Attempts to reduce prices on the pig market failed – Meat & Protein Analysis

Shutterstock

Analysis Meat & Protein

Today 2:00 PM – Matthijs Bremer

The pork price is still stable. That does not mean that the market has been quiet in recent weeks. Slaughterhouses tried to lower prices two weeks ago, but the attempt was unsuccessful due to weak supply.

Read Foodbusiness for free for 14 days

Get acquainted for 14 days for free and without obligation
with our market information

Do you have a tip, suggestion or comment regarding this article? Let us know

The pig price remains the same for the ninth week in a row. The DCA stock exchange price shows that the price of pigs is still €2.12 per kilo.

The fact that the price of pork is so stable does not mean that little has happened. The demand for meat is on the low side. The lack of barbecue weather in particular means that consumer demand is barely increasing. This put light pressure on most technical parts. For example, the price of hams fell by 6 cents that week. Meanwhile, the price of ribs fell by 3 cents, became cheaper by 1 cent, and the price of shoulders fell by 5 cents. The price of meager matins fell by 2 cents.

As a result of weak demand, several slaughterhouses made an unexpected attempt two weeks ago to significantly reduce pork prices. With the exception of Van Rooi, all major Dutch slaughterhouses reduced prices by 3 cents. However, this did not lead to a lower stock market price. This is an indication that the slaughterhouses have not been able to keep real prices down. In addition to the DCA stock exchange price, the prices of the slaughterhouses also remained largely the same. There appears to be one exception to this. Compaxo has corrected the price upwards by 2 cents. This means that the slaughterhouse’s price is again in line with that of competitors.

Supply and demand decrease
What keeps the market in balance is that the pig supply in the Netherlands is under pressure. In week 15, 290,000 pigs were slaughtered. Two weeks later, the slaughter figure fell to 283,000 pigs. This is the lowest point this year in a full production week.

The slaughter figure is expected to drop somewhat in the coming weeks, but this is mainly due to lower processing capacity. There are still a few holidays around the corner. The slaughterhouses will be closed on Thursday, May 9, in connection with Ascension Day and the slaughter pace is also expected to be lower the day after, as many employees are taking vacation. In addition, Whit Monday falls on Monday, May 19. The slaughter lines are also closed that day, causing the demand for pigs to drop sharply.

An opposite picture is visible on the German market. The slaughter figure lagged behind around Easter. In week 16, 618,000 pigs were slaughtered. Two weeks later the slaughter figure rose again to 730,000 pigs. This is quite remarkable considering May 1st was that week. In Germany this is a mandatory day off, which means slaughterhouses are closed. This is a sign that demand at German slaughterhouses is not bad. This also makes it unattractive for Dutch slaughterhouses to further reduce prices. This could promote additional exports to our eastern neighbors, leaving the slaughter hooks empty.