Germany: The economic situation on pig farms is currently more dramatic than during the Corona pandemic

The price for slaughter pigs remains at €1.40 per kilogram of carcass weight. A large supply is meeting a well-supplied meat market and limited sales opportunities. At the same time, the calculated total costs for piglet production and fattening average €2.05 per kilogram of carcass weight. The economic situation for pig farms is therefore more dramatic than in the crisis years of 2020 and 2021.

The slaughter pig market remains unchange. Large numbers of pigs are being offered, meeting a well-supplied meat market. With limited sales opportunities, the market remains under continued pressure; no trend reversal is apparent compared to the previous week.

The price remains at the same level as last week, at €1.40 per kilogram of carcass weight. This price is far from sufficient for profitable pig production. The economic pressure on producers continues to increase.

The extent of the gap between revenue and costs becomes clear when looking at the calculated average total costs: For piglet production and fattening combined, these currently amount to around €2.05 per kilogram of carcass weight. At a price of €1.40, farms cannot cover their costs. The losses are enormous and must be absorbed from their own reserves.

A comparison with the crisis years of 2020 and 2021 illustrates the worsening situation. The average price for pork at that time was around €1.45 per kilogram of carcass weight – slightly higher than the current price. Production costs at that time were approximately €1.70 to €1.80 per kilogram of carcass weight.

Feed, the main cost factor, is now 10 to 15 percent more expensive than in 2020/21. Energy costs are around 25 to 30 percent higher, and personnel costs about 20 to 25 percent higher. Barn construction costs have risen particularly sharply, increasing by around 40 to 50 percent. While investments can be postponed temporarily, the costs for buildings and barns must ultimately be recouped.

This means that today’s revenues, similar to those during the crisis years, are met with significantly higher production costs. Average total costs are roughly 15 to 20 percent higher than they were back then. Even during the COVID-19 crisis, around ten percent of sow farms and pig fattening operations ceased each year. If the economic situation does not improve significantly, another wave of farm closures is imminent.