Analysis Pigs
Pig market finally over, what comes next?
After rain comes sunshine. It has not yet reached that point at the pig market, but the umbrella can be closed on this soaking wet day. Because after a period of significant write-downs, the quotations do not fall further. Yet the dark clouds above the market have not yet blown over.
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Pig prices in Germany have stabilized this week at €2,10 per kilo. This movement was also followed by the large slaughterhouses. In the Netherlands we saw lower slaughterhouse quotations on Wednesday. This is in response to the previous significant reductions on the German market. Now that peace has returned to Germany, the Netherlands and other European countries can follow, or so the market thinks.
Hope for actions
With the write-downs, slaughterhouses have recovered their margins somewhat. This was under pressure due to disappointing meat sales, which resulted in lower carcass parts prices. The by-products in particular are difficult to valorize. On the world market, even after price corrections and the sharp decline in the euro in recent weeks, Europe is still not competitive compared to Brazil and the United States. Slaughterhouses are therefore focusing on the European market. Tönnies, for example, indicates that they hope to boost meat sales through retail promotions. For the time being, the meat market continues to feel passive, but who knows, maybe this will change.
Not tight, not spacious
The pig supply is neither wide nor short. In the Netherlands, the slaughter figure rose last week to just under 300.000. Although there is an increasing trend, the slaughter figure in other years in this period has long been above the mentioned limit. With an average slaughter weight of 98,90 kilos, the pigs are neither heavy nor light. In that regard, supply is not necessarily the bottleneck in the market and it is therefore mainly meat sales that are failing. In Germany, the slaughter figure last week remained below 750.000 pigs, despite the cancellation of a slaughter day the week before. These are also numbers that the industry cannot vote on.
Beursprijs
Slowly but surely, December is approaching. This could give the pig market a boost, but the effect will probably not be noticeable in the coming weeks. So there are still tough weeks ahead, but with today's knowledge, pig prices should be able to withstand this. The DCA Exchange Price 2.0 therefore remains at €2,08 per kilo, the price of live pigs is also the same at €1,65 per kilo.
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