After the Christmas holidays, Spanish market has resisted better than other years. Pigs have beaten average carcass weight records and, nevertheless, the price has not shown a downward trend as normally happened after the Christmas holidays.
January has ended with a slight increase by €0.004/kg LW: a small but very significant variation. The price in Germany has remained the same for weeks, and it is not changing because the operators have seen that the meat market is stagnated with an oversupply from everywhere. The rise in the Spanish price in the last market session in January must be interpreted more than anything else like a statement of intent. It is significant that the Spanish market is the first one in Europe to have an upward trend, paving the way (this time without waiting for Germany).
There are many pigs, all are being slaughtered and efforts are being carried out to try to sell the pork or find a market for it. The ASF threat doesn't disappear and it hangs, like the sword of Damochles, above all the European sector.
In the People's Republic of China, ASF is growing, and it is completely out of control. Undoubtedly, this will have obvious consequences in all the world, including our markets (EU, Spain). We think that the Chinese consumer will continue consuming pork, but prioritising the imported pork. Something similar happened a few years ago due to the adulterated formula milk scandal. If this hypothesis becomes a reality, we can expect a great Chinese demand for pork in the medium term.
We are starting 2019 with a price above €1.00. We are expecting a great Chinese demand for pork. The opening of a new mega-abattoir in the region of Aragon (Spain) has been announced... All seems to tell that 2019 will be a positive (or extremely positive) year for the farmers.
The relationship between the farmer and the abattoir, daily and passionate most of the time, ends up creating a bond. The emergence of a new operator that suddenly seems that will be the greatest in Spain threatens to upset many of these bonds. Their quality will, undoubtedly. be put to the test.
Since, in some cases, even the bond between parents and children ends up breaking, it is not difficult to guess that many of the current farmer-abattoir relationships will suffer and that some of them will break. The stress due to the sudden increase in demand will bring undesired consequences.
We have just ended 2018 with 6% more slaughterings than in 2017. We will also grow in 2019 (we still have to define how much, but we will grow). We sense that it will not be a good year for the abattoirs, but on the other hand, the farmers will probably obtain very good results.
Every year is different. 2019 will be marked by the opening of the new Aragonese abattoir, and probably by other things.
Omar Jayam, an 11th century Persian mathematician and poet, wrote: “Because you ignore what tomorrow has set aside for you, you can give yourself permission to be happy today.”