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Hope becomes established and predictions are confirmed: prices take a run up...

Pig price trend in the main European markets in comparison with the USA.

Pig price trend in the main European markets in comparison with the USA.

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.

Monday 3 April 2017 (5 months 23 days ago)
hienesptanhieptrpujolsokhoeun12Panos V.

The March balance is excellent. The Spanish price ends March at €1.31/kg liveweight, and rising.

Weeks go by and the slaughtering capacity is confirmed, and the abattoirs' needs exceed the current supply. We are very probably witnessing a decrease in supply caused by the stage fright in early 2016 (too many months at €0.95 or less). The uncertainties then caused slowness in the replacement of sows, and some farmers quitted.

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.

The last European rises (Spanish price rise, but all Europe rises) has caused a flagrant loss in competitiveness of our meats in the Asian markets. The USA slaughters at a record pace, Canada does not stay behind, and the scandal in Brazil does not seem to affect its exporting capacity. If this absence of orders by Southeast Asia persists, the European meat market (specially cuts) will become undoubtedly saturated.

Right now, the closeness of the Easter holidays and the good weather in the North of Europe have raised demand. It has been possible to transfer the increase in the price of pig to pork, and up to now the mid-term forecasts are excellent for the farmers.

The Easter holidays will help to recover some weight (the current average carcass weight is more than 2 kg lower than in 2016), but it is not expectable to have a pool of delayed livestock. We take for granted that by late April the price of pig will be higher than now, and that very probably it will be even higher by late May. Just like the love medal ('I love you more than yesterday but less than tomorrow')... Who would have guessed it only 14 months ago!

Raw materials do not show signs of a rise in prices: another notch to add to the predictably good income statement of 2017.

The abattoirs slaughter the available animals (slaughtering pigs that do not exist makes no sense) and adapt irremissibly to the supply. No changes in the situation are expected until Summer. Probably, June will show, brutally, that “there are not enough pigs”.

Excellent outlook for the production sector. We will have to restrain euphoria, that is always a bad adviser.

The great Sophocles (greek playwright) said: “The greatest joy is the unexpected one”.

<p>Guillem Burset</p>

Guillem Burset

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