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Pig farming: profitability holds but prices of heavy animals fall

Weak phase for slaughtering and still firm quotations for cured hams

15, Dec 2023

Also in November, the profitability index of Italian pig farming calculated by Crefis (Economic research center on sustainable supply chains is positive: the economic data relating to the closed cycle is equal to +3.4% and the trend variation marks +52.6%. The figure is attributable to the favorable trend in pig feeding costs and despite the drop in the prices of heavy slaughter animals which, again in November and for the type intended for the protected product, fell by 0.5% per month on month, falling to 2.311 euro/kg. However, the change in prices compared to last year remains strongly positive: +13%.
Profitability also improved in November for the weaning phase in the open cycle, which grew at a monthly level by 8%, supported by the increase in prices of 7kg piglets quoted at 74,590 euros/head (+5.5% compared to the previous month and + 29.9% compared to 2022) and by the fall in food costs. Again with regards to profitability, the trend variation also remains very favourable: +61.4%.
As in the recent past, also in November the profitability of the growth phase showed a cyclical decline of 1.4% (but the trend figure was +5.5%). The fall in prices for 30 kg animals weighed heavily (-3% in November for a value of 3.824 euros/kg) and the increase in the price of piglets purchased at the beginning of the processing cycle. Finally, the profitability of the fattening phase improved in November, showing a Crefis index at +1.6% on a monthly basis and +22.1% on an annual basis.

Also in the period examined, the slaughter market appears composite, with the prices of fresh legs of the heavy type intended for PDO products rising by 0.1% compared to last month and reaching a price of 6.160 euros/kg. The comparison with last year's values is also positive and equal to +5.7%. For fresh legs intended for generic products, however, the November price fell by 0.1% compared to the previous month, reaching a value of 5,100 euros/kg. Even in this case, however, the trend variation remains positive (+1.2%). As regards loins, prices are decreasing month on month for both types of cuts: the Padova cut loin loses 2.8% compared to October, marking a price of 4,640 euros/kg, while the price of the Bologna cut drops by 7.8% reaching an average value of 4.540 euro/kg. Despite the downturn, the trend changes remain favorable and equal to +19% and +16.4% respectively. The profitability of the sector improved slightly on a cyclical level, growing by 0.8% in November, although remaining below last year's values (-0.8%).

As far as the maturing market is concerned, prices in November are stable for both the protected product and the generic one. In detail, the price of Parma Ham aged for 12 months was stable at 10,600 euros/kg while the price of the generic product remained stable at 8,600 euros/kg. The comparison with 2022 prices, however, is positive for both types of ham: +1.2% for the PDO and +17% for the non-protected product. The profitability of the sector in November reveals an uneven situation, with Parma Ham showing a cyclical decline of 0.7% while the generic product increases by 2.2% month on month and by 4.1% on a trend level. Nonetheless, the value of the profitability differential between the two types of products remains in favor of the PDO (+8.9%) even if the distance is narrowing.

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