This week: Slowly, movement is also coming to our market. It will remain the unfathomable mystery of this trade why it has once again taken weeks, perhaps even months, for market realities to translate into our market. Our lack of understanding and all the arguments and facts have been sufficiently illuminated in recent weeks. There was no news this week that could perhaps be interpreted as a trigger. The only explanation one might have is, on the one hand, the rhythm of the price agreements in Central Europe, which has a stronger effect the fewer goods are exported overseas. The prices at the slaughterhouses are fixed in a four-week rhythm and within this time almost nothing changes on the official price lists.

Again and again, one tries to apply what happens at the slaughterhouses to the markets in some way. This influence of this becomes somewhat less when the share of business in Asia is larger, where traditionally the international market situation is analysed almost daily by tanners, who then draw conclusions and set their prices accordingly.

Things went wrong here in Europe in March, and the really annoying thing is that mistakes made by individuals unfortunately always affect almost everyone in the same way for a long time. Well, it can’t be helped and as long as people are not prepared to orient themselves by facts and relatively easy-to-analyse data, it will stay that way.
The market situation changed relatively quickly in the middle of last week. All of a sudden, more and more reports emerged of offers from well-known suppliers in larger volumes in China, where prices were reduced significantly. It is of course because the price level had been far too high for the international markets for a long time before.

In Europe, the remarkable thing was that this week some larger suppliers were already trying to place special spot deals with regular customers or were ready to talk about the next period with delivery volumes and prices. This is particularly unusual and usually means that, despite the low slaughter, fears have spread that prices will fall or that people had not yet sold all their production. In the end, none of this is surprising and it merely initiated the already long overdue process of price adjustments.

We do not believe that very many deals have already been made. On the one hand, because in China the uncertainty about the development of the pandemic still dominates and, on the other hand, in Europe tanners have certainly created the necessary conditions to position themselves better in the next price negotiations not to have to accept prices that are considered too high. Thus, no really new price levels can be identified yet. What is certain, however, is that every deal made last week was concluded at lower prices than before. The discount was certainly based on the customer-supplier relationship. In the case of good relations, reasonable discounts will have been agreed and otherwise there will not have been too many options for the seller and no mercy from the buyer.

The kill: Nothing really changed with the kill last week either. Levels remain low, live cattle prices continue to fall marginally and with the weather slowly improving we see no reason for this to change this week.

What we expect: The next two weeks will now be a phase of new price discovery. The decisive factor will certainly be the new negotiations for May at the slaughterhouses. The market difficulties will certainly not change in the short term. The only question that remains is whether this can be reflected to a fuller extent in the slaughterhouse prices.

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