June 27, 2022

Piglet prices to be at US$71.82 for sow farmers in Netherlands to break even

Piglet prices in the Netherlands would need to reach €68 (US$71.82) per piglet in order for sow farmers to break even due to the rising cost of feed and energy, according to Rabobank.

At the beginning of the second quarter, the average piglet price increased to €60 (US$63.39) per piglet. However, the price level was not maintained. After the peak in week 13, the price gradually dropped to €39/kg (US$41.20)  piglet in week 20.

Piglet prices around the current break-even level were seen in the summer of 2019 and from the end of 2019 through the first half of 2020. However, the demand situation was very different from that of today as China's pork imports had hit a record high at the time, according to Rabobank. It also said there is little chance that the piglet price will reach break-even levels in 2022, while supply is expected to contract across Europe.

Should the sow farmer break even, the cost price for fattening pigs would be 38% higher in the second quarter of 2022 compared to the first quarter of 2022. To cover all costs for fattening farms, the carcass price would have to be €205 (US$216.59) per 100kg carcass. As carcass prices have remained below this level even during the period of high demand in 2019 and 2020, it seems highly unlikely that this break-even level will be reached in 2022, Rabobank said.

The average pig carcass price in week 20, for example, was only €158 (US$166.93) per 100kg carcass in the Netherlands. Therefore, the margins of fatteners are also under pressure, even considering that piglet prices are currently below the break-even level.

- Rabobank