Italian pig market does not decline nearly as hard

While the pork price in the European Union has fallen sharply on average, the price in Italy remained at a relatively high level until recently. However, there is now mainly a slowdown in the local livestock markets, although it remains to be seen whether prices will fall there as strongly as in Northern Europe. Across Europe, pork prices are under significant pressure. This also applies to Italy, although the decline there is less severe than in other markets. Since the market peak this summer, the average carcass yields have only decreased by 2.8%, according to data from Eurostat. The average price in the European Union has dropped by no less than 18.8% since that same peak. The comparison with Spain is particularly interesting, as that country, like Italy, has a large market for heavy pigs. In Spain, the pork price even decreased by more than the European average: 19.4%. Popularity of Italian cured meats The main reason for the higher Italian prices is the strong sales of Italian cured meats. The structural increase in demand for such products (especially hams) ensures that the demand for pigs remains strong for a longer time, while the drop in demand in the rest of Europe becomes noticeable later. As a result of the persistently strong demand for Italian cured meats, the price of heavy pigs, which are intended for the production of hams among other things, continued to rise. Until mid-October, there was still a clear increase. According to the most recent data, the price in this segment was 2.5% higher in September than a year earlier, at a level of €2.18 per kilo. Prices have still decreased Despite the slowdown, the demand for pigs has now significantly decreased. Italian slaughterhouses benefit from the sharp price drop in the European markets, which occurred after major competing countries such as the Netherlands, Denmark, and Spain lost their access to the Chinese market. Italy is significantly less affected, as exports are mainly focused on Europe, the United States, and (increasingly) South and Central America. This directly explains the large difference with developments in the Spanish market. However, the lower prices in the European market are now also being felt in Italy, causing prices in this segment to also be under pressure. According to data from the leading Italian Center for Economic Research on Sustainable Chains (Crefis), the price has now fallen to €1.89 per kilo. Average pig price clearly drops Looking at the situation in the livestock markets, we see that the decline in Italy has indeed begun. The price of live pigs has dropped by about 9% since week 40. Although this decline is significant, it was only half as strong as the European average. Until week 42, the last period for which the European Union has published figures, the pig price fell slightly more than the pork price, by about 3%. In the European figures, it is not yet visible whether this has put additional pressure on the meat price, as the most recent data does not go further back. Thus, pig prices are decreasing approximately as strongly as meat prices. Unlike in Northern Europe, however, margin recovery for Italian slaughterhouses is therefore very limited.