Market report 04.03.2022
Osterhorn, Friday, 04.03.2022
The US $ in EURO 1,0910
What happened this week
It is really very difficult to write something sensible about our market in these times. The hope that everyone probably had last Friday that the invasion of Ukraine would only be a very short-term nightmare has evaporated a week later. There are no signs at all of de-escalation and, on the contrary, the risk of it spreading remains high. Of course, it always takes a few days for the systems to adapt to changed situations and due to the conditions changing almost daily with the corresponding political decisions on sanctions, it is also hardly possible to react appropriately and quickly in the long supply chains. However, two things can already be determined with certainty. Firstly, for many companies, sales and revenues in Russia and Ukraine will be lost for a longer period of time. Secondly, many companies and the markets lack raw material and component supplies. Both are certain to have a negative impact on business activities in this part of the world in the near future. Psychologically understandable is the attempt to first analyse the situation with a certain calmness and thus to have an appeasing effect on customers and suppliers. Nevertheless, this of course does not change the expected realities for the coming months. However, it is also true that ignorance and uncertainty also lead to speculation and unfounded assumptions. At the moment we
see massively increased energy costs and a meanwhile clearly fallen EURO exchange rate in addition to the sales and procurement problems. It should also be borne in mind that even a hopefully quick end to the war would hardly lead to an equally quick end to the sanctions measures, and that we must still reckon with a large number of refugees for the time being. In short, the world in Europe will look very different for some time to come than it did 10 days ago, and certainly not more consumer-friendly. Of course, this is still a very European description of the situation. In other regions of the world, war is being observed, but it does not affect the economy and social life. Business this week was affected accordingly by the events. Basically, activity decreased from day to day and fortunately most of the deals for the next few weeks had already been done. We also received very little interest from Asia. The war has obviously – and this is more than understandable – put everyone in a wait-and-see position for the time being. In any case, it can be said that there were no panic reactions in which either current contracts were cancelled or additional raw material was frantically secured. Our sales this week are thus almost exclusively limited to small volumes for the various niche markets and niche products within Europe.
The kill hardly changed this week. We continue to move at the stable low level which is not unusual for this time of year. The week of carnival did the rest. However, the situation is becoming more and more complicated here as well, because the increase in prices for live cattle is making it more difficult every day for the slaughterhouses to calculate. Resistance from food retailers to higher prices is strong and higher levels are not yet easy to push through to consumers.
What do we expect
The slaughter industry and the leather industry each paint a completely different picture with regard to the impact of the war in Ukraine on the commodity market. We still think it is clearly premature to make forecasts, but in principle we believe that the risks of a decline in demand clearly outweigh the risks of shortage, at least in Europe.
|Type||Weight range||Avg. green weight||Salted weight||Avg. weight salted||Price per kg
|Ox | Heifers||15/24,5 kg||22,0/23,5 kg||13/22 kg||20/21 kg||€ 1,25||Stable|
|25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 1,00||Stable|
|Dairy cows||15/24,5 kg||22,5/23,5 kg||13/22 kg||20/21 kg||€ 0,90||Stable|
|25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 0,88||Stable|
|30/+ kg||33,5/35,5 kg||27/+ kg||29/31 kg||€ 0,80||Stable|
|Bulls||25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 1,20||Stable|
|30/39,5 kg||36,0/37,0 kg||24/34 kg||31/33 kg||€ 1,55||Stable|
|40/+ kg||45,0/48,0 kg||34/+ kg||38/40 kg||€ 1,50||Stable|
|Thirds||15/+ kg||25,0/27,5 kg||13/+ kg||24/26 kg||€ 0,60||Stable|
|Thirds bulls||30/+ kg||38,0/40,0 kg||24/+ kg||33/36 kg||€ 0,60||Stable|