Regional differences in pig prices in Germany
With a self-sufficiency rate of over 115%, Germany and Europe are dependent on pork exports. Revenues in the export business therefore set the tone for the prices that can be achieved domestically to a considerable extent. Every kg of export or non-export reduces or depresses the domestic price level. Even if the exported cuts are not representative of the pork cuts of different or lesser value, the prices in the importing countries and the quotations of the competing export countries provide important indications of the price level that can be achieved in this country.
At present, 3 major countries are making a name for themselves. The two major importing countries, China and Russia, have been reporting prices of less than €2.5/kg for months, a level that suggests that these countries have good domestic supplies and no pressing need for imports. In previous years, when supplies were scarcer, prices were well above €2.5 or €3/kg. It is therefore not surprising that the German/European export business is not performing satisfactorily. Global pork trade this year is significantly lower than in previous years. This applies not only to Europe, but also to the USA.
For 3 years in a row, Brazil has been the 4th largest exporter of pork, with prices in the summer months ranging from under €1 to currently €1.15/kg. Even when the higher transportation costs are taken into account, Brazil remains unrivalled in the global pork trade. One of the main reasons for these prices is the currency parity between the Brazilian REAL and the dollar or euro.
Slaughterhouses, which are primarily concerned with supranational sales, will naturally suffer first, while small and medium-sized companies are hardly affected. Consequently, pig prices in the south of Germany with their smaller farm structures are currently at an advantage and the large processing centers in the northwest of the Federal Republic have to stretch to the ceiling.
The differentiation of the German pork market is a consequence of the regional differences in production and marketing structures, a phenomenon that has always existed in principle but is more pronounced at certain times, such as now.
