We have a “pig hole” ahead of us. When will the crisis peak?

As we read in the latest Agro Map – a cyclical analysis of agricultural markets prepared by the Credit Agricole bank, the turning point of the “pig cycle” took place already in the third quarter of last year. Despite the relatively good economic situation we are currently experiencing, analysts are not optimistic:

When will the market crash?

– We expect that the next quarters will bring a further decline in purchase prices, supported by the gradual recovery of the pig population in the EU due to the high profitability of production in the conditions of still weak demand. The prospect of increasing supply on the EU pork market is signaled by data indicating an increase in the EU population of pregnant sows. We believe that the price trough will be reached in the first quarter of 2025, after which prices will gradually start to increase, which will be supported by the expected recovery in demand supported by an increase in the purchasing power of households – we read in the analysis.

Pork exports are growing

As we read in the study, in 2023 the value of Polish pork exports (livestock, meat and processed meat) increased by 7.3%. year to year, compared to an increase of 16.4%. y/y in the same period of 2022.

The purchase price of livestock in January was PLN 7.05/kg (-7.1% y/y), and the price of pig feed was PLN 1.84/kg (-13.0% y/y). As a result, the livestock/feed price ratio was 3.84 in January compared to 3.58 a year ago, indicating improved production profitability.

Forecasts of fattening pig prices

– After taking into account global and domestic factors, we forecast that the purchase price of live pigs in Poland at the end of 2024 will be approximately PLN 6.00/kg and PLN 7.10/kg at the end of 2025. The main risk factors for our scenario are further the spread of ASF in Europe, as well as the pace of reconstruction of the pig population in the EU – we read.

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