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Shrinking profitability of pig farming

Only loins support the profitability of the slaughtering sector, while the market stagnation continues to penalise seasoners

18, Jan 2024

In contrast to the previous month, the profitability of the Italian pig breeding sector drops: in December, for the closed cycle, the Crefis index (Economic Research Center on Sustainable Supply Chains marks -1.6% month on month . However, the comparison with the data from a year earlier still remains more than positive: +53.6% on December 2022. The situation is similar to that photographed last month with the prices of heavy slaughter pigs destined for the PDO product falling of 3.8% on a monthly basis (2.223 euros/kg the average price in December) which do not allow the sector to recover profitability thanks to the low costs relating to pig feeding. The trend change in prices, however, is still favorable and equal to +11%.
As regards open-cycle breeding activity, again in December, Crefis indicates an increase in profitability at sow farm level (+6.8% on a cyclical level and +54% on a trend level) due to the increase in prices of 7 kg piglets quoted in December at 78,988 euros/head (+5.9% cyclical variation) and the low costs of feeding the animals.
On the other hand, the profitability of weaning (site 2) is slightly decreasing, falling by 0.3% on a monthly basis in the period examined (+4.1% trend figure), discounting an unfavorable concomitance between the increasing costs for purchase of piglets and for their feeding, despite the slight increase in the prices of output animals. In fact, the prices of 40 kg pigs in December recorded +0.3% on November (for an average value of 3.341 euros/kg) and +10% on December 2022.
The profitability of the fattening phase is also unfavorable, losing 2.8% on a monthly basis, although the comparison with the 2022 data is still decidedly positive: +20.4%.

Market in decline in December for Italian slaughter which shows the prices of fresh legs of the heavy type intended for typical productions falling, compared to November, by 0.8% reaching a value of 6.113 euro/kg, even if the trend variation remains positive and equal to +4.2%. Same trend for the prices of heavy fresh legs intended for non-typical production which, again in December, fell by 1.2%, settling at 5,040 euros/kg. The comparison with the 2022 price lists is stable. The loins are doing better, showing increasing prices in the period examined. More specifically, the Taglio Padova increased compared to November by 5.6%, reaching a price of 4,900 euros/kg, while the Taglio Bologna grew on an economic level by 10.7%, reaching a price of 5,025 euros/kg. Both trend variations were positive at +25.6% and +28.8% respectively. The profitability of the sector continued to improve in December with the Crefis index showing an increase of 4.9% (+1.6% trend variation).

The stasis of the ham curing market continues in December, with the average prices of Parma ham cured for 12 months remaining at 10,600 euro/kg (+1.2% variation on an annual basis) and the generic product confirmed at 8,600 euro/ kg (+15.4% trend variation).
Decreasing profitability for DOP ham curers, falling in December by 0.6% on a monthly basis and by 15.3% on an annual basis. A positive situation, however, for the generic product which shows month-on-month profitability increasing by 1.2% (+4.3% trend variation). Although still decreasing, the profitability gap between PDO and non-protected production remains in favor of the former: +7%.

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