By late November, the Spanish price reached €0.963/kg LW. It has been years since we last saw such a risky price and situation: 15 weeks of drops that started on August 13th and that total a decrease by more than €0.29. It is a heartbreaking scenario. What is even worse is that we do not know were will we get to.
All the European markets are under pressure. The national productions have increased everywhere (during the first semester of 2015 Spain has slaughtered 7% more pigs that in the same period in 2014, and in Germany the figures have also grown), and the only solution for selling the surplus are the exports outside the EU (third countries).
The US are the second pig producers in the world. Their carcass price is currently lower than the Spanish live price. The US try to compensate their strong dollar with important decreases in their pork price in order to be able to compete in Asia and to recover their market share. Canada follows the same path.
China reduces its price week after week since September, and Brazil takes advantage of the void caused by the Russian embargo (mainly for political reasons) to Europe and North America.
The main Asian buyers (Japan, South Korea, China) are being dilettante and are waiting without deciding, knowing that week after week they get better prices.
It is likely that the European authorities will decide to start a private pork storage operation with better bonuses than the last one. All seems to tell that it will start on the first week of January. It is a sad palliative and insufficient measure, without a doubt.
All the European producers without exception are suffering losses on their farms. The situation is serious, and the European and state authorities should take this matter into their own hands. If the current crisis is not corrected we can assure that it will appear on all the front pages of the European media.
Christmas is near, and this entails the predictable delay in the slaughtering of the pigs. The average weights are already record values, and after the Christmas holidays we will see how much they have grown. The prospects are not good.
We will have to see if the New Year will help us to see when the scenario will change.
A Belgian poet called Maurice Maeterlink wrote: "Hopelessness is based on what we know, which is nothing, and hope is based on what we do not know, which is everything."