German imports from abroad on the decline.
A declining supply of piglets from domestic production has been offset by increasing piglet imports over the past 10 years. Last year, Germany imported over 11 million piglets. Around 6.63 million came from Denmark alone in 2012 and around 4.1 million animals from the Netherlands found their fattening place in Germany. Dutch piglet imports have doubled in the last 7 years; imports from Denmark have tripled.
Now the picture has changed. The domestic piglet volume continues to show a downward trend, estimated at 3 to 4% in the first 4 months of 2013.
However, this is no longer being offset by imports from abroad. It has already become apparent in recent years that the influx from other countries has slowed down. In the first 3 months of 2013, foreign imports from both Denmark and the Netherlands declined noticeably. In total, around 20,000 piglets or 1.2% fewer piglets found their way to Germany from Denmark. However, Polish imports from our northern neighbor doubled.
Around 60,000 fewer piglets were imported to Germany from the Netherlands in the first 20 calendar weeks.
The total export volumes of both countries have been stagnating for three years. The growth rates of previous years are a thing of the past. With a limited sales volume, the price worthiness of the respective recipient locations is decisive. Only sufficiently high piglet prices attract lots into the country. If prices are too low, the animal material moves to other processing locations, mainly to Poland and the Czech Republic.
As a result, piglets become scarce in relation to the volume of demand from fatteners. The relative scarcity can be clearly seen in the narrowed ratio between pig, feed and piglet prices.
Feed prices are expected to fall in the coming summer and fall, but pig prices are unlikely to expand significantly. The improvement in the fattener margin is likely to benefit piglet prices, as piglet numbers will become the limiting factor. This will balance out the situation that was reversed in 2007/08 and 2009/10. At that time, high feed costs were passed on to piglet prices because there was an abundant supply of piglets from home and abroad.
ZMP opinion: The piglet supply in Germany is becoming increasingly scarce. Falling domestic production is coinciding with declining piglet imports. Measured against pig and feed prices, piglets are becoming relatively more expensive. The usual autumn low in piglet prices is likely to be less pronounced depending on pig prices.
