Pig price yields to headwinds on meat market

Although many traders wouldn't have bet their lives on it, at the start of the week it was thought that pig prices might hold their ground. However, the German pig price (VEZG) is proving unable to withstand the mounting pressure from the meat market and is falling by as much as €0,10 to €1,60 per kilo.

Although Dutch slaughterhouses are not fully booked, they are following the downward trend. Vion and Van Rooi are also lowering prices by €0,10 to €1,31 and €1,33 per kilo, respectively. Westfort is taking a slightly more restrained approach with a drop of €0,08, going to €1,39.

Meat market is moving sluggishly
The reduction does not come entirely out of the blue. Last week and also this week, the DCA parts prices already seeing downward movements, with declines for hams, among others. This is a heavyweight within the carcass and therefore decisive for the price. However, the drop in the pig price is not in line with the movement of the meat market. After all, apart from hams and cutlets, most parts moved unchanged.  

However, slaughterhouses indicate that meat sales are sluggish and that large volumes need to be frozen. Due to high energy prices, this is an expensive undertaking and also fuels price pressure. Space in cold storage facilities is scarce due to high stocks of fries and butter. 

Loss of slaughter days
Combine this with a series of lost slaughter days (in the past and coming weeks) and the ingredients for a price reduction are complete. This does not alter the fact that the reduction is difficult for the primary sector to swallow. Due to the cut in pig prices, the pressure on piglet prices will likely become even greater in the coming weeks than it already was.