Pig Market: Price pressure and decline in production

The stability that characterized the pig price for weeks was disrupted in mid-January by a significant drop. Concerns about maintaining this price level grew, with ample supply of pork, difficult meat and by-product sales, and lower prices on the global market being the main causes. The question on many minds: is this an incidental price drop or does it mark the beginning of a downward trend?

In 2023, pig meat production in the EU27 and the UK showed a sharp decline. From January to October 2023, production decreased by 7% compared to 2022. Particularly in Denmark, the Netherlands, and Germany, the declines were significant. Looking ahead to 2024, experts anticipate that this decline will continue, albeit at a slowing pace.

Export of piglets and pigs is picking up

Notable is the increase in the export of Dutch piglets and pigs to Germany and Spain in 2023. Especially to Germany, the export of slaughter-ready pigs increased, indicating a structural overcapacity in the meat processing sector.

In January 2024, pig prices came under pressure, especially in Northwest Europe. The ample supply of pigs could easily meet demand. Despite this price pressure, the demand for piglets remains high, which is a positive signal for the sector.

However, the higher price of piglets may put pressure on the margins of pig farmers in the Netherlands in the first quarter of 2024, along with rising manure disposal costs and interest rates. Experts predict a possible rise in pig prices later in the quarter as demand improves.

As for feed prices, they are expected to remain favorable in the first quarter of 2024, especially due to ample global stocks of soybeans and corn. Nevertheless, there are upward risks for wheat prices due to wet weather conditions in Europe and the conflict in the Red Sea, which could affect transportation costs.

Continued lower exports outside of Europe

The export of pig meat from the EU27 and the UK decreased significantly from January to November 2023, mainly due to a decline in the export of muscle meat. The import demand from China is expected to remain under pressure in the first half of 2024, but a reduction in the livestock population could lead to rising prices in the second half of the year and improvement in import levels.

Rabobank.nl