Analysis Pigs & Pork
Slaughterhouses lower prices in pig market
The pig prices have remained constant over the last four weeks, but there is certainly no peace. Due to low meat sales, four out of the five major Dutch slaughterhouses have decided to lower their prices. Now we wait to see if Germany will follow the Dutch example next week.
Those solely focused on the German pig price may get the impression that there is peace prevailing in the pig market. However, when looking at the market from a broader perspective, this impression quickly fades.
Slaughterhouses initiate decline
By now, four out of the five major Dutch slaughterhouses have opted for a downward move. Vion initiated a decrease of five cents, bringing their prices down to €1.91. With the exception of one slaughterhouse, all major players have followed suit. Compaxo, Westfort, and Pali Group lowered their prices by five cents, to a level of €1.82 per kilo. Only van Rooi kept prices steady at €1.87.
As Germany is an import market, the Dutch pig price generally follows the German one. However, at the moment, it is the export markets that are driving the decline. Besides the Netherlands, the other major German pig market, Denmark, has also reduced its pig price. Two weeks ago, the pig price there dropped from €1.58 to €1.53.
Low meat demand depresses price
The low demand for meat is the leading factor in the decline. Following a historically wet spring, barbecuing opportunities have been scarce. As a result, meat sales have been weak throughout the year, leading to market flooding with promotions. Additionally, major sports events like the European Football Championship and the Olympics have so far provided less boost than the pig market had hoped for. Slaughterhouses report that meat sales are extremely weak as a result.
This has clearly taken a toll on the prices of meat cuts. Over the last five weeks, pig carcass prices have decreased by at least 1 cent per week. In total, the value of a pig carcass has decreased by 8.45 cents. Almost all cuts have seen a decrease during this period, with only the liver and belly spared from a decline so far.
Low slaughter numbers do not prevent decline
Meanwhile, the slaughter numbers are at a low point. In week 29, approximately 263,700 pigs were slaughtered in the Netherlands. Only in the interrupted weeks were fewer pigs slaughtered this year. It is telling that market declines coincide with a low number of slaughters. This once again confirms that meat sales are very weak. However, the German slaughter numbers, despite a decrease, remain relatively stable. Last week, 698,000 pigs were slaughtered in our neighboring country.
