Analysis Pigs & Pork
Pig price rises despite lower meat price
The pig price has risen despite falling meat prices. Due to the tightness in the pig market, Dutch slaughterhouses felt compelled to raise their prices. German slaughterhouses did not increase, causing the price difference with our eastern neighbors to significantly decrease. Additionally, the market is moving towards lower slaughter weights.
The pig price has increased by 3 cents this week. For three weeks, the price remained at €2.15 per kilo, but this week the DCA quotation rose to €2.18 per kilo.
Currently, the pig market is not benefiting from demand. The wet and cold weather in Northern Europe is providing little impetus to the pig market. The increase is mainly the result of a game between traders and slaughterhouses. Traders are actively pushing for an increase. Among them, there is a feeling that the last chance for an increase has arrived, as we are on the eve of the school holidays. Many consumers go on vacation during this time, reducing the demand for meat.
This explains how the pig price could rise while meat prices are under pressure. Last week, neck prices decreased by 4 cents. Although shoulder prices increased by 2 cents, neck prices decreased again this week.
The pig market is not only under pressure in the Netherlands. The German market is also sluggish. The lack of demand among our eastern neighbors is evident from the fact that the German pig price has remained at €2.20 for the fifteenth consecutive week. This has reduced the price difference between the markets to just 2 cents. This is remarkable, as Germany generally maintains significantly higher prices to attract Dutch pigs.
Supply drives price up
The main reason for the increase in slaughter prices is the scarcity of slaughter supply. In the Netherlands, the number of slaughters remained far from the target of 300,000 pigs and decreased to 281,000 pigs in week 22. Subsequently, the number of slaughters dropped even further to 270,000.
In Germany, the market is also tight, although there is a slight recovery among our eastern neighbors. In week 22, 696,500 pigs were slaughtered. Two weeks later (week 24), the slaughter figure rose to 772,000. This explains the decreasing price difference in the markets. Due to the increasing pig supply, there is little impetus for higher prices, while slaughter lines in the Netherlands are starting to empty. Presumably, the increase will lead traders to choose Dutch slaughterhouses over German ones a bit earlier.
Market focuses on leaner pigs
Furthermore, the pig market is increasingly focusing on lower slaughter weights. Vion, Tönnies, and Van Rooi have adjusted their weight tables to aim for leaner pigs. In recent years, slaughter weights have significantly increased. In 2014, slaughter weights ranged between 92.58 and 95.73 kilos. In 2017, weights rose to a level between 94.80 and 97.40 kilos. By 2024, the slaughter weight increased to a maximum of 102.90 kilos, before dropping to 98.90 kilos. The higher weight resulted in fattier meat, aligning with consumer demand in the Asian market.
For a long time, this strategy was a recipe for success. In 2013, European Union member states exported around 500,000 tons of frozen pork to China, Japan, and South Korea. From 2016, exports constantly increased to over 1 million tons. Between 2019 and 2021, the market peaked due to African Swine Fever outbreaks. However, due to high pig prices, European exports to Asian countries have significantly declined. In 2023, exports dropped to the lowest level since 2015, with approximately 1 million tons of frozen pork exported to the three Asian countries.
