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Accelerated drop or how the waterfall becomes a cataract

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…

Monday 2 October 2017 (22 days ago)
dean.dek

September ends with the prices free falling, desperately looking for firm ground. All seems to tell that we are far from finding it.

There are lots of pigs, and it is necessary to slaughter them. In our opinion, the plentiful supply is due to several factors, among which we highlight:

  • The considerable and undeniable improvement in the prolificacy of sows.
  • The confidence of the producers in the profitability of their business: in June 2016, there was the suspicion that the year would not be disastrous and projects were relaunched. Right now, pigs and more pigs are forecasted…

No matter how much our prices have fallen in September (we started at €1.41/kg and we ended at €1.24/kg), Spain is still the outstanding leader in Europe (excluding Italy, a country with a deficit of pigs and with little importance in terms of exports). Let us compare and analyse the current prices: Spain = €1.24/kg LW; Germany €1.19; France €1.14; The Netherlands €1.17; Belgium €1.20.

The summer and its scarcity have ended, and the supply of live pigs increases in all the European countries without exception. Europe cannot consume all the pork it produces and needs to export it. Our competitors in the Asian markets (Brazil, the USA, and specially Canada) have prices that are quite lower than in the EU as a whole. It is essential that we get to export massively to the Far East. Right now, it is not possible.

Prices will still fall, but the great question is: until where? The answer is not an easy one, but we tend to think that forecasting €1.07 kg LW by the end of 2017 is not absurd. Very probably, our price will be €1.04-1.10. We shall cover this topic again in Christmas.

Right now, the accumulated slaughterings in Spain in 2017 are 99.60% of the accumulated slaughterings in 2016 at this time of year (with the significant datum that the average carcass weight is right now some 2.70 kg higher than last year on the same dates...). We shall see at the end of this year. Let us remember here that in 2016 it was 8% higher than in 2015, and that in 2015 it had been 8% better than in 2014. No other European country shows such a similar improvement at all. There must be a reason…

Whatever happens, the current year will be good or very good for the Spanish production. Whatever must come we shall see.

To conclude, an assertion made by myself: “There is a time to bloom, a time to harvest and a time to hibernate.”

Guillem Burset

<p>Guillem Burset</p>

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