Analysis DCA Benchmark Price - Pigs
Pig market feels a lot bleaker
The wind in the pork market is clearly coming from a different direction. After a warm summer period in which prices rose sharply, autumn is now on the way. The significant reduction in the German pig price is a sign on the wall. How does the DCA Stock Price react to this?
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Last week we wrote that market sentiment was turning. A number of factors underlie this. One of them is the offer. The pig supply shows a seasonal increase again. This gives slaughterhouses, which have been confronted with shortages throughout the summer, a little breathing room. Moreover, slaughterhouses have often already adjusted the capacity to the lower animal numbers. For example, Danish Crown and Tönnies have recently announced reorganizations and are going to cut the workforce. Other parties take similar measures or are resigned to accepting the situation.
The wider supply of pigs is also increasing due to a lack of demand. The high freezing costs deprive slaughterhouses of the incentive to build up stocks. Firstly, because the freezing costs are sky-high. Another factor is that slaughterhouses fear a price drop. Pig prices have risen to record highs in recent months, but fears are that this will not hold up with the winter months approaching.
German price down
The first signs of a decline are already visible. For example, the leading German pig price (VEZG) fell this week by €0,10 to €2 per kilo. This development is also depressing pork prices. Earlier this week, the prices of hams, shoulders and other components fell. The thinking is that the downward spiral can continue. This makes it risky to stockpile meat. Meat traders also keep aloof.
In short, there is a lack of confidence, fueled by the high inflation rates. Statistics Netherlands published today (Friday, September 30) a record inflation rate in September of 17,1%. This affects purchasing power. The effect of this will emerge, according to renowned economists, as the winter months draw closer. The decline in pork is not an isolated incident. High dairy prices are also losing ground, as are high beef prices. The prices of poultry meat will remain stable for the time being.
DCA Benchmark Price - Pigs
The conclusion is that the pressure on prices has become too great. The DCA Stock Price 2.0 must therefore undergo a significant reduction. The quotation for slaughtered pigs decreases by €0,08 to €1,87 per kilo. The price of live pigs falls by €0,07 to €1,48 per kilo.
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