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We are at the end of an exceptional and strange year. Although it is true that Spain belongs to the EU and that, on paper, the EU is a single market by definition, the day-to-day reality of the swine industry seems to contradict this unitary concept.
Indeed, within the EU, each country or state has its own market mechanisms that are always governed by capitalist liberalism and, consequently, by the law of supply and demand.
Hog prices within the EU have shown various inter-state differences throughout the year. Here we present the prices equivalent to the live price in some of the most representative countries at different times of the year (Table 1).
Table 1. Prices equivalent to the live price in various European countries (€/kg live). Source: Pig333.com
| 31 Mar | 30 Jun | 30 Sep | 15 Dec | |
|---|---|---|---|---|
| Spain | 2.03 | 2.03 | 1.80 | 1.63 |
| Germany | 1.77 | 1.90 | 1.71 | 1.60 |
| Poland | 1.80 | 2.03 | 1.73 | 1.70 |
| France | 1.81 | 1.78 | 1.56 | 1.34 |
| The Netherlands | 1.77 | 1.91 | 1.73 | 1.65 |
| Belgium | 1.70 | 1.83 | 1.60 | 1.52 |
| Italy | 2.22 | 2.14 | 2.31 | 2.24 |
We believe that the following graph (Graph 1) is very illustrative: a comparison of the prices in Spain, Belgium, and the Netherlands this year 2023 (in € / kg live).
Graph 1. Evolution of the hog prices (€ kg/liveweight) in Spain, the Netherlands, and Belgium in 2023.
With the above information, it is clear that the EU is a club where, although the members are subject to the same rules and regulations, the particularities of each member state result in very notable differences in the price of pigs for slaughter. This is an indisputable fact.
Due to the extreme efficiency of Spanish slaughterhouses (cost containment, scrupulous management, very good international implementation, etc.) and the fact that they operated with negative margins during some months, it has allowed pig prices in Spain to be "at the top of the world" in 2023, as we have been reporting. The Italian price is an almost anecdotal exception as Italy is not a significant export market and slaughters only about 200,000 animals per week.
In the last 12 months there have been a number of factors that have disrupted what could be called the normality of the Spanish hog market:
- The persistence of PRRS has caused tremendous piglet mortality with the clear consequence of a transitory decrease in the herd. It seems that now the predominant strains are less aggressive and lethal, but still...
- Hog prices in China are very cheap. Chinese imports have plummeted and Spanish pork has had to look for other destinations.
- Our competitors in the world market (mainly the United States, Canada, and Brazil) have persistently enjoyed much cheaper prices, driving us out of several Asian markets.
- The war in Ukraine as well as the conflict in Israel create uncertainties to the highest degree; energy and feed prices are highly unstable and there is an eventual risk of shortages. The costs to fatten pigs (and process them) have exploded and there seems to be no turning back.
- There has been a strong herd reduction in Central European countries, which has given rise to excellent commercial opportunities for our pork.
- Two Spanish slaughterhouses have filed for bankruptcy protection.
- There is still excess slaughtering capacity; it seems that this situation will persist since the supply cannot grow accordingly.
- The Spanish business press has reported regularly and more frequently than in other years on significant movements in the industry.
The scenario remains far from normal.
Currently, pigs are arriving at the slaughterhouse larger than ever (to the point that some cuts exceed the commercial weights allowed by the market) and everything indicates that this situation will continue to be the trend.
In our opinion, a good economic summary of the Spanish pig industry could be expressed in the following statements:
- Spanish farmers' results in 2023 will be highly satisfactory (with the exception of those who have suffered severe PRRS outbreaks).
- Slaughterhouses must have had a bad year; the "black hole" from April to July caused such losses that it was impossible to compensate for them during the rest of the year.
- The manufacturer or processor continues to suffer unexpressable hardship.
It is expected that at the end of January, the Spanish price will start to rise; this is what has happened in the last seven years except for in 2023 when prices increased already at the beginning of January.
At this point, we can only congratulate ourselves for being here, as well as thank you for the interest you have shown in our articles. We are also grateful for the appreciation that some of our readers have sent us.
It's Christmas: we must be able to put aside our worries, misgivings, and anxiety and allow our spirits to be filled with tenderness and affection for those closest to us.
We wish our readers a Merry Christmas and a Happy New Year in 2024.
Guillem Burset
