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The reconstruction of the price starts with modesty (and let us be thankful)

It seems that the price has initiated its spring rise, but many factors intervene. Whilst the Russian borders are still closed the collapse of some cuts (especially fats) will be inevitable.

Monday 3 February 2014 (4 years 10 months 12 days ago)
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January ends with the main Spanish market sending indications of a change of sign: the last two weeks accumulate a rise of €0.016 for live pigs: a clear sign that the pigs delayed and accumulated during the Christmas holidays have already been absorbed. The average weight recedes and all the pigs are easily placed.

Everything seems to point out that the price has started its spring rise (rebuilding of better positions) just like every year, although no year is the same as the previous one and everything is yet to be done. There are many factors intervening and some of them can be substantially different to those of previous years.

A few days ago, Russia forbade imports of pig meat and its derivatives from all the European Union. The cause has been an ASF outbreak in Lithuania. This urgent and unexpected decision has meant that many lorries in transit towards Russian destinations have simply had to turn back. In the case of some countries (e.g. Denmark) this has entailed more than a sudden fright... The simple mention of African Swine Fever awakens ghosts from the past, especially in the case of the elderly (we must remember that this disease was not eradicated in Spain until the end of the 1980s) due to its radical consequences.

While we wait for news, and whilst the Russian borders are still closed, the collapse will be inevitable (or we will encounter, at least, great difficulties) in the case of some cuts, especially fats.

Pigs are scarcer (or at least, the ones that were in excess are not there anymore), whilst meat is abundant. Germany accumulates rises in the price of pigs, whilst it makes important concessions with regard to the price of its hams. It seems that the abattoirs will not have other option than to resign to pay more for the pigs assuming that it will take them blood, sweat and tears make the price of meat increase.

In the European Union, the market is being supported by the Great Exportation (this is, the exports to South-East Asia), that is taking place with fluidity. Korea, Japan and China import at a sustained pace and we hope that this activity does not decline.

The fair wish of the farmer of raising the price could collide with difficulties in the meat market: this is nothing new. We will wait and we will see, as so many times before. Summer is still far away.

As Albert Einstein said: "We are all very ignorant, but not all ignorant of the same things."

Guillem Burset

Guillem Burset

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