The high lump prices for both cattle and pigs have started the decline. Strong corrections in the commodities markets offer room for this, although the tension has not yet faded into the background.
Figures from Wageningen Economic Research show that chunks became considerably cheaper in August. The price of pork chunks fell by €1 to €40,80 per 100 kilos. This is the second decline in a row, after a series of significant price increases in the previous months. Sow feed and piglet feed also became cheaper. The price of cattle feed also fell, but less sharply. The price of A-brok, for example, fell by €0,35 to €38,65 per 100 kilos.
Downward trend in wheat
The decline is related to the sharp correction in the wheat price in recent months, to which chunk prices respond with a delay. There has been a downward trend since May. At its low point, the August contract on the Matif in Paris was trading at €313 per tonne. This meant that the price increase related to the war in Ukraine had disappeared. The September contract is now trading at around €325 per tonne. Buyers of physical products still have to dig a little deeper into their pockets, as the quotations in Rotterdam show.
The futures contracts for the coming months are all trading lower, but are still above the psychological limit of €300 per tonne. The fall in wheat prices, in addition to the increased grain exports from Ukraine, is related to fears of a recession due to high inflation. The idea is that this may dampen the demand for wheat. Barley prices are falling along with wheat. Grain corn prices fell less rapidly due to disappointing harvests, both in Europe and the US. This is related to the extreme drought. Grain corn is currently almost as expensive as wheat. This is historically unusual.
Soybean prices are also under pressure. The main cause of this is the impending record harvest in Brazil. There are some concerns about the harvest in the US due to the drought in the Midwest. Since mid-June, the price on the CBoT in Chicago has fallen by almost $100 to $540 per tonne. The movements are erratic, which means that the markets are nervous.
Brok price could fall even further
Based on current raw material prices, further price reductions in compound feed are possible. The compound feed price indicator provides for meat pig chunk a price drop of approximately 4,5% in the coming months. The cattle feed can even drop by 8,5%, the calculation tool shows.