Analysis Pigs
The sky is the limit on the pig market
The European pig market is in full swing. Not only in the Netherlands and Germany, but also in many other Member States, prices are rising rapidly. Moreover, the end of the upswing is not yet in sight, although the resistance is increasing day by day.
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Although the crocuses are cautiously emerging again, spring is not yet in sight. Especially with the colder days behind us, it really is still winter outside in the Netherlands. The pig market, which is often dependent on seasonal influences, is currently not very interested in this. Prices are taking major steps upwards and the end of the 'spring rally' is not yet in sight. Especially because the Internet Exchange continues to make great strides and today rose by €0,08 to €2,39 per kilo. Another new record.
Many more records have been broken in recent weeks. This also applies to the leading German pork price (VEZG), which rose this week by €0,12 to €2,20 per kilo. The quotation therefore exceeds the existing record (dating from October 2022) by no less than €0,10.
Resistance in the chain
Meat buyers realize that pork prices are rising, but at the same time try to limit changes as much as possible. A division is also emerging on the meat market. The more speculative fresh market is growing rapidly, while parts in cold stores are increasing less quickly. In export markets outside Europe, especially in China, it is difficult to pass on higher prices. This means that these are challenging times for slaughterhouses, as stated out loud by German market leader Tönnies. On the one hand, they want to be assured of a sufficient supply of pigs ready for slaughter, while on the other hand, the margin must be monitored. This explains the varying changes in the quotations between the slaughterhouses.
The tight pig supply is now also reflected in the Dutch slaughter figure, which fell to 300.000 last week. This means that for the first time this year we are lagging behind compared to last year. Also in Germany slaughter figures are declining, as has been happening there for some time. The drying numbers confirm that pigs are being held here and there. In view of the price rally, this is not illogical.
The sky's the limit
At the moment it seems the sky's the limit at the pig market. This situation is unlikely to last for weeks, because the resistance in the chain is significant. However, the downright tight pig supply has so much power that the primary sector finally has a view of better times again. This means that a lot of grumpiness disappears, or in other words: it moves to other links in the chain. Based on the statements, the DCA Exchange Price for the slaughtered pigs increases by €0,12 to €2,12 per kilo. The price of live pigs increases by €0,10 to €1,67.
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