How are the price declines in pigs?

Pig prices plummet - what are the background?

In the last three weeks of the month September 2014 the pig prices include rd. - 20 ct / kg or - 12%. In a short time only in markets for perishable goods such as vegetables and marts has sharp price movements.

The pigmeat market is to a certain extent this value vulnerable markets, which can not sufficiently compensate for irregular fluctuations in supply demand through inadequate mitigation instruments. The pigmeat market is characterised by the fresh meat business with respect to its price level basically. The few high-quality pieces such as salmon, pork chop, to the extent even ham and neck determine the value of the halves of the battle more than three quarters. Weight the less valuable items such as more section parts, which are suitable only for the production of less valuable sausages and bacon but there are more.

In relation to the demand an oversupply, urging in particular that valuable fresh parts within a week on the paragraph. It's a largely saturated consumer market and low price elasticity only of significantly declining resale prices. A recovery of this worth structural parts in the category of substandard sections threatens sales fail, succeed with a multiple discount.

Exports also not in a position to act as a balancing valve is such short notice. High quality fresh cuts are already barely required in international trade, it dominate the less valuable cuts up to the case (see China). An additional paragraph is usually only within the framework of existing contractual agreements and then also Go ahead favourable conditions. In the age of global communication, any operators is informed Right away about the situation on its key markets of part of. New sales channels with other countries and legal habits should not be accomplished overnight.

The sharp competition in the meat industry ensures swift action, if you want to get not too late. Outwards, this same action of the meat industry acts as a consultation. Not needed. The market rules are unambiguous for any experienced participants.

The current development of strongly fallen pig prices has clearly identifiable causes.

1. The Russian import lock with a sales volume of approximately 650,000 t affects directly in a production area with a self-sufficiency rate of approximately 110%. The force since Feb 2014 and in the meantime advanced lock in spring 2014 in above-average numbers of battle close to and over the 1 million mark has suddenly resulted in a price decline to €1.45 per kg.
2. Pork prices in the summer increased to values of €1.65 / kg and more, caused by declining battle figures in the order of magnitude of 950,000 pigs per week. A certain amount of support provided the barbecue season, however only in occasional periods of time such as in the month of April and early may, as well as some Schönwetterperioden in June. The phases of bad weather were already below-average prices around €1.60 per kg in July and August.
3. At the latest with beginning of increasing numbers of battle just under until about The 1 million mark , a clear price descent, which interestingly has landed at the same level in terms of battle figures and prices like in Feb. began in September 2014. 2014.
4. For the further development of a build-up of inventories in the dimension of a forthcoming barbecue season is not expected. Only the Christmas business gives rise to only limited hope. Usually the battle levels in the course of IV. Remove quarter compared to III little quarter. That could provide the necessary air to stabilize pork prices at a low level. In January, but threatens the weak Christmas business.

Hopes for improvement could include the combination of a slight increase in consumption in the country, No more battle rising sea levels and improvements in the third-country sales.  A lift of the Russian import ban is still far in the distance.