Point of view: Faced with soaring farmgate pork prices, distributors have squeezed their margins in 2022

Against a backdrop of rising pork prices and pressure on consumer prices, the latest report from the Observatoire des prix et des marges 2022 (2022 prices and margins observatory) points to a squeeze on aggregate gross margins – i.e. for all links in the chain – for cooked ham and pork meat.

The year 2022 is marked by the decapitalization of livestock in France and Europe, leading to a drop in available supply. This situation has significantly altered the equilibrium and has had an inflationary effect on the price of pork up to the point of consumption.

According to 2022 data from the Observatoire de la Formation des Prix et des Marges (OFPM) in their latest report, the average producer price of pork increased by 25.3% in 2022 over one year. Against this backdrop, the weight of the raw material in retail consumer prices has become more significant, particularly in cured meats. Generally speaking, the shock of inflation in agricultural raw materials is squeezing downstream gross margins.

For self-service cooked ham in supermarkets, the share of raw materials has risen by 7 points, reaching 35% in 2022 versus 28% in 2021. At the same time, the retail price of cooked ham rose by just 1.7% year-on-year, and the share of total gross margin aggregated over all links shrank by 7 points year-on-year (60% of retail prices in 2022 versus 67% in 2021).

Composition of the 2022 annual average retail price in supermarkets for cooked