Articles - Economy

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.

Huge supplies, increasing production and an efficient, coordinated global chain fuels low cost soybean meal, cheap feed and high profits.

The threat of ASF in Germany causes that nobody wants to keep greats stocks because of the risk that they become ‘unsaleable’. This attitude of selling at all costs has caused a collapse of meat prices in Europe.

How serious is the possibility that US corn production could undergo a substantial reduction in the coming crop year?

As of today, with 2017 almost ended, the annual Spanish pig price (arithmetic, not weighted) mean is €1.26/kg LW.

Resist, resist and resist should be the motto for the first three months of 2018.

We come to the close of a year filled with happy surprises in the hog industry. 2018 will be a year of continued growth in income for most nations throughout the world. Higher incomes bring more demand for pork.

Our prices will still fall, with slight drops, but it will fall, until reaching a point in which all the pigs that can be slaughtered will be slaughtered. The bottom price cannot be very far away…

The sentence of the title is a quote from Sheryl Sandburg, COO Facebook. Contrary to all the headline grabbing scary stuff about dictators with missiles and itchy fingers, we appear to be entering a period of wide spread global economic recovery and potential prosperity that will drive big benefits to billions of people and some very special good news for pork producers worldwide.

Spanish pig prices will still fall, but the great question is: until where? The answer is not an easy one, but we tend to think that…

While the remainder of the year will likely have challenges a little deeper than most are thinking now, it is not looking like a disaster…

September will witness a series of drops in price, like a cascade. The abattoirs demand incentives to increase the slaughterings. The limit of the fall will depend on the international context.

There is a lot of uncertainty about what will happen to the US pork export picture now that President Trump has pulled out of TPP and wants to renegotiate NAFTA.

In Spain, August 15th will mark a turning point. The supply is recovering and the price will drop. In Europe there is an oversupply. The dollar is falling and the prices of American meat are more attractive.

USA: PEDv created more fever than just in the pigs.

Very probably, the Spanish price will remain above €1.40/kg liveweight until late July, supported by the weakness of the supply and helped by the weather.

Export markets can keep profits flowing even if the industry nudges production into record territory.

In June, the Spanish price will keep on rising. The heart of the matter is how much more it will increase. If it is not possible to pass on the rise in the price of pigs to pork, all the upward trend will have to be at the expense of the abattoirs’ margin.

Continued emergence of producer owned packing is setting up a new closed market channel which may evolve its own pricing structures which take it farther and farther from the common, historical patterns.

The Spanish market has taken a rest for Easter, but the rises will go on.

Much in the summer will depend on the opening of the increased market capacity (as two major new plants swing open) and the industry reacts to it.

The prices rise in all Europe. In the last market session in March the German price has only grown by €0.07/kg carcass weight, and this conveys firmness and security all over the place.

There is a fear that President Trump’s public face to Mexico and China may result in lower export sales for the coming year.

Since late January until today, the price at Mercolleida has regained €0.066. We could say that the Spanish price is riding a powerful diesel engine that is propelling it upwards inexorably.