Analysis DCA Benchmark Price - Pigs
Dutch pig price counters German pressure
The pig market has been shaken up quite a bit this week. While pig prices were expected to be stable through the summer months, the large slaughterhouses in Germany suddenly announced a significant reduction. Many people in the sector do not have a good word for it, but the Dutch market is not affected by it.
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We can conclude that Vion continues to try to disrupt the pig market in Germany. Despite the fact that the primary sector is suffering significant losses, the German branch of the slaughterhouse announced on Wednesday a reduction from €0,10 to €1,75 per kilo. This was done by one house prices deviated from the VEZG quotation, which remained the same at €1,85.
Vion did too in mid-May a reduction attempt. That failed when it turned out that the other slaughterhouses were not participating. This time the situation is different, because Tönnies is participating in the game. In the weekly explanation, the meat company hides behind weak domestic meat sales, a result of the holiday period in many parts of Germany.
Access to the Chinese sales market or not
Pig farmers view the situation in Germany with dismay. The power to compete against the slaughterhouses is lacking. The hope is therefore that the pressure will not spread to the Netherlands. In contrast to Vion Germany and Tönnies, Dutch slaughterers (except Van Rooi) can export to China. This saves a sip on a drink in terms of valorization of the carcass. There is also no price pressure in other European countries. Due to the influx of tourists, the Spanish pork price is even showing an upward trend.
However, meat sales in Northwestern Europe are currently described as weak. Due to the threat of African swine fever, there is a lot of sales pressure at slaughterhouses. The pig supply is also oppressively large. During the holiday season, staff shortages in the meat sector are even more acute. This may be why the slaughter figure in the Netherlands dropped below the 300.000 mark last week. According to the trade, many pigs are being given up to avoid a possible reduction. A signal that confidence in the market is low.
Stable DCA Scholarship Price
Although the Dutch market also shows weak signals, the DCA Exchange Price 2.0 for slaughtered pigs remains the same at €1,74 per kilo. The price of live pigs is also unchanged at €1,37 per kilo. This is a signal that pig traders are confident that Dutch slaughterhouses will not participate in the German discount promotions.
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