COVID-19? But Spain is breaking record after record!

We have finished a very special and unusual month of October. The COVID-19 pandemic has gained great momentum and the second wave forces us to be prudent and cautious in our social behaviors, as well as to obey the orders and directives that we receive from the authorities.

The ASF and COVID-19 pandemics scourge Germany in unison. For the time being, China is not opening its market to German-sourced pork. The strategy of regionalizing the problem was not accepted by the Chinese authorities; now Germany is working on trying to convince the Chinese that since ASF is only affecting wild boar, they should allow the entry of domestic pig meat. For the moment, the Chinese authorities refuse this possibility. Weeks pass and the problem grows.

No one knows for sure how big the pool of overweight pigs is in Germany today, 1,000,000 animals?, 800,000? This serious problem will eventually be resolved, and its resolution will necessarily lead to an oversupply of pork throughout the European Union.

So far it has happened that the 110,000 or 120,000 pigs (the pork equivalent) that Germany has not been able to export weekly to China since ASF appeared in its territory correspond almost exactly to the 110,000 or 120,000 pigs that it has stopped slaughtering every week due to restrictions in slaughter plants because of COVID-19. This most curious circumstance has delayed the appearance of the real problem: excess pork. At the moment this pork is still alive and walking around on four legs.

In Spain, since July 16, the price has been anchored at 1.30 €/kg live. It dropped by 4 thousandths on September 17, another 3 on October 15, and one cent on Thursday the 22nd. This week's market is down 1.90 cents. This evolution is explained by the few disruptions (so far, let's cross our fingers) caused by COVID-19 in the Spanish processing plants and by a very high demand enhanced by the activity of the new large slaughterhouse in Binéfar. The downward shift observed is irreversible in the short term and will continue.

To all this, it is very important to point out that every week in October the historic record of weekly sacrifices has been broken (except, logically, the week with a Monday holiday, October 12). From slightly more than a million pigs slaughtered per week, we have gone on to slaughter well over a million head in the week of October 19 - 23.

As far as prices are concerned, let's look at the following table:

Source: Mercolleida
(*) Highest price in the last 5 years.

Spain has the highest price in Europe (by far and away), both currently and in terms of the average so far this year. Let's cry, but let's cry tears of joy.

Let's really let this data soak in, because it's spectacular. The restrictions imposed by COVID-19 seriously threaten consumption throughout Europe (social gatherings banned, curfews, restaurants closed...) and the future is very uncertain. What has happened so far (COVID-19 has not interfered - or interfered very little - with slaughterhouse activity) should be interpreted as a formidable exception that may end suddenly. Things are getting rough, unfortunately.

China has been sending out clear signals lately that it is slackening off, both in its demand and in the prices it is willing to pay. Let us remember that, so far this year, China has purchased 40% (40%!) of Spain's total exports.

We honestly believe that between now and Christmas Spain can expect little - or no - rejoicing in the price. Fortunately, Spain is coming from very high up. It has already experienced the joy throughout this year.

Let's end with a quote from the current World Chess Champion, Magnus Carlsen (Norway, 1990): "The number of good plays does not matter if a big mistake is coming next". Let's think. Let's think some more. Let's think deeper.

Guillem Burset