A silver lining for the pork market

The pig market is still relatively flat. This applies to both meat and slaughter prices. However, there is a silver lining, as for the first time since December, the average carcass price rose slightly. The pig market remains largely stable, but the underlying sentiment is improving slightly . The average slaughter price has increased for the first time since December. However, the increase is still minimal. In total, the price of the carcass rose by 0.45 cents per kilo. This is due to a rise in neck prices by 6 cents. Although the price of pig flanks decreased, this caused relatively less pressure, given that flanks have only a limited share in the valuation of the pig. The stable phase in the meat pig market is also not over yet. The Northern European pig prices remain the same across all major slaughterhouses. The situation is similar in Southern Europe. Prices in Spain also remain roughly the same. Insiders in the market, including within the slaughterhouses, acknowledge that the current price level in the pig market is not sustainable in the long term. Pig farmers are operating at a loss with the current slaughter prices. This could indicate that there is a willingness to raise slaughter prices a bit if the market tightens. However, particularly in the Netherlands, where prices are clearly lower than in surrounding countries, there is no guarantee that this will indeed happen. The contraction in the Netherlands is noticeable at any moment The Dutch pig market has tightened considerably with the Lbv+ scheme. A significant number of pig farmers have ceased operations, which means the market will miss this supply. This will likely become apparent once the pig backlog from last Christmas is cleared. According to insiders in the market, we are almost there. In weeks 2 and 3, which RVO has already indicated, that backlog was still clearly visible. At 285,000 to 290,000 pigs, slaughter numbers are well above the level we can expect soon. If all goes well, the average slaughter figure will come out just above 250,000 pigs per week. Still, the slaughter numbers are not very high. In previous years, a large number of slaughters was generally only spoken of when the slaughter figure was above 300,000 pigs. Last year, the slaughter figure in week 2 was also 1.8% below the level of the previous year and in week 3, 1.1% fewer were slaughtered. The fact that the supply is interpreted as ample is largely a matter of weak demand. It will likely soon become clear that it is becoming more difficult for slaughterhouses to fully utilize slaughter capacity. The question is how the sector will respond. If the competition for pigs remains significant for a long time, slaughter prices may go up a few steps. If slaughterhouses quickly reduce their capacity, the incentive for doing so is less strong. However, that this will happen quickly is not certain, as this is a zero-sum game. If competitors scale back sufficiently, it is possible to keep one's own capacity larger, allowing the overhead to be spread over more slaughter hooks. This makes it not very attractive to be the first to act. We will probably have to wait and see who blinks first.