Dynamic situation in the Polish pig market

February was full of very dynamic changes for the hog market in Poland. Of course, the situation was mainly influenced by the situation in Germany. At the beginning of last month, the price on the German VEZG market started to increase, first by 10 cents, and after a week it increased by another 5 cents. Following a week of calm, the price rose again and finally, we ended February at €2.20 per kg carcass (57% lean content), i.e. PLN 9.47. In just one month, the German market price increased by 10% compared to the value from the end of January: this is a huge change!

How has our western neighbor's situation affected the Polish market? The maximum prices at the moment (beginning of March) are approximately PLN 9.20-9.40 per kg in class E (carcass with 56% lean content), but we have to look at the average values, i.e. approximately PLN 9.29. Compared to the end of January (PLN 8.58), this is an increase of just over 8%. It is striking to see a price increase that is lower than our western neighbors (10%). Why such a difference? In my opinion, slaughterhouses see that further increases will not translate into increased slaughter and that, in any case, their margins are very low. On top of all this, there is pressure from trade, which is willing to import cheaper pork from EU countries that decide to liquidate part of the slaughter at competitive prices.

Along with rising finishing pig prices, there is also an increase in weaned piglet prices, which are also becoming more expensive due to the very low supply. Following the last pig market crisis in 2022, the sow herd in the EU has declined significantly, resulting in a low supply of piglets for sale for finishing. For obvious reasons, this leads to higher prices for these animals, and the only thing currently encouraging farmers to take risks in purchasing is the very low cereal prices, which makes it easier to achieve profitability.

So, how will the market shape up this March?

To answer this question, one must first understand what is driving the current price increases. It is easy to assume that it is due to the upcoming Easter holidays. This period is characterized by an increased demand for meat. After the boom before Christmas, which led to a sudden influx of pigs combined with mediocre trade, the effect was quite substantial discounts and the warehouses were full... there is no trace of this left.

Currently, slaughterhouses are even hiring subcontractors to be able to meet their slaughter schedule as much as possible. However, we are starting to see the market calm down. This does not mean that demand for pork is falling, but (I believe) we have reached an equilibrium where slaughterhouses are willing to pay the appropriate rates, the farmer is willing to accept them, and the trade is willing to pay. If this is so, then we should see a quiet market during Easter, which is in early April.

So, will the price start going down after this period?

It depends on the weather because we are starting to get ready for barbecue season. Of course, a lot depends on the weather, but in recent years it has been conducive to gatherings around a campfire or barbecue. If this were to be the case, the price should not change significantly, although personally, I expect some increases. Will it be so? Time will tell!

However, the truth is that the breeding sow trade is currently booming. Many farmers who previously abandoned animal production are considering returning to the business, which is of course related to the prices of agricultural products, which have been at an increasingly lower level since August. With a shortage of weaned piglets on the market, some people decide to return to piglet production, which means that the demand for gilts is quite high, and this is good news for those who are in this business, because the product is decreasing, according to my own experience.