A chill runs down the spine of Spanish pig producers as they verify that May is over and the price does not increase: €1.194 €/kg at the beginning of June is not a very promising price.
We all know that there are three kinds of balance: stable (any body away from its point of balance tends to recover it), indifferent (any body away from its point of balance remains stable in its new place) and unstable (any body away from its point of balance gets out of control). Well, the Spanish pig market shows us an example of unstable balance. Every week a new price is set, and it is the result of several factors (livestock supply, the abattoirs' needs, the average weight of the carcasses and their trend, the evolution of our neighbouring markets, etc.), and that weekly price reflects the momentary and unstable but necessary and essential balance (in the end, the pigs must be paid for!).
What is true is that in the five market sessions in May, there have been two repetitions and three modest rises (+ €0.008; + €0.016; + €0.014). The price doesn't quite set off, and we suspect that it will remain this way. A month ago we said that the price curve this year seemed a copy of that in 2015. Now this is more than obvious: it is a spitting image! In 2015 we reached a maximum price of €1.26 €/kg LW. We suspect that this year we won't even reach that figure.
All the pigs supplied are slaughtered. All the abattoirs have more stock than desired. The good spring weather (barbecues in Europe) has been absent. None of our international markets (clients) have a clear demand attitude. We cannot detect factors for optimism.
Whether we like it or not, we export some 60% of the pork we produce. This is not trivial at all, and makes us very dependent on what happens in the international markets. The world scene shows a global growth of supply and a certain stagnation of demand. All the predictions point towards a sustained increase in the global demand, but for the moment, production has grown beyond demand.
Inevitably, there will be a readjustment (on a European scale, at least), and there we go again.
Autumn seems bleak. We'll have to resist. This is a long-distance race and we cannot quit.
The Spanish collection of proverbs says: “Nobody can avoid what is to come”, or its equivalent “Problems will reach you, even if you weren't looking for them”.