Analysis Pigs
Export struggles a hard blow for pig sector
Last week we headlined that the pig market is looking for peace and balance. Due to the outbreak of foot-and-mouth disease (FMD) in Germany, this situation is not even remotely in sight. Piglet prices are also taking a beating with a new substantial reduction in Germany, as was revealed earlier today. The DCA stock market price is also falling further. The pig supply is now oppressively large and the weights are very high.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Much has been said and written about FMD this week. The good news is that the second suspected company appears not to be infected. In the meantime, the German Ministry of Agriculture has scaled down the preventive measures in Brandenburg. According to the German authorities, there is currently no reason to believe that the virus has spread further.
Substantial expense
The pig sector is nevertheless left holding the baby due to already imposed export bans on German pork, to destinations such as South Korea and the United Kingdom. The British measure is particularly hard-hitting. Every month, Germany exports around 10.000 tonnes of pork to the UK with an average export value of around €45 million, according to Eurostat data. The export volume to South Korea amounted to an average of almost €2024 million per month in 14 (January to November). The boycotted German pork will have to be sold on the internal European market for the time being.
This creates a competitive market within the eurozone, where prices are vulnerable. This also affects Dutch slaughterhouses. It also explains why Dutch slaughterhouse prices went down this week, albeit in a milder form than in Germany. Pig prices are also under pressure in Belgium. Danish Crown in Denmark left the price untouched.
Piglet price down
Piglet prices are also at odds. Earlier today it was announced that the leading German VEZG piglet price has fallen by no less than €10 to €45 per piglet. For the first time in a long time, the listing is below the five-year average. This also affects Dutch sow farmers who trade on the German listing. In a market with complications like this, this is a risk, although Dutch piglet prices will probably also be affected by this next week.
Market developments for the coming weeks are currently difficult to estimate. In addition to the uncertainty, the very large supply of pigs is also putting pressure on the market. According to traders, the weights are so high that the slaughter lines have difficulty with this. Based on the lower slaughterhouse quotations, the DCA Beursprijs 2.0 still has to make a correction for week 4. The quotation for slaughtered pigs drops by €0,06 to €1,72 per kilo. The price of live pigs drops by €0,05 to €1,35 per kilo.
Click here for an explanation from DCA Market Intelligence on the listing.