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Nature is inescapable. June will not deceive

In June, the Spanish price will keep on rising. The heart of the matter is how much more it will increase. If it is not possible to pass on the rise in the price of pigs to pork, all the upward trend will have to be at the expense of the abattoirs’ margin.

Monday 29 May 2017 (1 years 27 days ago)

Since mid-March, the Spanish price exceeds the maximum price reached in 2015, and since early April, it is above the maximum price in 2016… and it is still rising. By now, there is no doubt that this year’s annual balance will be excellent, if not marvellous, for the farmers.

Denmark has slaughtered 8% less so far this year in comparison with 2016, and Germany 6% less. In northern Europe, there are less pigs and the market is tensed. In Spain we have slaughtered, up to now, 1.50% less than in 2016. The doubts generated in autumn 2015 and in winter 2016 (rock bottom prices), translated as a slowing down in the replacement of sows and as an extreme caution when planning productions. The exorbitant prices reached by piglets matches their low supply.

The aforementioned cocktail has caused that the seasonal rise in prices typical of each spring to come substantially earlier this year. This is what is happening right now. The other side of the story is to be found in the obvious difficulty in increasing the pork prices.

The Chinese market is very apathetic, and its purchases are concentrated in the USA, Canada and Brazil. It’s been weeks since Europe cannot compete with America.

In June, the Spanish price will go on rising. The heart of the matter is how much more it will increase. It seems difficult that the meat cuts (hams, loins, forelegs…) may increase their price. If it is not possible to pass on the rise in the price of pigs to pork, all the upward trend will have to be at the expense of the abattoirs’ margin. Difficult market sessions are expected, because the abattoirs know that all that they give in will be the margin that they lose.

Recently, Alimarket has published its ranking of the main Spanish abattoirs. Let us say that the top 10 slaughtered, in 2016, a total of 26,732,000 pigs, with a market quota of 56%. In 2016, the 10 main slaughterhouses grew by 10%. As the total slaughterings in Spain in 2016 have been 4% higher than in 2015, it is inferred that the whole of the rest of the abattoirs’ activity has dropped by 2.85%. Concentration is a fact, and it will increase with time.

Let us end with a quotation by Marcus Tullius Cicero: “I do not understand why the blessed looks for more happiness.”

 

<p>Guillem Burset</p>

Guillem Burset

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