases for piglets, feed and the slight decrease in selling prices for fattening pigs, the balance is slowly creeping to record low levels. The current position of 30 points is still slightly above the historical low of the index at 19 points, which was reached for a short time at the beginning of 2016.
Historically low selling prices
The main cause of the low yield barometer readings remains the low selling prices. The continuing malaise on the pig and pork markets is putting pressure on the balances. The DCA Stock Exchange Price 2.0 had to lose a cent in January after considerable pressure was put on the quotations from the slaughterhouses. The DCA Exchange Price 2.0 is therefore at the low level of €1,18 per kilo carcass weight, excluding VAT. Although the market is often difficult in January, the current quotation is historically low.
The significant pressure on the fattening pig market has also brought the increase in piglet prices to a halt. Fattening pig farmers lack real prospects, and higher prices for piglets are not accepted. The DCA-BestPigletPrice was able to take two more small steps upwards in the first two weeks of January: the quotation rose from €26 to €28, excluding VAT. The lowest quotation in week five since the creation of the DCA-BestPigletPrice in 2015.
High food costs
In addition to the pain of low yields, there are the continuously rising costs. Compound feed continues to become more expensive every month, which further exacerbates the situation among pig farmers. All types of pig feeds were €1,00 to €1,10 per 100 kilos more expensive in January than in December. There is not much prospect of lower prices, and therefore more relaxed margins, in this regard.
In addition to these factors included in the index, rising costs for other items such as energy also play a role in the negative sentiment in the sector. In order to create a cost-covering perspective for both breeders and fattening pig farmers, prices for fattening pigs will have to increase by at least €0,40 to €0,50 per kilo. With the current stable listings and only a limited prospect of improvement, the sector still has a very difficult period ahead.