Vion skips German price from guarantee system

Vion has removed the German pig price (VEZG) from the price index guarantee system (PIG). The slaughterhouse is forced to do this because the pricing on the German pig market has taken on a life of its own and does not correspond with other countries. Participating suppliers were informed about this by letter this afternoon (Tuesday 20 September).

The payment system is part of the Good Farming Balance chain concept. The payout prices for pig farmers are based on a number of international quotations from Germany, Denmark, Spain and Belgium. The system offers pig farmers the guarantee that Vion will pay an internationally competitive price. At this point, however, the shoe pinches.

German price increased quickly
The German pig price has increased in recent weeks increased much faster than elsewhere in Europe. This is because the pig supply in Germany is very tight and slaughterhouses there go to great lengths in their pricing to get pigs on the hook. Based on the weekly slaughter figures, it can be concluded that a quarter of the slaughter hooks remain unused. Vion speaks of a highly disrupted market situation that is currently hurting the slaughterhouse economically. As a result, the meat company is now intervening by removing the German pig price from the basket of quotations.

According to Vion, this does not fall under the guise of changing the rules during the game. The slaughterhouse refers to the rules of the game to which Vion reserves the right to do so. This does not alter the fact that it is not a nice message for participating pig farmers. The suspension of the German listing will start from next week. The share of the German pig price in the basket (21%) is divided among the other countries.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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