Dutch pig market is very sharp

Although the Internet stock market continued to rise in recent weeks, bringing matters to a head, the increase in the German pork price (VEZG) still came as a surprise. The existing record was broken by a plus of €0,05, which now raises the price to €2,10 per kilo. In itself a high level, but in relation to the costs, pig farmers are very concerned about making a high turnover.

Create a mood
Tönnies, Westfleisch, Danish Crown and Vion have also joined the movement in the German pork price. Due to the tight pig supply in Germany, they are now unable to slow down the market. You can sense that the increases must come from the toes. There is a lot of mood building going on. Although meat prices are rising, slaughterhouses are also confronted with significant cost increases. As in many sectors, energy prices are an almost impassable hurdle.

The gas bill of an average slaughterhouse is not too bad, but the electricity consumption is high. This is mainly due to the freezing costs. The volatility on the energy market therefore causes a lot of headaches for slaughterhouse management. Putting pressure on the pig price is not an option, because the market is not ready for that. As a result, slaughterhouses are now offering energy surcharges. The Dutch slaughterhouse Westfort took the lead this week. It is expected that other slaughterhouses will follow this movement.

More expensive pork
There is a danger in this, because ultimately the cost price increases will be borne by consumers. A drop in demand in meat sales is therefore likely. All the more so because purchasing power in the Netherlands is already under considerable pressure. On the other hand, pork is a cheaper alternative to the more expensive beef. These uncertainties obviously cause a lot of tension in the chain. In the event of a possible drop in demand, freezing costs will increase even further. The weak euro is a windfall for distant exports, but this currently only supports the valorization of by-products. 

Dutch market on edge
The increase in Germany has put the Dutch pig market on edge. After all, the price difference had already increased in recent weeks and that difference is now only increasing. Dutch slaughterhouses will therefore have their turn next week. Otherwise, the thinking goes, more pigs will cross the border. The slaughter figure in the Netherlands has fallen below the 300.000 mark in recent weeks, so the supply here is not very extensive.

In short: the Dutch market is also ripe for a further increase. Based on traders' statements, the DCA Exchange Price 2.0 for slaughtered pigs increases by €0,03 to €1,96 per kilo. The price of live pigs also increases by €0,03 to €1,56 per kilo. 

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