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April gives reasons for optimism, and May should confirm it

The Spanish price will rise until well into summer, and the range of the rise will depend on Europe.

Friday 2 May 2014 (4 years 7 months 13 days ago)
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Easter holidays and the First of May (Labour Day) have caused three consecutive weeks with a reduced activity. Even though, the price has remained the same (Thursday 24th April) and the supply hardly satisfied the demand in Spain.

The end of March and the beginning of April repositioned the price to a higher level, anticipating that summer will be more favourable than winter.

In Spain, the installed slaughtering (and butchering) capacity has been growing and growing in the last years. The closures or the stoppage of the activity of small or medium companies has been compensated by far with the expansions (in some cases great expansions) of already existing plants or the remodelling of plants that were not being used.

The Spanish situation is, in effect, peculiar: our market is increasingly interconnected with the whole of the world (and due to this it is subject to external factors), while originating and creating its own dynamics. The abattoirs have grown, and due to this they suffer while fighting for their supply of pigs. This is today's reality.

We could say that good times are coming. In Germany, a great percentage of the consumers are awaiting to enjoy barbeques (they are unthinkable in winter, and the consumers are awaiting, anxiously, the weather improvement); and the world market, especially the Far East, is very excited with the lack of pigs in America due to the porcine epidemic diarrhoea. Russia remains closed for Europe, and it seems that this situation will remain so for long.

The prices in US and Canada have dropped from the record levels registered a month ago, but still are at very high levels. We think that the worst is still to come in these markets, because the majority of the lost piglets would have not reached their theoretical slaughter age.

The Spanish price will rise until well into the summer, and the amount of the growth will depend on Europe, but the seasonal price increase will be there as always. If the current optimism is confirmed with respect to the harvests, there is no doubt that 2014 will be a very positive year for the farmers.

The great Aristotle said: “We are what we make day by day, so excellence is not an act, but a habit.”

Guillem Burset

Guillem Burset

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