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Pig farming: profitability holds thanks to cost reductions

Slaughtering profitability is recovering, supported by the loin market. For Parma Ham the unfavourable phase continues

18, Jul 2023

The profitability of the Italian pig breeding sector was good in June: the closed cycle recorded a Crefis index up by +1.5% at the economic level; the comparison with the figure for the same period of 2022 remains very favourable: +33.3%. The improvement in the last month is due to the drop in costs for materials intended for pig feed, a stronger result than the drop in revenues from the sale of heavy slaughter animals; in addition to the high costs incurred at the beginning of the production cycle for the purchase of piglets. In fact, the market for heavy slaughter animals destined for the protected circuit, in June, saw a drop in the average monthly prices of 1.8%, which brought the value to 2.096 euro/kg; however, the tendential variation remains positive and equal to +26%.
Even the weaning phase - in the open cycle rearing typology - shows increasing profitability: the Crefis index recorded in June was +2.2% month on month (+42% the tendential variation). This is essentially due to the drop in pig feed prices since the price of 7 kg animals, again in June, remained unchanged at 70.430 euros/head (+30% compared with last year's values). Also for the growth phase, profitability at a cyclical level increased by 0.8% (+39.3% at a trend level), despite the average monthly price of 30 kg pigs falling to 4.543 euro/kg in June: -0 .6% MoM, but +42% YoY.
The fattening phase, also in June, shows, at a cyclical level, a stability of the profitability index which is supported, also in this case, by the drop in commodity prices for pig feed. However, the comparison with the situation in 2022 remains largely favourable: the trend variation is equal to +33.3%.

The slaughtering market, in June, marks a decline in average monthly prices. More specifically, for fresh thighs of the heavy type intended for typical productions, the quotation in the month under examination is equal to 6.008 euro/kg (-1% the cyclical variation). The change compared to last year remains favourable: +12.2%. Also in June, the prices of heavy fresh thighs intended for non-typical productions fell by 0.8%, falling to 5.050 euro/kg; the trend variation was positive (+7.9%). On the other hand, there is a good moment for the prices of loins, driven by the typical seasonal increase in consumption: the Padova cut records an increase of 2.7% (4.340 euro/kg the average monthly value); the Bologna cut grows by 7.3% (4.240 euro/kg the average monthly price). Again for loins, the trend changes were also positive at +17.9% and +28.5% respectively. On the profitability side, in June, the sector shows a positive momentum at the economic level, showing the Crefis index at +1.6%, but the trend compared to last year is still unfavorable (-8%).

Heterogeneous trends in June for prices in the cured ham curing sector. Parma Ham at 12 months showed an average monthly price of 10.700 euro/kg; the trend variation remains positive and equal to +6.5%. While the price of non-typical cured ham gained 1.1% on a monthly basis in June, reaching 8.340 euro/kg (+21.8% the trend variation).
A similar situation for profitability: PDO ham aged 12 months suffers from the stability of prices in the period and the high procurement costs of fresh legs at the beginning of the seasoning, thus losing 1.4% on a monthly basis. On the contrary, the profitability of generic ham is, albeit slightly, favored by the cyclical increase in prices and shows the Crefis index at + 0.3% on a monthly basis in June but the trend figure is negative (-1.2%). However, the difference in profitability between the two types of hams remains in favor of the protected product: +20.8%.

Source: CREFIS



What is Crefis
Crefis – Economic research center on sustainable supply chains of the Catholic University of the Sacred Heart directed by Professor Gabriele Canali – carries out monitoring and analysis of pig supply chains, thanks to the support provided by the Agriculture Department of the Lombardy Region, Unioncamere Lombardia, the Mantua Chamber of Commerce.
In addition to this activity, the Center actively collaborates on specific projects with various bodies, organizations,
associations and districts of the pig production chain, from cereals to cured meats.
www.crefis.it


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