How the pig market is turning just like the weather

The turn in the pig market is somewhat like the current weather pattern in Nortwest-Europe. After a long period of drought, it suddenly started raining again and moreover more than was expected. A rebound in pig prices was also not on the horizon, but under pressure from a tight supply the market is becoming fluid again. The German pig price has risen by 20 cents over the past weeks to €1.60 per kilo, which has taken the first steps out of the price trough. The rebound comes quite unexpectedly, because during the summer holiday period the market usually remains stable. In the Netherlands, the price rebound on paper has remained limited to 18 cents. That Dutch slaughterhouses are putting the pedal to the metal a little less hard is not always well understood by the primary sector. Sometimes the difference is made up by increasing the weekly surcharge. Be that as it may, the market is picking up again at a moment when nobody expected it. The low piglet prices are rising in the wake of the fattening pig prices.Tight supply stimulatesThe cause of the price rebound is mainly the tight pig supply. In the Netherlands this has been the case for some time, but now the German market is also marked by scarcity. Since July, the number of pig slaughters has been under pressure, with last week as the provisional low point; then fewer than 700,000 pigs were hanging on the hooks. That is too few to consider the utilization rate acceptable. There are also (far) too few pigs in the Netherlands to fill the available slaughter hooks. Slaughterhouses are trying to obtain extra supply through trade, but that is not always easy. With a few extra trucks they often still are not there. Extreme heatThe tight supply in Northwestern Europe cannot be seen separately from the extreme heat periods this summer, which are causing growth delays. This is exposing the seasonal shortage at an accelerated pace. Not only in our part of Europe, but also in Eastern Europe the supply is tight. In the background, the tragic bankruptcies of sow farmers in Germany and also the Netherlands may have contributed to the accelerated turnaround. A new wave of bankruptcies in the primary sector is the last thing slaughterhouses and the meat processing industry in Northwestern Europe are waiting for. In that case, overcapacity would become available more quickly and a restructuring of slaughter hooks would be unavoidable. The bankruptcies in any case underline how critical the situation had become by now. Temporary in nature That turnaround is now underway, although one swallow does not make a summer. Seasonally, supply is at its lowest at this time of year and this is now being reinforced by the series of heat waves. Meanwhile, temperatures are a lot milder again and within a few weeks pig supply will seasonally start rising again. All in all, there are still too many pigs in Europe to get the market properly going. Supply will also start normalizing again in Germany. In the most recent count of the pig herd, the contraction was moderate after all. In the Netherlands, the shortage will persist, but it has already been shown that this is not enough to make prices rise here. Third increase in a row? This week it is hanging in the balance whether the German pig price will rise for the third time in a row, or not. The chance of a further increase is quite real, but not yet a foregone conclusion. For pig farming it would in any case be a welcome increase in the run-up to the autumn and winter months. Further price increases are therefore needed to get the financial picture in the primary sector back in order. Just like the rain that is falling now, the precipitation deficit has by no means been resolved.