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The steady and clear upward trend in the weeks leading up to Holy Week came to an abrupt halt with the arrival of Easter and the associated holidays. Spain's benchmark market (Mercolleida) has seen five consecutive weeks with prices stuck at €1.27/kg live, well below the current cost price.
Across the EU, pig prices have remained stable for most of April; pork is plentiful, and the usual springtime drivers of consumption (the traditional barbecues in Central Europe) have not yet made an appearance. The European market is well-supplied with pork, and prices are unlikely to rise for the time being.
All market participants are sure that, starting right now, the supply of live pigs in Spain will be short. We are in for some tense market sessions: each of the two groups (livestock farmers versus slaughterhouses) will staunchly defend their positions.
If prices in Germany do not fall, the price of live pigs in Spain will rise in the coming weeks. This is undeniable and absolutely certain. The pace of the increases will depend on several factors:
- How pork behaves: For now, there is an abundance of pork, and major European buyers do not need to raise prices to secure their supplies.
- The maintenance of export trade flows.
- Slaughterhouses’ operating margins: As long as demand remains positive, the demand for pigs for slaughter will stay high. If pork prices don’t rise… the industry’s margins will quickly evaporate.
- Actual supply of live pigs: the renewed virulence of PRRS and the drop in piglet imports due to the uncertainty caused by African swine fever (ASF) will have a clear impact on the number of hogs presented for slaughter each week. A significant shortage is on the horizon.
The presence of ASF in Spain has had (and continues to have) a significant impact on the EU as a whole. Let’s remember that one in four pigs in the European Union is Spanish. Deprived of some of their key export markets, Spanish slaughterhouses have been forced to sell more pork within the EU. The pork market across Europe has been oversupplied and awash with pork since December. It will be incredibly difficult for pork prices to rise significantly.
Since ASF was detected in Spain, pork prices have been below cost. We remain in this situation, and the future for the Spanish pig farming industry looks bleak. We’ve had our heads underwater for five months now, and that’s a long time. We believe that as the weeks go by, the price will reach and may even exceed the cost of producing a pig; we’ll have to see where the annual average ends up, although everything indicates it will be modest, well below cost.
The year 2026 will be a difficult one for Spanish livestock farmers; the main focus will be on the fight against ASF (to eradicate it once again, just as was done more than 35 years ago). With the burden of ASF, things are and will continue to be more difficult. Let us hope and pray that the Spanish authorities act wisely and achieve this long-awaited goal.
Things have happened on the world stage in April.
- The United States continues to have firm prices (at the level of Spanish prices—which is high for that market) and a strong domestic market.
- In Brazil, prices have lost a third of their value over the past three months: they are currently trading at around €1.01-€1.03/kg live. Its exports continue to grow year after year
- China is grappling with a significant domestic oversupply. The government has instructed major pig producers to reduce their sow herds. However, the process is slow for now, and the supply of pigs for slaughter remains very high. Its need for imported pork has been declining. The rest of the world is feeling the impact.
- The Philippines and Japan remain closed to Spanish pork, and the sector is feeling the absence of these two markets.
At the global level, we want to highlight that Russia is emerging as the great “dark horse” on the world stage. Despite the presence of ASF in its territory, production has grown relentlessly (more than doubling from 2018 to today). Russia also has much closer political ties with China (the world’s largest customer) than the EU, and they are geographic neighbors...
In Spain, the current focus is on ASF. Until free-status is regained, the market will continue to be shaped by this factor. No effort devoted to its eradication is too great.
It’s time to hold firm and endure.
We’ll close today with a quote from the legendary and unforgettable Michael Jordan: “Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it, or work around it.”
Guillem Burset
