Have EU weaner prices peaked?
Following four months of strong growth, weaner prices finally plateaued over the past six weeks.
At almost €59 per head for week ended 4 June, the EU average weaner price remains at historically high levels, and over €10 more than the start of 2017. However, there has been some downwards pressure in the past two weeks, with the price losing just under €1.
Stable prices suggest the market has been largely in balance over the past few weeks. However, the recent downwards pressure does indicate that supplies may now have edged ahead of demand. Indeed, latest market reports from the continent suggest that weaner numbers are higher and demand has now weakened relative to a few weeks prior. Nonetheless, there are still no reports of difficulties marketing weaners, and the finished pig price remains buoyant. It remains to be seen if the recent downwards pressure on weaner prices will become a trend. However, it should be noted there is normally some decline in weaner prices during the summer months.
On an individual country basis, it is the Spanish and French price that has applied the downwards pressure seen over the past few weeks. Elsewhere, including in Germany and the Netherlands, weaner prices have been largely stable, while in Poland and Denmark prices have continued their upward trend.
Both supply and demand factors could influence the direction of the weaner price over the coming weeks. Numbers on the market could now increase, with improved profitability in the finished pig market encouraging herd expansion. Danish census figures for April showed a 2% rise in piglet numbers compared to a year earlier, and the breeding herd had also expanded by 1%. Similar changes may have been seen in other key European producers.
On the demand side, there is increasing uncertainty regarding the EU’s international trade prospects. High pig prices have reduced the competitiveness of EU product on the key Asian markets. Chinese import demand also appears to be slackening and EU trade to this market has been lower year-on-year in February and March. With external trade supporting prices while EU consumer demand remains weak, reduced confidence in the finished pig market later this year may limit the price finishers are willing to pay for weaners.
Bethan Wilkins, Analyst
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