Analysis Pigs
Meat trade has to get used to high pig prices
An exciting period on the pig market has come to an end. After wild weeks, in which prices rose sharply, the market is now slowing down. However, the supply remains as tight as ever, so that the ceiling does not seem to have been reached yet. On the other hand, the tension in the market is clearly noticeable, meat buyers in particular have to get used to the higher prices.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Even earlier than expected, the German pig price has leveled off this week at €2,28 per kilo. Based on the opportunistic Internet stock exchange, insiders sometimes expected a larger price rebound, but that party is canceled. Yet there is a feeling of satisfaction in the primary sector, now that the market is 'finally' on their side.
Planting for slaughterhouses
With a stable German price, slaughterhouses are not overburdened, although they say they have to make considerable efforts to pass on the higher pig prices to the meat market. Looking at the meat mutations of DCA, this is not immediately apparent. It should be noted that this concerns spot trading. The longer-term supply contracts are often concluded at lower price levels. It is therefore plausible that slaughterhouses are experiencing loss of margin.
The meat processing industry is currently very reluctant to build up stocks, now that parts prices have risen so high. Buyers clearly still have to get used to the higher prices, which means that the meat trade is mainly limited to the short term. The fear is that pork will face a drop in demand if store prices continue to rise. The recent price rally means that additional price increases are on the way.
Supply continues to be tight
On the other hand, supply is persistently tight. For two weeks in a row, the slaughter figure in the Netherlands has been well below the 300.000 pig mark. This confirms the tight supply on paper. The weights do increase a bit, up to just over 100 kilos. Pigs are therefore being held here and there, which is not surprising given the rapid price recovery. This incentive is decreasing now that pig prices are leveling off. In Germany, the slaughter figure has only just been able to hold above the 700.000 pig mark in recent weeks. Historically, these are extremely low numbers, which previously did not even occur in broken weeks.
However, due to shrinking animal numbers, low slaughter figures are a new reality. This lays a solid foundation for pig prices, with further price increases likely later this spring. Based on the statements, the DCA Exchange Price for the slaughtered pigs remains at €2,19 per kilo. The price of live pigs is also unchanged at €1,73 per kilo.
Click here for an explanation of the listing.