Read this article in:

Easter truce

Let’s hope that spring makes consumption grow. The foreign markets hesitate, and it will not be easy to sell the European surpluses.

Wednesday 28 March 2018 (1 years 8 months 14 days ago)

The upward trend in February gave place to more moderate rises in March and to the repetition of prices in the last three weeks in Spain. We are living a kind of Easter truce and waiting for good news in spring.

Germany (the leading market in Europe, let’s not forget it) dragged all Europe along with it in a wild and unforgettable February. Rise after rise, the price went from €1.30 to €1.55/kg carcass in a few weeks. Once this level was reached, suddenly, and without previous notice, the prices fell by €0.10/kg, placing the German price at €1.45/kg (equivalent to some €1.10/kg liveweight).

When writing this comment, the Spanish price leads the European prices. It is confirmed that the slaughterings in the first trimester of 2018 have been 5% greater than in the first trimester of 2017. As we have said sometimes before, there is an apparent paradox (we slaughter more than before, and our prices are better than those of our European competitors) that is not a paradox, but very something real.

It has not been possible to reflect the sudden and important rises in carcass price to the meat. Inevitably, the abattoirs’ margin has become affected. Right now, the German abattoirs can be (and in fact they are) very aggressive with their prices, with the abattoirs in the Iberian Peninsula having to reduce their prices to sell. Week after week, the abattoirs see (helplessly) how their margin drops.

Let’s hope that spring makes consumption grow. The foreign markets hesitate (China has the lowest pig prices in the last ten years), and it will not be easy to sell the European surpluses.

In 2017, what we already knew was confirmed: more than 50% of the pork produced in Spain was exported (for the second consecutive year). This is an irreversible fact, and in 2018, the exported percentage will increase as there is a confirmation that the slaughterings will also grow. This means that, whether we want it or not, we depend, increasingly, on what happens globally.

Right now, both the USA and Canada slaughter as ever, and they have had price drops for two consecutive months. Also, the USD is undervalued, and their exports are very competitive.

We think that the Spanish price will not reach the level of other years this summer. We think that it may not reach €1.30. The price curve in 2018 is very similar to that of 2015. If the forecasts become true we would be below that price.

It is true that after Easter there will be several weeks without holidays, and that it will be possible to slaughter all the pigs available, but if the abattoirs do not have a margin (benefit), they will logically decide that slaughtering is not attractive to them and they will restrict their activity. Let’s remember here that under favourable conditions, slaughterings in Spain reach a million heads easily.

Let’s end with a Spanish saying: “Another time will come, and who is incapable today will be able tomorrow”.

Guillem Burset

<p>Guillem Burset</p>

Related articles

Article Comments

This area is not intended to be a place to consult authors about their articles, but rather a place for open discussion among pig333.com users.
29-Mar-2018zvezdana.miskovzvezdana.miskovA wonderful article!
Leave a new Comment

Access restricted to 333 users. In order to post a comment you must be logged in.

Not a registered user of 333?sign upand access swine prices, the search engine, ...
It is fast and free
Are you registered in 333?LOGINIf you've forgotten your password we'll send it to you here