Analysis Pigs
Danish Crown is trading higher than Vion for the first time in years
The sharp drop in pig prices in recent weeks has significantly shaken the Northern European pig market. The relatively sharp decline in the Dutch market has significantly altered the price dynamics. Notably, the Vion price has fallen below the Danish Crown price for the first time in five years.
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Until the outbreak of the war in Ukraine, the Danish, German, and Dutch markets were roughly in line. Occasionally, a temporary gap arose between the players, but over time, the balance shifted and the balance was restored. However, since the outbreak of the war in Ukraine, this pattern has structurally changed. Denmark lagged significantly behind the Dutch and German markets. Partly due to the high labor costs in the sector and the weak export position of the market-defining player, Danish Crown, the pig price in Denmark lagged significantly behind the rest of Northwestern Europe.
Germany generally led the way as an import market. Due to market tightness, the Netherlands managed to achieve a slightly higher export price in 2023, but since 2024, a gap has opened between Dutch and German prices, favoring German pig farmers. This was due to new market programs in which German slaughterhouses pay higher prices for finishers and piglets of German origin, leading to a slight decline in exports. A constant factor remained that Denmark was unable to keep up with the price level, and Danish prices were consistently much lower.
Changing changes
Recently, however, the situation has shifted. Germany remains the market with the highest prices, but the difference with the Netherlands has become much greater. Around week 24, for example, the price difference between Vion and Tönnies was 2,9%. By week 42, that price difference had widened to 11,8%. Perhaps even more striking is that Vion's price is now below Danish Crown's. In week 42, Danish Crown paid €1,53 per kilo, compared to €1,50 at Vion.
This is remarkable, as Danish Crown has consistently maintained the lowest payout level among the larger Northern European players since the summer of 2021. The difference has been particularly significant since the outbreak of the war in Ukraine. When pig prices in Germany and the Netherlands were at their peak, the difference widened to 28,3%.
The shifting ratios are the result of ample European supply. Although meat sales have been weak in recent years, a sharp decline in the pork supply at the time balanced the market. This year, however, there has been a recovery, putting significant pressure on Dutch prices since the summer. Consequently, Dutch and Danish prices have been virtually identical since week 27.