To what extent is the determination of the V-price influenced by the slaughter supply?
It would normally be assumed that high slaughter numbers are closely linked to pig prices. However, we must not lose sight of the sales situation at home and abroad. And then there is the time aspect. The most recently recorded slaughter figures are from the week before the V quotation on Friday of the week ending. The V-price itself should be valid for the coming week.
When examining the conceivable relationship constellations between slaughter figures and V-price with the help of correlation calculations, it turns out that the best values for a time-delayed average slaughter quantity come from 3 weeks (previous week, previous week and current week of price determination (quotation date). A different weighting of the individual weeks brought only an insignificant improvement in the accuracy of the results.
One explanation is that the quantities are spread out over the three-week period and the past concrete empirical values leave the decisive impression in the overall view for the assessment of the current supply situation on the quotation date.
Future market estimates (e.g. for the coming week), on the other hand, demonstrably play only a minor role in the V-price determined on Fridays.
However, as is the case in practice - i.e. it is constantly changing - the correlations for the last 3 years vary greatly in closeness. For the current year 2013, the correlation coefficient is just over -0.51, while in 2011 it was -0.22 for the same period. The year 2012 shows a value of almost +-0, i.e. other factors must have played a much more dominant role in V-prices than the change in slaughter volumes. The first assumption is that the export business was still functioning well in the first nine months of 2012.
The high price sensitivity in the current year 2013 is due to the significantly lower supply volumes over the months, which have not exceeded the 1 million mark on a 3-week average since week 13. Only the most recent development shows clear upward trends, although it remains to be seen to what extent this trend will continue.
With the exception of 2013, the calculated correlation values are in a range that does not allow for much reliable interpretation. Once again, it is clear that the pork market remains difficult to calculate due to the strong influence of the fresh meat business. Random events during a short period of actuality play a significant role in market and price developments.
The high correlation for 2013 shows the narrow range of live supply, slaughterhouse capacities and meat sales opportunities in this year. The achievement of upper and lower limits with limited supply is very noticeable in the pricing of a competitive market.
