12/11/2007 
There are seven reasons for the German piglet market to be in a sorry state! - A comment by Andreas Beckhove, ISN market expert
1) Seasonal effects - Piglet prices hit rock bottom for seasonal reasons between August and October each and every year. On the one hand, comparably large quantities of piglets are on offer because the sows’ fertility is most productive at the beginning of the year and because there are only few sows to return to heat. At the same time, the pig feeders expect prices to be poor particularly for piglets to be stalled up in September. For that reason, the pig feeders are slightly reluctant to stall up piglets. 2) Adding on stock - As a result of its comparably good cost effectiveness, pig stock has been increased further throughout the EU over the past two years. This also goes for sow keeping figures.
3) Productivity - An average 0.3 to 0.4 additional piglets are weaned per sow and year. Relating to the all-EU figures, this means that about five to six million additional fattening pigs need to be marketed every year.
4) Feed costs - Even if the market for piglets is a self-contained one, it still orientates toward the pigs-mature-for-slaughter-price and toward the costs arising during fattening, respectively. Unlike the piglet producer, the pig feeder holds the advantage to be able to leave his stables empty in the case of negative marginal income. Increasing feed costs made fattening costs significantly rise. So the pig feeder is willing to stall up piglets only with the piglet price being low.
5) Increasing importation - It has been for various reasons that sow keeping developed so strongly in the Netherlands and in Denmark over the past years. This kind of development was spurred on by increased creation of value per hectare in particular with limited on-hand acreage in both countries. As a result of limited fattening capacities, there is no other way for selling the additionally produced piglets but selling them abroad.
6) Internationally poor demand - In Eastern Europe especially, many farmers sold their feed in view of low pig prices and high corn prices. Their stables are now left empty. Dutch livestock traders in particular had cashed in on that over the past years. A similar situation has become apparent in Spain most recently. Subsequently to a lack of sales, too, the market is very much burdened in those countries.
7) Structural weakness - Over the past years, many German pig feeders have concentrated on the all-in / all-out method. But many of them were unable to establish the stock sizes asked for. Hence, those small stock sizes not having available set commitments are subject to strong price pressure.
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