Pork prices drops in Denmark, increase foreseen
The price of pork has dropped and will increase in 2015. This is estimated by the Danish Agriculture & Food Council in a new forecast
The expected quotation per kg meat has been upgraded by DKK 0.50 (€0.6) in the second quarter, while the expectations for the third and fourth quarters are upgraded by DKK 0.25 (€0.3) and 0.50 per kg.
“The reason for the increase in quotation is primarily the development of the dollar rate. Since the last forecast late 2014 the dollar has risen more than 15% compared to Danish kroners and Euros. It strengthens the competitiveness compared to US pork,” says Karsten Flemin, senior consultant at Danish Agriculture and Food Council.
In addition, it is expected that the EU initiative with support for storage of pork will have a positive impact on the quotation in the second quarter.
The upgrade means an increase of the expected average price for 2015 from DKK 9.00 (€1.20) to 9.35 (€1.25) per kg.
According to calculations from SEGES, this means a much-needed improvement in earnings for the pig producers.
“An average pig producer will have his earnings improved by DKK 338,000 (€45,235) in 2015 with these price increases. The biggest improvement will be experienced by the piglet producers, but the finisher producers will also experience a plus,” says Brian Oster Hansen, senior economist at SEGES.
Compared to the forecast from SEGES and Danish Agriculture and Food Council in December 2014, there is an upgrade of the expected operating results for an average farmer from DKK -822,000 to DKK -484,000 in 2015. The operating result is before the remuneration of the farmer’s work performance and return on equity.
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