Slaughterhouses repair margins in price drop

The weeks in which the pig price loses 15 cents in one go are historically rare. This week the market had to absorb such a blow. Although the decline was foreseeable from a distance, the correction nonetheless hits hard in the sector. The hope is that the pain has now been endured, as slaughterhouses have their margins in better shape. In the late summer of 2020, the German price dropped by 20 cents when lockdowns came back into view. Although it was not as extreme this week, a drop of 15 cents is still significant and the second-largest correction in twenty years. Earlier this year, the price also dropped by 15 cents when foot-and-mouth disease (FMD) was detected in Germany. Rough corrections So far this year, the German pig price has decreased five times, each time by a correction of 10 cents or more. In other words: when the German market declines, there is hardly any brake on it. The Dutch market has fewer significant fluctuations, but the current price reduction is comparable in net terms. The rare premium that was paid for Dutch pigs this spring compared to Germany has now completely disappeared. It is notable that Dutch slaughterhouses are slaughtering similar numbers as last year, despite many closures. The average slaughter weight is also close to that of 2024. Part of the relatively large supply is explained by a temporarily looser supply of slaughter sows. Slaughterhouses can manage well with the current supply, without it being a case of oversupply. However, the willingness to slaughter remains limited due to the persistently difficult meat sales market. Margin recoveryAfter a difficult summer period, the margins of slaughterhouses have recovered well since September. Dutch slaughterhouse quotations fell unanimously during that period by 30 cents, while the raw material value of the carcass fell by approximately 17 cents per kilo according to the weekly changes in DCA pig parts. It should be noted that pig prices rose faster this spring than the raw material value. The expectation is that after these significant corrections, the market will stabilize more. Historically, the lead-up to Christmas sales in terms of movements in meat prices is relatively stable. Based on developments this week, the DCA Market Price 2.0 still has a correction to implement. The quotation for slaughtered pigs falls by €0.10 to €1.62 per kilo, and the price of live pigs falls by €0.08 to €1.25 per kilo.