What happens to basic farm purchase prices can cause monitors to have a slight atrial fibrillation. According to March data released by the Central Statistics Office on Thursday, annual growth has reached tens of percent. In March alone, pig prices nearly halved. What’s going on?
The answer comes from a new report on the situation in our pig market, prepared by Gobarto, one of the largest Polish companies operating in the meat industry. Gobarto was tempted to analyze the data of the Agency for the Restructuring and Modernization of Agriculture: they showed that the number of pigs in Poland is constantly decreasing and today is 9.79 million units. While at the beginning of the year it reached 10.14 million units. The number of pigs during the quarter decreased by 355 thousand, by 3.5%. Every day, the inventory decreased by an average of 4.6 thousand people. to cut. Today it is almost half of what it was 20 years ago.
The number of pig herds is also rapidly declining. At the end of March, there were 66.2 thousand people. Subsequently. This means that over the past three months their number has decreased by 5.7%. On average, 51 flocks fell per day. – If this downward trend is maintained, in just two or three months we may have half the farms in Poland as at the end of 2019 – the report reads.
However, the number of herds is increasing and now stands at 148 heads. Twenty years ago, the rate was only 25 per herd. However, we are still far from Western standards, as the herds are increasing in numbers. We have 3 percent of the largest farms, that is, those with more than 1,000 pigs, which are responsible for more than half of Poland’s pig farms.
Accumulation of causes
– Two diseases, ASF and covid, mainly contributed to the stock drop – Jacek Jagiełłowicz, Agro Gobarto’s president, tells Rzeczpospolita. It shows that the collapse of supply chains at the start of the pandemic, shutdowns, shutdowns of restaurants, the ASF hit on European producers and the ban on pork exports, mainly from Germany to China, left a lot of meat on the EU market. This has been adversely affected by the rapid rebuilding of China’s pigs. – All this led to a long-term collapse in prices and a decrease in the profitability of production. Unfortunately, its costs are constantly increasing, which will certainly lead to a further reduction in the number of pig farms and the number of livestock in the country – says President Jagiełłowicz.
– We have a catastrophe at the pig market – Janusz Pechosinski, the former deputy prime minister and head of the PSL, tells us, in turn.
He argues that this is the result of many years of decline in production efficiency. This, in turn, has been achieved recently through the accumulating increasing costs of feed, energy and labour. – There were months when the farmer added 100 to 200 zlotys per piglet. A 20 kg piglet costs 230 PLN, and the farmer charged 550 PLN for a 100 kg pig, so it is not surprising that production collapsed – explains Pechosinski. – This has reduced the number of animals to just over 9.5 million heads, and the situation is tragic in the breeding of pigs and pigs. All this translates to an increase in purchase prices.
– The increase in prices has already been visible in Germany for several months, and our market is closely related to the German market – says Jacob Olebra, economist and expert on the agricultural food market at Credit Agricole – Polska.
Competition for start-ups and innovative companies
He explains that with the fading of the epidemiological situation in Europe, the demand for pork is increasing, and this is also due to an increase in orders from hotels and restaurants. – This demand grows under conditions of limited supply that have fallen due to the decline in the profitability of production for several months and sometimes unprofitable. And on top of all this, we must charge increased feed prices. Olipra explains that when cattle are scarce in the market, farmers can charge more for it.
The cutlet won’t go away
Will this situation lead to an increase in the stock of pigs? – In Poland, not necessarily – says the expert of Credit Agricole Bank. This explains the many structural problems our pig sector suffers from. He lists, among other things, the decline in competitiveness, the continued massive fragmentation of production, the ASF, the ban on export markets. – In general, our farmers in the pig sector are having a hard time – says Jakob Olbra.
But he assures you that it’s not as if pork prices are going to go up forever. We have production cycles, high and low, low and low. The fact that we will not produce this meat does not mean that Germany or the Netherlands will not manufacture it. We will simply be a growing pork importer, Credit Agricole expert explains.
Janusz Picchusinski notes that we have been a net importer of meat for a long time, and our positive trade balance results, among other things, from the fact that we import a lot of carcasses that our meat plants process and then export the product.
– There will be no shortage of pork chops on our tables – assures Jacek Jagiełłowicz. – The problem is that it will be less Polish, because we are importing more and more pork, mainly from Germany, Spain, Belgium and Denmark. Yes, unfortunately, it has been going on for years.
The rise in agricultural prices is accelerating even more
The Central Statistics Office (GUS) reported Thursday that wheat and hog prices were the most expensive in March. Wheat purchase prices increased both compared to February (by 19.9%) and to the same period in 2021 (by 60.9%). In the markets, wheat fell 16.7 percent. More expensive than the previous month. The purchase price of rye rose 9.2 percent in March. Compared to February, it increased by 63 percent. higher than last year. In the market turnover, the price of rye increased by 11.4%. compared to February. The purchase price of potatoes increased 2.3% on a monthly basis. and by 28.2%. during the year. In the markets, it is up 1.7% in a month. The price of Żywiec beef increased by 9.4 percent. per month and 55.3 percent. every year. In the markets, their prices were pushed up by 4.6 percent. More than a month ago. In contrast, the purchase price of live pigs increased by 49.2 percent on a monthly basis. It was 22.4 percent. higher than the previous year. In the markets, 1 kg of this cattle was paid by 18.2 percent. More than in February. The purchase price of slaughtered poultry increased compared to February (by 13.2%) and compared to March 2021 (by 39.9%). For 1 hectool of milk, in March, the purchase price was 6.7 percent. More than February and by 29.7%. over a year ago. ∑