The adaptation of slaughtering and meat cutting processes to the COVID-19 risk situation resulted in an estimated capacity reduction of 15% compared to the pre-coronavirus period. As a consequence, a bottleneck effect occurred in the pig meat value chain. Reducing imports of live animals and increasing exports could decrease, but not eliminate the resulting surplus of live pigs. At the end of 2020, the number of pigs waiting to be slaughtered was estimated at approximately one million and due to this surplus German standard quality pig prices dropped by roughly 12%. Moreover, farmers faced price cuts as a result of pigs being overweight, additional feeding costs from pigs remaining on farms, and foregone profits because stables could not be used for further production. The COVID-19 effects were accompanied by the outbreak of African swine fever in Germany and subsequent export restrictions. This led to an additional price cut of 13% and aggravated the situation of German producers of fattened pigs and piglets. A short-term adjustment of production quantities to prices has not been possible, as present supply is determined by the sow insemination a year ago. As a result, it will take until mid-late 2021 before low prices lead to lower supply. In the first quarter of 2021, the situation on the German slaughter pig market relaxed. Average prices for fattened pigs, slaughter-weight as well as piglet prices approached the long-term average again. To reduce the impact of future crises on the meat sector, it is necessary to develop contingency plans that take into account the high interdependency among the individual stages of the value chain.
Keywords: COVID-19, Slaughterhouse Sector, Pork Value Chain.
The adaptation of slaughtering and meat cutting processes to the COVID-19 risk situation resulted in an estimated capacity reduction of 15% compared to the pre-coronavirus period. As a consequence, a bottleneck effect occurred in the pig meat value chain. Reducing imports of live animals and increasing exports could decrease, but not eliminate the resulting surplus of live pigs. At the end of 2020, the number of pigs waiting to be slaughtered was estimated at approximately one million and due to this surplus German standard quality pig prices dropped by roughly 12%. Moreover, farmers faced price cuts as a result of pigs being overweight, additional feeding costs from pigs remaining on farms, and foregone profits because stables could not be used for further production. The COVID-19 effects were accompanied by the outbreak of African swine fever in Germany and subsequent export restrictions. This led to an additional price cut of 13% and aggravated the situation of German producers of fattened pigs and piglets. A short-term adjustment of production quantities to prices has not been possible, as present supply is determined by the sow insemination a year ago. As a result, it will take until mid-late 2021 before low prices lead to lower supply. In the first quarter of 2021, the situation on the German slaughter pig market relaxed. Average prices for fattened pigs, slaughter-weight as well as piglet prices approached the long-term average again. To reduce the impact of future crises on the meat sector, it is necessary to develop contingency plans that take into account the high interdependency among the individual stages of the value chain.
Keywords: COVID-19, Slaughterhouse Sector, Pork Value Chain.