Ever since the beginning of the year, producer prices for pigs have been in a sorry state. We, the pig feeders, therefore find ourselves to be in the red. But far and wide, there is hardly any indication of the prices going down for meat and sausage sold at the counter – apart from some seasonal and regional publicity campaigns carried out by some food retailers every now and then. In food retailing, the way is not cleared for the low producer prices to be forwarded to the consumers. On the contrary, food retailers are happy to earn fortunes at this time.

In view of the situation prevailing in marketing, the producer prices are found to be too low indeed. They undercut last year’s prices by about 20 percent – and that’s even with the consumer prices for pork exceeding year-ago prices by 5.5 percent (ZMP statement). Prices in particular for the high-quality parts were kept at the late-summer 2006 level, even though pig prices had gone down. Through this, it’s getting obvious that the producer price is not being set by supply and demand currently. Even the rise in VAT (up from 16 to 19 percent at the beginning of the year) cannot be regarded as a reason for this situation: neither food nor earnings have been subject to the rise in VAT.

Last summer, about 820 000 to 870 000 pigs a week were slaughtered in Germany. The producer price then ranged from EUR 1.45 to 1.70 per kg slaughter weight. Compared to 2006, you may certainly say that demand on the export markets is not found to be totally positive. The Russians, for instance, threatened to put a ban on imports from the EU which is quite a burden on the EU exports. Moreover, tremendous subsidies granted by the Putin government prove to gradually have an effect on Russia’s livestock husbandry, thus causing self-sufficiency to increase with regard to pork. But even despite the number of 840 000 to 890 000 weekly slaughters carried out in Germany at present, the pigs are sold well all over Germany. This was even confirmed by the slaughter industry itself.

The background to this is the fact that the number of slaughters is continuously increasing in Germany, at the same time as it is observed to rather decrease in the neighbouring countries. So, slaughters carried out in France, Denmark, the Netherlands and Great Britain went up by a mere 0.4 percent in 2006 – compared with 2005 – whereas they increased by more than 4 percent in Germany in the same space of time.

Regarding the slaughter industry, I really do wonder why they do not succeed in putting higher prices through on food retailing. For years, slaughter companies had brought forward the argument that they had to restructure their companies and increase their productiveness in order to be able to bring their influence to bear on food retailing. It is true that they have done their homework meanwhile with regard to restructuring, but as far as any kind of influence on food retailing is concerned, much is left to be desired. This, however, does not apply to what happens to the pig keepers …

In the end it becomes clear that it is food retailing where the buck stops, needing to adjust downwards the consumer prices to be paid for pork according to the latest producer prices. This way, the market mechanisms would be restarted, domestic demand would go up again and producer prices would boom again subsequently. It would, however, be indispensable for this that consumer prices be adjusted sensibly in food retailing again (moving up as a matter of course!) as soon as domestic demand reacts and goes up again. Meat must never again be degraded by food retailing to be bought cheap and sold dear.