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The year 2019 comes to a close breaking records left and right. Never before have pigs reached the prices currently seen in December. Never before have so many pigs been slaughtered in Spain. Never before has there been so many Spanish slaughterhouses as there are today, with over 20,000 hogs slaughtered weekly. Never before has a newly opened slaughterhouse began its operation with the goal of slaughtering 32,000 hogs... daily! Never before have we exported as many tons as have been exported in 2019.
It's exceptional any way you look at it; this year will be remembered above all for its generosity. Never before has pig finishing reported the profits earned this year. We should keep the balance sheets, frame them (maybe in thin, silver frames?) and show them to our grandchildren, as proof that the most unexpected things can happen. There is no need to pinch ourselves, we know that this is the luxurious reality.
The year closes with a total slaughter 2% higher than last year. This growth (added to previous years' growth of 1%, 8%, 6% and 8% looking back) has been combined with an explosion in global demand as a result of out-of-control ASF in the People's Republic of China. The resulting cocktail is tantalizing: more kilos than ever before and at never before seen prices.
The Chinese market dipped down on November 7: it went from 38.71 yuan per kilo live weight to 33.38 yuan today, a drop of 14%, which is significant. However, the current price there is still more than double the highest price of 2018 (15.37 yuan in January of 2018). Right now China is busy with preparations for the Chinese New Year and has little interest in buying. It remains to be seen whether the thousands of containers of European pork in transit by sea will be purchased at the agreed upon price when everything is said and done... For the time being there is a lot of reluctance from the Chinese side. This issue is the talk of the town, now, throughout all of Europe.
Last weekend, the United States and China announced their trade agreement that eliminates, or makes as flexible as possible, tariffs on pork. The United States is the second largest producer in the world (after China) and prices there are very cheap: in fact, pork is worth half of what it is in Spain or Germany. Yes, right now it's worth half! The American factor should ease the tremendous Chinese demand somewhat, although it cannot satisfy it completely.
Currently, prices in China are shifting from "stratospherically high" to simply "very high". This was to be expected. In any case the strong Chinese demand will continue, and is not - in any way -expected to sink or drop very substantially. We will see a dip, yes; but we will maintain a good profit level for production.
Recently Pig333 published the Top 10 countdown (the ten most read articles of the year). I would like to thank the readers for making an article bearing my signature one of the ten most read articles. Sincerely, THANK YOU!
It's Christmas, a time of peace, harmony, and retreat together at home. Let us enjoy the sweetness of the moment, for there will be time in the future to overcome sorrows and difficulties. Merry Christmas and a happy New Year to all!
Guillem Burset
