Articles - Economy

It has been years since we last saw such a risky price and situation.

The European market is saturated with pork since late summer. The WHO's report has been an ice-cold shower for the whole of the European pig sector.

The only prospect for growth in both the EU and the US is increasing net export sales. We are at an interesting cross-roads about which pork producing nation or group of nations will capture that opportunity.

We think that in October the price will still fall in Spain. A correction for the alignment with our neighbours is prevailing.

US pork industry is enjoying the lowest feed costs in quite some time. A significant number of new hogs to be raised in the U.S. is expected. Will the production arrive ahead of the new slaughter capacity?

The Spanish price can only fall, and it will inevitably drop week after week in September.

Pig farming in Ukraine is developing lively. The market deficit lowers the entry barriers that are almost absent.

We can assure Pope Francis that neither of the two big regional trade agreements will result in “unfettered capitalism” but the one between the US and EU could result in the US having more than two kinds of cheese, (currently yellow and white)

The heat has brought about a drop by more than 2 kg/carcass in July. This has not caused an increase in the price, as the Spanish price is the highest in Europe, and pork price is very low.

The harsh reality is that the outlook is bleak in all Europe.

COOL story can be summarized as “Be careful what you wish for, you might actually get it”.

Although the European exports have behaved well so far this year (the Russian embargo has been compensated), this is not enough: the weather has not favoured the BBQs in Germany and it is still too early for the summer pork consumption in the south European coasts.

Big news in US as Seaboard and Triumph Foods announce plans to build and operate a large-scale packing plant in Sioux City. One of the things which this move signals is the further coordination of the production sector with consumer demand.

April has gone by with a surprising change in the trend of several European markets.

Everyone in the United States is waiting for the return of the seasonal pattern and the prospect of prices breaking out of this extended period of flat-lining which has gone on for almost two months now.

Guillem Burset comments on various current affairs of the European pig market: stocks and private storage, merger of Tican and Danish Crown, prospects on the price recovery…

Unfortunately, it looks like the ground hog of pork price forecasts saw a long shadow when it emerged in late February and the tiny bubble of hope that the already late-to-end seasonal lows of winter were over was put on hold.

The prices recover both in northern and southern Europe.

Export markets may not be as robust as forecast by USDA due to very slow economic growth and actual recession in many countries. Add to that the massive value increase of the dollar versus its chief competitive currencies as the cost of oil plummeted…

In February, the price should improve, slightly and with difficulty, but it should ameliorate.

We think that administrations must take urgent actions regarding the crisis in the pig sector.

USA breeding herd expansion seems inevitable.

In our sector we know well that if Germany sneezes the whole of Europe catches a cold. Last Wednesday the prices dropped by €0.04 in Germany…

Just like the emergent molten lava from Mount Kilauea, so an historical metric of the US hog industry, having lay dormant for many years, is creeping ever so slowly over its profit destroying "trigger" level. That metric is the hog corn ratio.