Hard price and sales competition in the international export of pork

Rising cases of PEDv and falling hog prices in the United States - how together?

This year's growth of PEDv disease (fatal diarrhea disease in piglets) is less serious than in the previous year. Regularly, the epidemic reached its peak during the cold season, when the hygiene measures due to freezing cleaning water have a lower impact.

Since mid Nov 2014 until today, the numbers of new outbreaks by about 50% to almost 100 have grown cases per week.  Because the cold season is coming to an end, the critical phase is already overcomemay not be.  The previous year's peak with over 300 cases per week this year probably doesn't seem to be achieved.

However, are failures of piglets in a range of 5 to 7% to quote. In the previous year pork prices have risen in the spring by €1.30 / kg €1.65 per kg In late summer 2014 even the brand briefly exceeded €2 per kg, as the weaned pigs were missing due to missing piglet.

This year, that is price situation completely different. Despite the still considerable piglet failures the prices a descent of €1,88 / kg have experienced in the Dec. 14 on today's values of nearly €1.20 / kg. The forward rates for deliveries in the coming summer months show a maximum increase to 1.5 or €1.60 / kg.

In contrast to the previous year, this year's market assessment is determined by 3 other important influencing factors.  

(1) the number of sows increased according to the Dec. 14 census in the United States by 4.6% . Thus, the potential of the piglets will be increased significantly.

(2) the increase of slaughter weights intended in the previous year as compensation to + 5 to + 7 kg will continue until today without major changes. In addition, this increases the volume of pork.

(3) the strong dollar exchange rate reduced the competitiveness of US exports, with the result that for lack of domestic demand, pressure is exerted on US pork prices.

The low U.S. hog prices is reflected in the international handsby l. The United States as the world's largest exporter and the EU as the second largest export territory dispute together approximately 60% of the international pork trade. After the Russian import ban, it is difficult to find export replacement for the particularly hard-hit EU.

This is normally only about the price war in the context of cut-throat competition. This takes place in the Asian region.  The markets are China, Japan, South Korea and the Philippines. While the EU has been quite successful in the last year, because the United States have offered too little and too expensive.

This year will be the US offer despite strong dollar exchange rate in terms of quantity and price clearly cheaper fail. Thus, the sales and price scope for the EU will be much critical. High-flying price expectations in the EU are likely to out of place.

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