Analysis Pigs
Succumb pig price sensitive tap for sector
After weeks of difficultly unchanged prices, the German pig quotation will fall hard through the ice on Wednesday afternoon (May 4). The built-up pressure on prices could no longer be ignored by the German producer organizations, resulting in a strong and sensitive blow to the quotation and the sector.
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For weeks, German pig slaughterers have been grumbling that purchasing quotations are too high. German pork prices rose much more in March than those in neighboring countries, which German slaughterers say put additional pressure on margins. Because all parties in the chain seem to realize that the situation in the primary sector is precarious, attempts were made for a long time to maintain peace. However, this was no longer possible in today's prize round.
Slaughterhouses are increasing pressure
German slaughterhouses reached into the toolbox several times last week with resources to further increase pressure on the live pig market. Slaughter plans were adjusted downwards left and right, while Dutch traders reported that 'cheap' pigs were purchased from both the Netherlands and Belgium at the same time. This has increased the pressure on the German market. Relatively few pigs were slaughtered last week for the first full week after Easter. The number of slaughtered animals amounted to 786.000 heads, the average weight remained unchanged at 98,0 kilos. Considerably higher than a few weeks ago.
The supply is also more than sufficient in the Netherlands. Although it is also reported that by delivering extra freight to Germany and Poland, the pressure has been kept somewhat within limits. Dutch slaughterhouses are not waiting for extra pigs, 'rather one load less than one extra' is the credo, which also makes the supply here feel substantial.
Meat trade difficult
In addition, the meat trade continues to develop with difficulty. While it has been heard time and time again that the significant increases in March could hardly be passed on, there was renewed pressure on pork parts prices last week - after a stabilization last week. The DCA changes in pork parts show that ribs, necks, shoulders and lean meats in particular were sold cheaper. The carcass lost approximately €0,03 per kilo in value.
The German VEZG quotation this week amounts to €1,80 per kilo of slaughtered weight, a decrease of no less than €0,15 per kilo. Bearing in mind the sky-high feed and energy prices, the decline is an extremely sensitive blow for the pig sector. Especially because the period up to Pentecost traditionally shows itself to be relatively favorable for price developments.