This week: More than half of January has already passed, yet the year still does not appear to have gained real momentum. While deliveries and production in Europe have resumed and a certain operational routine has returned, the tone of current discussions and communications does not reflect a high level of market activity or enthusiasm. Most conversations remain focused on administrative matters.

When broader topics are addressed, they tend to revolve around challenges and problems rather than opportunities, potential, or strategic adjustments. These observations mainly apply to Europe.

There is little indication that market participants are actively seeking solutions to the current overall situation or are seriously considering adapting to changing global conditions. Instead, there is an underlying hope that conditions will eventually improve and return to former levels. This mindset currently characterises large parts of the meat industry as well as some of our peers. While such a development may materialise at some point in the future, it appears unlikely in the foreseeable term.

General uncertainty continues to weigh heavily on Europe, acting as a significant constraint on decision-making. In overseas markets, the overall sentiment remains more constructive. Decision-makers there appear less burdened by structural uncertainty and are more focused on assessing how markets and demand may evolve, and how to secure their share of future growth. However, the dominant theme in these markets continues to be raw materials pricing.

Discussions are driven less by realistic planning and more by the expectation that raw materials might become even cheaper. Success in this regard has been limited so far, but at the same time there is no strong pressure to replenish inventories. Waiting is perceived as the preferable option, rather than realistically assessing whether marginally lower input costs would materially influence business performance. This creates the risk of missing historically low raw material prices, as the current, admittedly ample, availability is implicitly treated as a permanent condition.

As a result, overall market paralysis persists. During the past week, only limited sales opportunities emerged, primarily due to the gap between customer price expectations and minimum acceptable price levels and also the moderately improved dollar exchange rate did not help close the gap. Market activity therefore remained subdued. As the Lunar New Year approaches (February 17), both sides are likely to face increasing pressure to take decisions.

The kill: Slaughter activity shows a similar pattern. Slaughter numbers have gradually returned to normal levels, and the extreme weather-related disruptions are no longer an issue. The current combination of declining milk prices and historically high prices for live cattle has, so far, not led to the anticipated effects. An increased willingness among farmers to sell dairy cattle would not have been surprising, yet this has not materialised to any meaningful extent. Likewise, low pork prices combined with relatively high beef prices have not yet resulted in noticeable shifts in consumer behaviour.

What we expect: No major new impulses are expected. If any momentum emerges, it is more likely to originate from overseas markets, while Europe is expected to remain largely in a wait-and-see mode until the end of the month. There is currently no immediate need for action. The Lineapelle trade fair in Milan is approaching, although it remains uncertain how well attended it will be. The overlap with the 2026 Winter Olympic Games, combined with limited and expensive hotel availability, has so far been a discouraging factor. Nevertheless, the fair remains the most important meeting point for the leather industry, and most market participants are therefore expected to attend. Until then, any stronger market impulses would come as a surprise. Meaningful new insights or increased market movement are unlikely to emerge before mid-February with the results of Lineapelle and the end of the New Year break in Asia.

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