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The decline in profitability continues for the Italian pig farming

Poor performance in the slaughtering and curing of PDO hams

08, Feb 2024

The reduction in profitability of pig farmers in our country continues in January. The Crefis (Economic Research Center on Sustainable Supply Chains profitability index for the closed cycle stands at -4.3% on a quarterly basis, despite showing a largely favorable situation compared to the same period last year : +50.2%. The cause is attributable to the contraction in the prices of heavy type slaughter pigs intended for the PDO product which in January fell to 2.105 euros/kg, with a negative monthly variation of 5.3%. As regards the trend change, the data remains favorable and equal to +9%.

In January, the profitability of the sow breeding phase for the open cycle breeding type improved: the increase compared to December was 0.2% (+45.1% compared to January 2023) supported by the increase in prices of 7 kg piglets which, again in January, reached 79,250 euros/head, increasing by 0.3% compared to December and by 17.2% compared to last year.

However, the profitability of the weaning phase continues to decline and, in the month examined, fell by 2.2% on a quarterly basis (while the trend variation of +0.2% remains weakly positive). In this case, the unfavorable cost situation still weighs heavily (in particular 7 gk piglets) which is not balanced by the growth in values of 40 kg pigs. This type of garment reached a price of 3.438 euros/kg in January, growing by 2.9% compared to the previous month and by 9.1% compared to 2023.

Also for the fattening phase, the Crefis profitability index for January decreased by -4.5% compared to the previous month. The trend figure remains positive: +16.9%.

For the slaughtering sector, in January prices continued to decline on a cyclical basis for the majority of fresh cuts. In particular, the prices of fresh legs of the heavy type intended for typical productions fell by 1.1% compared to the previous month, settling at 6.043 euros/kg even if the trend comparison remains positive (+2.8%). As regards fresh legs of the heavy type intended for non-typical production, there was, again in January and compared to the previous month, a decrease of 1.5% for a value of 4.963 euros/kg and a trend decrease of 1 ,1%. Similar situation for the loins which show prices decreasing month on month: the Padova cut loin quoted 3.975 euro/kg in January: 18.9% less than in December, while the Bologna cut loin stopped at a price of 4,000 euros/kg, decreasing by 20.4% on a monthly basis. However, the trend changes were positive, equal to +12% and +12.7% respectively. The widespread decline in the prices of the main cuts of meat dragged down the profitability of the sector in January, bringing the Crefis index to -0.7% on a cyclical level and -0.1% compared to last year.

The situation is always critical, even in January, for the seasoning sector market which shows falling prices for the PDO product and stationary prices for the generic one. Parma Ham aged for 12 months reached a price of 10.575 euros/kg, down 0.2% compared to December (+1% trend change); while generic ham confirmed the price at 8,600 euros/kg but with a still positive trend variation (+15.4%). In terms of profitability, the protected product was affected by the decrease in prices, showing, in January, a Crefis index decreasing by 0.5%. Reverse trend for the generic product which indicates profitability increasing on a monthly basis by 0.8%; the trend variation is also positive and equal to +7%. The profitability gap between the two products still remains in favor of PDO ham (+5.6%) but the figure has been constantly decreasing for a long time.

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