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On April 14th, the Mercolleida market session in Spain ended with a slight rise by €0.002/kg LW. Only 12 weeks have passed, and the modest €0.002 have become €0.35: from €0.95 by mid April to €1.30 now.
Spain has undergone 12 continuous weeks of rises to reach an increase by €0.35 (an average of €0.029 per week), in an unusual and unprecedented growth without interruption. Rise after rise, we have exceeded the maximum price in 2015 (€1.26 in June and July), carrying the average from the beginning of 2016 to €1.03/kg LW and the year-on-year average to €1.07. The Spanish price is already higher than the German price, and this is something normal in this time of year. The situation is nothing to shout about, but all seems to tell that 2016 will end much better than we thought.
So far this year, and according to the sampling in Mercolleida, Spain has slaughtered 8.80% more pigs than in 2015. If we compare 2015 with 2014, in 2015 8% more pigs than in 2014 were slaughtered. It is paradoxical that with increases by 8% and 8.80% in slaughterings Spain has the best price in Europe now. There are more pigs and slaughterings than ever, and the price is the highest in Europe. Is there a better offer? One day we will explain the reasons of this apparent contradiction.
In this first semester, the EU has exported record amounts of meat to Asian third countries, especially China, and also Japan, South Korea and The Philippines. This important flow of exports has drained the stocks and has made the European prices grow. This is the ultimate reason for the current prices.
The slaughterings in the rest of the EU countries drop: Denmark and Germany have announced decreases in their activity from January and up to now. Actually, from all the European countries with a relevant activity in the pig sector, the only country in which slaughterings are growing is Spain.
July has started and the weather will help. There will be no excess of pigs for slaughtering, and this guarantees that the price will keep as now. We think that the upward trend has ended. No sudden downward trends are expected in July nor August.
We started 2016 with rock bottom prices that went on for weeks. The globalisation (exports to Asia) has allowed us to climb out of the hole. Let us be thankful for that.
The great German philosopher Arthur Schopenhauer said: "The most sublime, varied and long-lasting joys are the spiritual ones."
Guillem Burset
