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Sudden rise in prices in Germany

The structural deficit of pigs in Germany and the latent ASF threat have caused an important increase in prices that has dragged all the European markets.

Tuesday 27 February 2018 (9 months 15 days ago)
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The structural deficit of pigs in Germany has appeared sharply this February. In fact, in four weeks, the German price has increase by €0.20/kg carcass weight (let’s repeat it: €0.20/kg carcass weight in only four weeks!). The decrease in the pig census, as well as the latent ASF threat (detected in neighbouring countries) has caused a kind of a “shortage panic” that has provoked this drastic upward price correction.

This sudden rise in prices has dragged all the European markets, without exception. In the Spanish market we have seen how the price has risen by €0.12/kg LW (equivalent to almost €0.16/kg carcass weight) in the last four market sessions.

Spain has slaughtered at full speed in February, and the average carcass weights remain, stubbornly, more than 2 kg heavier than a year ago. Anyhow, the slaughtering capacity has grown spectacularly, and this has been more than enough to absorb the Christmas delays and the growth that we are seeing in the livestock census.

So far this year, the slaughterings are 5% higher than last year. We are growing in terms of volume and the price rises. What else could we ask for?

We think that it will be impossible to keep up with the frenetic pace of the rises in price. Meat has risen in value, but at a lower pace than that of carcasses: the abattoir’s margin has been strongly affected, and if it disappears, the “will to slaughter” will vanish. As always, the market will impose its law.

In Europe, meat has risen in value. In the Asian markets, no noticeable changes are seen for now. As always, if pig prices increase it will be necessary that pork prices follow suit. It is too early to be able to sense what the summer will bring us.

In February, the Spanish price has risen by 12%. All seems to tell that 2018 will be a good year (once more) for production. Easter is near, and after Easter Monday the market will “smell” of spring again… and the trade will be more cheerful.

Week after week, month after month, Spain confirms that the spectacular growth of its pig census is not temporary, and that it is not a mirage. Let us be pleased, because the professionality of the sector has allowed us to climb to the third place in the world regarding pig production, only beaten by China and the USA.

Let us end with a saying by the great Confucius: “Our greatest glory is not in never falling, but in rising every time we fall.”

Guillem Burset

<p>Guillem Burset</p>

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