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Prospects for 2017: an optimistic view

Always well-informed economic operators think that the average price in 2017 will not be lower than €1.20/kg, which would not be bad at all.

Tuesday 31 January 2017 (2 years 8 months 14 days ago)
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January ends with a more than symbolic rise at Mercolleida. The delayed pigs due to the Christmas holidays have been reabsorbed quickly, and the current balance between supply and demand looks very equalised. The average carcass weight is lower than a year before.

The Spanish market is becoming conscious of being the first European producer, and has managed its prices with much more common sense than Germany, the undeniable leader in terms of slaughtered pigs. There the prices have moved like a yo-yo, and here we have repeated prices again and again until this last rise by +€0.017/kg LW on Thursday, January 26th.

Many factors make us tend to be optimistic, pointing clearly to an undeniable strength of the price of Spanish pigs in 2017:

  • Piglets are very expensive in all Europe. There is an unattended demand.
  • In the north of Europe (Denmark, The Netherlands, Belgium, Germany) there has been a decrease in the pig population. Right now there is a structural deficit that makes prices have an upward trend.
  • Spanish live pigs are exported to Italy to be slaughtered: it is a constant and firm flow.
  • The exports to third countries are firm: Japan and China lead important growth.
  • Right now the price is some €0.19/kg LW higher than a year ago.
  • The price of pigs has risen in the fifth week of the year.
  • The Spanish price is the lowest among the main European producer.
  • No drastic changes are foreseen in the raw materials' market.

In 2016, the average price at Mercolleida was €1.13/kg LW. Now we are exceeding that price and the future looks clear and bright. Always well-informed economic operators think that the average price in 2017 will not be lower than €1.20/kg, which would not be bad at all.

The Spanish production grew firmly in 2015 and 2016. Remember that we have mentioned many times that in 2016 we were slaughtering 15-16% more than in 2014. The Spanish pig population has grown, as well as the slaughtering and processing capacity, keeping a kind of fragile balance. The key is to be found in the parallel growths (pig population vs processing capacity). This is the current situation.

There is no room for pessimism in early 2017. Excellent news.

The ancient Greek poet Euripides once said, regarding happiness: “Count among the blessed those that have sustained no evil for the whole day.”

Guillem Burset

<p>Guillem Burset</p>

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