Piglet market profits from the pig price

previous year's level is exceeded

Due to the exceptional heat wave in the summer of 2003, the supply of piglets in the first few months of 2004 was somewhat lower than in the previous year. With rising slaughter pig prices, piglets were also quoted higher from week to week. From the beginning of the year to the end of March, the average price for a 25-kilogram piglet in Germany rose by EUR 13,50, reaching the EUR 50 mark. The price weakness on the slaughter pig market and the seasonally larger supply caused piglets to drop again, which is not unusual in the second and third quarters of a year. In the last ten years, piglet prices fell by an average of 17 euros in the period from March to September.

However, a strong price increase has been observed on the EU slaughter pig market for several weeks now. This is not entirely unexpected, as industry experts have long pointed out that the summer heat of 2003 will lead to a reduced supply of pigs for slaughter in the second quarter of 2004. In fact, the supply of slaughter pigs is currently limited across Europe. At the same time, demand has been showing the long-awaited impulses for a few weeks, as the start of the barbecue season could begin with the warmer weather. With little supply and more lively demand, the way was clear for rising prices.

In many countries, slaughter pig prices have risen by more than 20 cents per kilogram over the past four weeks. Even if this increase will not continue in the coming weeks - there are no signs of a major price collapse due to the continued shortage of supplies for the living market.

surprise in June

The current bull market on the pig market seems to mitigate the usual price weakness on the piglet market in early summer this year, if not completely cancel it out. In the past three weeks, the piglet price in Germany has increased by around one euro per week and was around 24 euros per piglet in the 42th calendar week. Compared to the previous year, the fatteners currently have to invest around five euros more for the piglets. In view of the low margins in pig fattening and the higher feed costs, this is certainly not easy, and one cannot speak of brisk demand for piglets everywhere. However, it must not be forgotten that piglet producers also suffer from low margins and higher costs.

According to estimates by the ZMP and dealers on the Hanover commodity futures exchange, the piglet price should tend to be stable or somewhat firmer in the next few weeks, since there is still no sign of a turn for the worse on the slaughter pig market. From July onwards, however, the seasonal weak phases are likely to gain the upper hand, although the willingness of the fatteners to move into stalls could increase again after the harvest and the inflow of liquidity. However, a real revival in demand will probably not set in until autumn, and then prices can be expected to rise again over a longer period of time.

All in all, the price level of the previous year should hardly be undershot in the further course of the year, which certainly also contributes to the fact that the sow stock in the EU-15 at the end of last year was two percent smaller than in the previous year. On average over the year, piglets are expected to increase in price by one to three euros compared to the previous year.

Source: Bonn [ZmP]