The Spanish price falls with a parachute

The eight last market sessions of the reference market in the Iberian peninsula have had a downward trend: the price has lost ten cents in total and has placed itself, in the last market session in August, at a price of €1.38/kg LW.

Germany dropped by 18 cents per kg of carcass in the first fortnight of July. The subsequent correction was very modest: + €0.03, and this has undergone repetition after repetition in August up to the last market session during the aforementioned month, in which it grew by €0.02 making a movement that is more symbolic than real.

The management of the Spanish drop in August (very few drops) must be described as outstanding and excellent in terms of the production short term interests. We still have to see if the massive European pig meat imports (German, Dutch and Danish) block in autumn the sales of our abattoirs to their "natural destinations".

This summer's mild weather has favoured that the carcass weights did not drop as usual, and the seasonal supply scarcity has fallen behind. Supply has recovered and the abattoirs find the pigs they wish to slaughter without difficulty.

Some of the current news regarding the European pig market:

• A French TGA (Très Grand Abattoir = Very Large Slaughterhouse) is facing serious difficulties and its future is quite uncertain. This fact disturbs and damages our most important destination market.
• Pork consumption in the European Union does not take off and the re-entry does not announce itself as proactive.
• The Russian closure is now firmer than ever.
• Japan has cooled its pork buying urge.
• North America (US and Canada) rectifies down (quickly and hurriedly) its excessive price.
• The meat stocks have grown and grown in August in the whole of the EU.

Unfortunately, all the vectors point in the same direction ➜➜➜ September will undoubtedly be a bear market month. It is still to be seen the pace that the drops will assune.

"Minimizing the damage" is always an interesting slogan: the farmer can comfort himself/herself by matching this with the low price of feed, and the abattoirs can only expect that the price of pigs lowers enough so their operating margin becomes positive again.

The novelist Gibran Khalil Gibran said: “In the heart of every winter there is a beating spring, and after every night a smiling dawn comes.”

Guillem Burset