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Optimism? Happiness? Prosperity? It is even far better than that !!!

The price of pork in Spain has risen 32% in twelve weeks. Increase in demand from China and the opening of a new slaughterhouse suggest further rises.

Tuesday 30 April 2019 (6 months 18 days ago)
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The second half of April has offered us a type of Easter truce. The accumulation of holiday days has produced a significant reduction in slaughters (both here and to the north of the Pyrenees) resulting in a price repeat Like the runner who stops to "take a breather" before continuing.

The live weight price for the last day of January was at 1.04 €/kg; at the end of April we saw that it has climbed up to 1.36 €/kg. This means a 32% increase in twelve weeks, a real "force majeure" when it came time to negotiate the new price charts.

Changes of pork prices in Spain 2009-2019 (Lleida - Live weightl)

Changes of pork prices in Spain 2009-2019 (Lleida - Live weightl)

Pigs have risen quickly and pork too, upon the European industry operating in "panic mode" sharply raising pork to guarantee its supply against competition from China. The slaughterhouses have saved their margin, unlike the processing industry which is powerless like how the Great Distribution refuses the necessary rises. If there were ever a time an exception could be made by force majeure we believe it should be now.

It was impossible to predict a 30% rise in less than three months. No sales manager would have been able to anticipate rises of such magnitude. The drama in the processing industry is that right now its bottom line is negative. It doesn't take an economist to realize that one cannot work at a loss and that this situation cannot continue.

All sources assure that China is lacking and will lack 30% of their swine herd as a result of persistent African swine fever (for now, seemingly unstoppable and present in practically the whole producing territory) This percent loss is a huge deficit; 30% of the Chinese herd is equal to more than the entire pig population of the EU combined. This is easy to say, but very difficult to imagine.

The calmness of the last weeks is only a facade. So far this year the number of pigs that have been slaughtered is almost exactly the same as last year (just 0.2 % more, to be exact) and now the average carcass weight is 450 grams lighter than last year's average for the same week... after the Easter holidays we found the increase in carcass weight to be a little over 0.5 kg. All slaughterhouses are preparing to increase the slaughter numbers but there are not more hogs available. Before the year's end, the new slaughterhouse in Binéfar (Spain) will be up and running... all these factors suggest that new rises are soon to come.

We finish April with a price repeat that surely brings serenity to all parties. Rest after the sprint, a pause to lift our spirits before facing new rises. So that's that. We will see what's to come.

In the current situation, many factors come together hand-in-hand, all positively affecting pig production including the price of feed and the global demand for meat.

As in this quote attributed to Winston Churchill: "For all your days prepare, And meet them ever alike: When you are the anvil, bear-When you are the hammer, strike (referring to Great Britain's position in World War II). Let's apply this to the current situation we are facing and let's enjoy the fair weather and prosperity while it lasts. We will weather the storms and disasters when they come.

Guillem Burset

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