The VEZG price for slaughter pigs remained at €1.45 per kilogram carcass weight in last week’s price determination, informs ISN. This means the price remains at an extremely low level for pig farmers after the significant drop of 15 cents/kg carcass weight 2 weeks ago.
To cover the full costs of piglet production and pig fattening, more than €2.00 per kilogram of carcass weight would currently be required. This means a shortfall of approximately €55 per pig. With around 900,000 pigs slaughtered per week (slaughtering by slaughterhouses required to register with the Federal Office for Agriculture and Food, plus slaughtering by non-registered slaughterhouses and overweight pigs = total slaughtering in Germany), this translates into a loss of nearly €50 million per week for German pig farmers.
For the slightly increasing number of slaughter pigs in the autumn season, there are currently only limited sales opportunities available. When buying meat in grocery stores, it is becoming increasingly apparent that many households are already running out of budget earlier in the month than before. Consequently, purchases are being made more cautiously – more focused on special offers and with a shift towards cheaper products. Additionally, sales in the out-of-home sector are weak, as restaurants and hotels are suffering from high costs and subdued demand.
The ample supply within the EU is intensifying price pressure on the European pork market. Additional Spanish volumes, in particular, continue to strain the internal market, as Spain, due to restricted exports to third countries, is forced to sell more pork within Europe. This is further increasing competition in the EU markets that are especially important for Germany.
Marketing pork to third-country markets remains difficult. European suppliers face competition there from cheaper pork from countries such as the USA and Brazil. At the same time, demand from Asia, particularly China, remains weak.
The current market situation is exceptional in its duration and extent. It is reminiscent of the massive price crisis during the COVID-19 pandemic. Back then, pig prices came under even greater pressure due to pandemic-related market disruptions. However, the general cost level was also significantly lower than it is today. Ultimately, losses both then and now amounted to around 50 to 60 euros per pig.
A key difference is that many businesses were able to access at least partial bridging loans during the coronavirus crisis. Comparable support is not available today.
Costs have now risen in almost all areas – personnel, energy, veterinary care, construction, and maintenance. Higher energy and fuel prices, in particular, are placing an additional burden on farms. Upstream and downstream sectors, such as livestock traders and slaughterhouses, are also struggling with rising energy costs and are passing these on to agriculture, in some cases through higher transport or logistics fees. Most recently, price increases have also been observed in the most significant cost category – feed.
This means that rising costs are meeting revenues that have been significantly below the overall cost level for months. The current situation is therefore not a temporary price dip, but an exceptional and existential threat to pig farming and the entire domestic value chain.
