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December ends with a drop in the Spanish price by €0.037/kg LW with respect to an already low price. This year has not been bad (an average of almost €1.28/kg LW with a cheaper feed), but it is gone, and what now matters is the medium and long term.
Nothing encourages optimism. The Spanish price seems wrecked and, nevertheless (what a paradox!), it leads the European prices (they have dropedd less than in Germany). January forecasts are gloomy, and we fear that new falls are foreseeable and unavoidable. The delays due to the holidays will be a heavy burden on the market.
The possibility of the European authorities establishing a private storage operation has been considered for weeks. Important producing countries (Germany, Denmark, and even Italy, lately) have joined efforts to trigger it without success for now. If it arrived it could somehow alleviate the current problem, but we think that it would handicap an eventual improvement in spring. We think that the cure would be worse than the disease.
The sad reality still is that Russia does not purchase in Europe despite its clear meat scarcity and in spite that we are producing more, and the European pork consumption is receding little by little.
We are convinced that the administrations (Spanish and European) must take action in this matter (the pig sector crisis) urgently. As a suggestion (and at the risk of repeating the recommendations given in our last article), we must point out:
- Sponsor and promote the opening of new markets: there still are vast areas in the world where European pork does not arrive.
- Ensure that the great economic operators transfer the important drops in pork price to their selling price to the consumers in order to encourage domestic consumption.
- Establish an economic return mechanism to exportation for every kg of European pork sold to third countries (it is a much more efficient and effective mechanism than the private storage operations).
- Encourage the closure or the ending of the obsolete farming activity.
We are in Christmas. Let us focus on the peace and harmony attached to these days and let us enjoy the holidays together with our family. Let us keep the positive things of 2014, and what may come will come.
Our best wishes for a Merry Christmas and a prosperous New Year for our readers and the followers of this article.
A suitable sentence for these holidays: once, William Arthur Ward said that “Feeling gratitude and not expressing it is like wrapping a present and not giving it.”
Guillem Burset
