European pig prices

With carcass bids still languishing in the $53-54/cwt range in the US, I thought it would be fun to take a look at current market prices for slaughter pigs in Europe. The following data was compiled by Feedinfo News Service (www.feedinfo.com). I converted the price reported (Euros per kg carcass) to US values ($/cwt carcass) using yesterdays international conversion rate of 1 Euro = $1.268 USD.

 

Keep in mind that the conversion rate fluctuates constantly, and with the US dollar increasing in value (more dollars per Euro), the prices paid in Euros rise when converted to US dollars. Another item influencing the conversion to US prices is the difference in slaughter techniques. In the US, the Chicago Merchantile Exchange uses a dressing percentage of 74% for the conversion of liveweight to carcass weight. That is, a 260 lb liveweight pig is estimated to yield a carcass weight of 192.4 lbs. This is always with the head removed, etc. In Europe, carcass weights often include the head. In addition, they use differing techniques to remove internal fat, feet, etc. This often means they have dressing percentages greater than 80%.

 

Finally, while the prices may seem high relative to US and Canadian prices, keep in mind that their costs of production are always higher than ours. They pay more for feed grains, more for labor, have higher priced facilities, have significantly higher expenses in meeting regulatory requirements, etc.

 

Similar to the US and Canada, European producers have been reducing their breeding herd in response to the lack of profitability. While the following prices appear very good to us, they are not high enough to support long term profitability for European producers.

 

The data also illustrate the impact of the strengthening dollar on our export trade. As the dollar strengthens relative to other currencies, it becomes less expensive to purchase pork from other suppliers. While the price of EU pork increases when priced in US dollars, when priced in another currency the price rise may not be as large, making European pork more competitive in export markets.

 

Even with all of these differences, it is still fun to compare to our current prices. The following data set has 3 columns, 2 different exchange rates and a comparison versus November 2007 prices. The prices are in $/cwt.

 

 

Exchange Rate USD/Euro

 

Country

$1.268 USD

$1.00 USD

% Nov 07

Germany

 $89.49

$70.58

115.3

Spain

 $77.30

$60.96

112.6

France

 $77.98

 $61.50

109.9

Poland

 $89.22

 $70.36

125.3

Denmark

 $76.67

 $60.47

111.0

Italy

 $101.94

 $80.40

113.1

Netherlands

 $78.48

 $61.90

113.9

Belgium

 $79.80

 $62.93

111.6

United Kingdom

 $90.11

 $71.07

105.1

 

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