3 November 2022

3 minute read

By: Philippe Mallétroit

Europe

Hog market price

Since the 21^st of February, the hog price has continued to increase to reach its highest level on the 6^th of October at 2.054 € per kg carcass. Over this period of almost 8 months, the increase was 0.773 € per kg, about 73 € per pig.

Obviously, such an increase was necessary when the feed prices exceeded 400 € per ton this last summer.

Today, since the 10^th of October we see hog prices decreasing for the first time since February and it is the case at each market (in France there are two market cotation per week, on Monday and on Thursday).

Last week the price dropped by 6.1 cts to reach 1.914 €. This week due to the holidays of November 1st and November 11th next week, the cooperatives in charge to market finisher pigs to slaughterhouses cannot resist because the objective is to preserve maximum fluidity in the output of the livestock.

Usually, the activity of the week before the 1^st November 1st is quite high, however, the past week’s slaughterings were only 373,060 pigs, a decrease of 10,600 pigs (-2.8%) compared to 378,848 pigs slaughtered in the same week in 2021. Is this due to the fall in production, or does it correspond to a reduction in slaughterhouse activity due to a lack of commercial dynamism?

Hard times for organic production

In October 2022, according to INSEE (National Institute for Statistics and Economic Studies), consumer prices will rise by 6.2%, after +5.6% the previous month, due to the increase in energy, food, and manufactured goods prices following the war in Ukraine.

Food price inflation exceeded overall inflation in 83% of the 166 countries for which both the food price index and the global price index are available, according to the World Bank. In Germany, food prices increased by 18.7% in September, by 12% in Italy (12%), and by 12.8% in the Netherlands (12.8%). In France, between September 2021 and September 2022 food prices would have increased by almost 10% in supermarkets.

Many consumers are looking for the first prices to such an extent that sales of distributor products and first prices would have increased by 15% in one year.

In this context, some products suffer more than others, and this is particularly the case for organic pork production. Many organic producers that we know told us they want to stop and switch their production to conventional production when it is possible. For others, less fortunate, the contracts for taking over organic pork have stopped suddenly.

Very clearly this market seems very compromised, the proof with some prices recorded in a supermarket on products of the same packer:

4 slices Ham cooked without nitrite (140 g): €2.59, or €18.50 per kg

4 slices Ham cooked without nitrite (120 g): €3.92, or €32.67 per kg

Same product, same taste, different production system = price difference + 76%!

It is easy to understand that in the present period consumers are turning away from this type of product.

Let’s just hope that the cooperatives that have pushed young farmers in recent years to invest heavily in new organic buildings will have solutions to offer them.

Source : Marché du Porc Breton, Les Echos, INSEE