Analysis DCA Scholarship Award
Poker farmer holds 'crypto pigs'
The pig market has gone completely unhinged. Rarely have prices gone up as quickly as they do now. The rate of rise is almost inimitable. The swine market is starting to gain traction from the crypto market and farmers are making good use of it.
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It is old-fashioned exciting now that the market has changed course 180 degrees in a short time. The German VEZG quotation posted a historic increase on Wednesday from €0,18 to €1,50 per kilo, which is almost back to the long-term average. Slaughterhouses such as Tönnies and Vion followed meekly with their pricing. This has changed in recent months. The difference with then is that the supply in Germany is now extremely tight.
Dutch slaughterhouses are also increasing their quotations very quickly. And to top it all off, the Internet Exchange rose another 4 cents today (Friday, March 14) to €1,74. In recent weeks, the mood-determining indicator has already increased by approximately €0,50.
'Crypto pigs'
The rate at which pork prices are currently rising appears to be outpacing even cryptocurrencies. Farmers who do not participate in concepts hold on to the supply almost frantically. And that makes perfect sense after a period of meager returns. If delivered a week later, a pig in this market can easily fetch tens of euros more. And when you multiply that by the delivery numbers, you arrive at large amounts. In view of the also out-of-control grain market – and with the prospect of rising bulk prices – this is a welcome development for the primary sector.
The lower delivery numbers are reflected in the slaughter figures. In Germany, the slaughter figure dropped to just over 800.000. This leaves one fifth of the slaughter capacity unused. In the Netherlands, 309.000 pigs were hanging on the hooks, about 10.000 fewer than the previous week.
Large spread between assignments
It is difficult to say whether the war between Russia and Ukraine in the background is contributing to the price increases. Meat trade flows are not directly affected, but purchasing parties may still want to play it safe in these uncertain times. The nice weather may also play a role. In pigs, the imbalance between supply and demand is greater than on the meat market. Although meat prices are rising rapidly, this is happening relatively less quickly.
The unhinged mood is causing quite a stir in the sector. The entries submitted for the DCA Scholarship Prize 2.0 at DCA go in all directions. From plus €0,11 to even plus €0,25. The price of slaughtered pigs will increase by €0,18 to €1,49 per kilo for next week. The price of live pigs increases by €0,15 to €1,15.
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