Price level reduced by 8 % throughout the EU -- Germany minus 10 % -- Difference in payment EUR 16 per pig -- Fluctuation margin increases -- Poland hit by 26 % currency depreciation
In 2009, the quotations lagged far behind the previous year’s prices in the six most densely pig-populated EU-27 countries. Compared with the year before, the prices in Spain, Germany, Poland, the Netherlands, France and Denmark fell by 4 to 11 percent which equals 6 to 16 cents less than in 2008. 68 % percent of all pigs raised in Europe in 2009 were held in these six countries. The 2009 summer months’ high turned out to be about 10 cents lower than that of 2008. Taking all countries into consideration, the calculated average price amounted to EUR 1.36 per kg slaughter weight in 2008 whereas it was EUR 1.47 per kg slaughter weight the year before. It is true that the pig feeders were sort of relieved by lower feed costs. However, the price decline could hardly be compensated for by those.
In comparison with the previous year, the difference between the corrected German and other quotations halved. Spain is an exception, with the difference towards Germany having increased by 8.5 cents there in 2009. Yet, reporting minus 4 %, Spain presents the least change in price as it comes to comparison with the other countries.
In 2009, the German quotation floated around rank 2. Having decreased by 10 % compared to the year before, the price proved to underachieve. With a monetary recession of 14.5 cents compared to 2008, the 2009 payout price per fattening pig at an average weight of about 94kg went down by more than 13 euros.
Poland had made it to rank 1 in 2008. But in 2009, Spain was able to recapture the leading position in Europe, relegating Germany and Poland to ranks 2 and 3, respectively. The German and Polish quotations are close on each other’s heels, showing a difference of no more than 0.4 cents. As a result of the financial crisis, the Polish zloty lost 20 % in value over the last year, compared to the euro. This can be taken as an explanation for the shifting to rank 3.
The Polish quotation was the one to lose most with its 11 % decrease. Had Poland still led during the first few weeks of 2009, the Spanish started a catch-up race. The Spanish corrected quotation passed, and until autumn it clearly remained in the front. In autumn, the Spanish quotation fell harder than the other five quotations. The seasonal decrease, which is typical for the country, however wasn’t as significant as it had been the years before, when Spain often brought up the rear.
In respect of European quotations, Germany continues to hold the lead. Just like over the previous years, the Dutch quotation in particular was geared to Germany as the leader. The Dutch corrected quotation still is moving about 2 cents below Germany’s. This way, the Dutch slaughter companies make sure their slaughter hooks are operated at full capacity and exports of Dutch pigs toward Germany are kept within limits as regards quantities.
In 2009, the French had to make do with maintaining rank 5 on the list, just as they had to in 2008. In the course of the year, it became ever clearer that France in particular as well as Denmark were the ones to draw the short straw during the summer period of high prices. There, they were able to profit only little from the booming demand. Relative to the comparison countries, France even brought up the rear from September to mid-December 2009.
Traditionally, Denmark brings up the rear in the European price structure over the remaining time. There, the corrected quotation fell short of Germany’s quotation by as much as 7.6 cents. This was by even 16.9 cents below the Spanish leading quotation. Thus, the payout price per fattening pig is by almost 16 euros lower in Denmark than it is in Spain. So, the difference between the comparison countries’ highest and lowest price levels has once again become more significant, compared with the year before. The tough influence the Danish group of slaughter companies, Danish Crown, exerts on prices paid to the producers bound by contract continues to be strongly debated. The Danish krone / Euro exchange rate remains steady; so the financial crisis is noneffective here.
In 2010, the German self-sufficiency is most likely to achieve 110 percent. This way, export will be more important than ever. The pan-European pig production is supposed to get to a high level this year. Germany as a net exporter depends on exports towards third countries. Most presumably, there will be fewer exports towards Russia in January than there were the months before. But then, they are expected to get back to their previous level from February on. It appears most likely that the increased consumption in Russia cannot be met by domestic production.