GERMANY, Essen. The bottom of the pig market may not yet have been reached. A growing threat comes from Spanish competition.
Management consultant Klaus-Martin Fischer of Ebner Stolz has called for an exit subsidy for Germany's pig farmers. The general conditions for farms are currently very difficult, Fischer explained in a joint presentation with his colleague Christoph Havermann at a networking forum of the Oldenburger Münsterland Agricultural and Food Forum (AEF) in Essen, Oldenburg (Cloppenburg district). One of the core problems, he said, was the occurrence of African swine fever (ASF) in Germany, which has caused exports to collapse and the price of pork to plummet. An end to the development is not in sight, Fischer stressed, forecasting a pig price of € 1.15 per kg for the end of September.
Fischer described accusations that food retailers were responsible for the price slide as unfounded. The retailer's purchase prices had remained fairly constant. Rather, the slaughter industry had lowered the payout prices to compensate for its own losses caused by the export stop. At the same time, the management consultant warned against higher pork prices in this country. These would attract Spanish suppliers, who in turn would have sales problems.
Fischer and Havermann identified the high feed prices, regulatory requirements, for example for fertilization, and political plans at national and European level, such as the Green Deal, as further challenges for domestic farms. In addition, there are the announcements by the food retailer regarding the listing of meat with a high husbandry level. Implementation is inevitably associated with higher consumer prices, says Fischer. However, the vast majority of consumers are very price-sensitive when it comes to meat. In the future, he said, the market is expected to split into two, with a small segment of premium products that meet very high sustainability requirements and a larger segment with meat from the second husbandry level.
In addition, domestic pork producers will have to adjust to competition from Spain, where production costs are lower, Fischer explained. With regard to third-country imports, Havermann criticized the fact that policymakers owe an answer when it comes to protecting against imports with lower standards. According to the experts, in the long term, the only companies that will survive in the pork industry in this country will be those that can optimize their processes, systems and organization, have a good network and reputation, and integrate sustainability goals. In addition, integrated collaboration in the value chain could provide advantages.