Control techniques on the pork market in the United States and Europe
The period of 2014/15 is the two leading exporting countries United States and EU of pork to a hard test. The United States will be affected by the plague of PEDv and crippled the EU through the Russian import ban. In both regions, however, are to observe different reaction mechanisms.
In the United States has the overwhelming propagation of deadly diarrhea in piglets animal losses of number of in the cold season Feb. and March 2014 up to 15% resulted. It was foreseeable that the piglets losses would lead to a reduction in the number of battle rd. 6 months later. The loss fell exactly in the time, the highest demand of barbecue season. Highest price increases result would have a demand covering supply.
What is happening in the United States? Already get the Futures Quotes on the stock exchanges of usual € 1.30 per kg to over €1.65 per kg to far before the date of arrival of the supply shortages expected. It begins a growing countermeasures to maintain inventories for the Hauptnachfragesaison. Rising prices indicate the supply side developed a market situation of shortage of. Join the spot rates.
The producers react to the higher prices by increasing the weights of the battle for every animal. This is only economical for high prices, because the weight increases require exceptionally high feed costs. Actually succeeded in the United States, to press down the disease-related failure of pork this way to an estimated 4.5% as compared to the previous year.
On the demand side the consumption slowed on rising consumer prices at an early stage and the released quantities prevented a strong reduction of inventories.
In the barbecue the bottleneck became less than feared noticeable. Pig prices scratched only in the short term to €2 / kg limit, then quickly again to return to average values.
The exchanges have served its purpose, to make their forward-looking lessons and their Eintaxierung in time and adequately on future difficult market conditions.
An countermeasures is in the United States already has been initiated. Expansion of pork production as a result of the high price situation and a less damage-making PEDv epidemic in the spring months of 2015 for all assessment leads to a glut of pork in the course of the year 2015. The stock quotes are gone for several months on plummeting towards €1.20 / kg. The high weight of the battle are still above multi-year averages, but tend to give. On the demand side, a significant build-up of inventories should be noted.
In the EU pork contract on the stock exchange in its predictive function works highly unreliablebecause too few participants provide a little balanced opinion. The weekly coincidences between supply and demand on the cash market determine the price action. The meat industry ensures a seasonal balance of its own accord. The invoicing allow little room for higher or lower slaughter weights. Regulate State activities such as the PLH should engage in extreme cases, but with long reaction time (i.e. too late) and unwanted side effects (stretching the low price period).
The reaction mechanisms between the two regions can not be more different: a future-oriented, the other little looking ahead to the present problem fixed.