Ground is quickly sinking beneath pig market

The pig market is still in very troubled waters. The Spanish pig market has to miss more than half of its exports to third countries due to the outbreak of swine fever. In particular, the pain is also being felt in the Netherlands. The pig market remains in very troubled waters. The market has actually been under pressure all year due to weak European demand. But since autumn, it has become clear how much more difficult the European market could get. First, China imposed a hefty trade tariff as a retaliatory measure due to the substantial European tariffs on Chinese cars. Last week, an even more severe disaster scenario emerged: namely African swine fever in Spain, by far the largest European market. This means that most exporters outside the European Union are excluding the Spanish market. A silver lining is that the Chinese market remains largely available. Initially, about a third of all export certificates were revoked. So far, two of the five major trading partners have largely withdrawn their barriers. China is by far the largest Spanish market outside the European Union and imported 40.8% of the 1.32 million tons that the southern European country sold outside the EU last year. The volume was then around 539,060 tons. This is a silver lining as Spain was saved at the last minute by a regionalization agreement. Additionally, the fifth largest importer, the United Kingdom, has also lifted the export ban. This accounts for 5% of the export, about 66,150 tons. Thus, more than half of the export to countries outside the European Union is still at risk. For example, there is no regionalization agreement for Japan (accounting for 14.5%, or 191,860 tons), the Philippines (14.1%, 186,300 tons), and South Korea (6.8%, 90,350 tons). Significant price drop The market is already strongly anticipating this, and in Spain, this meant a price decrease of over 11 cents in just a week, from €1.314 to €1.20 per kilo. This reduction is a direct consequence of ASF. Furthermore, a trader told Foodbusiness that all surcharges in Spain have also been removed from the quote, which results in an additional drop of 5 to 10 cents per kilo of slaughter weight. The Spanish market typically moves in a kind of bell curve, where the price peaks in the summer due to the influx of tourists. In winter, the price drops, only to rise again in spring. However, this year the price has clearly dropped more significantly than before. In particular, the drop this week marks a clear break from the usual pattern. Compared to 2024, the price in week 49 was 23.3% lower than in the same week the previous year. The price then stood at €1.565 per kilo. Dutch market is struggling Because the cold storage facilities are already full, Spain is forced to more or less dump the meat on the Eastern European market. In particular, the sentiment in the pig market in the Netherlands remains very negative. Market leader Vion has lowered the price by no less than 8 cents to €1.30. Westfort has reduced its price by 5 cents to €1.41. Van Rooi opted for a 6 cent reduction, bringing the price in line with Compaxo. Both are now quoting a slaughter price of €1.35, with the last slaughterhouse reducing the price by 5 cents. In Vion's explanation, it is noted that the pressure on the front quarter and the ham in the European market is a major reason for the slaughterhouse to significantly reduce prices. Additionally, the company refers to African swine fever as a major cause. Interestingly, there has been no response to this yet in Germany. The VEZG remains at a level of €1.60 per kilo. The prices of Tönnies are also at that level.