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We approach the end of the year with the sense that a strong year is drawing to a close. The price of pork has remained well above the cost price throughout the year, with decreases from the peak of 1.848 euros per kilo in July being gradual and controlled. This has allowed slaughterhouses to navigate the autumn with favourable positive margins. Industrial processors have successfully improved their margins incrementally, maximising the potential of what has been available to them.
Within the EU (our Single Market), we have witnessed a turbulent year: from Vion's announcement of its withdrawal from Germany to the major restructuring efforts by Danish Crown (including the dismissal of 500 administrative staff, among other measures), the sector has undergone a painful yet necessary restructuring of major players in certain countries.
The ongoing conflict in Ukraine, the prospect of Trump's re-election, the threat of Chinese retaliation against European tariffs on electric vehicles, the strength of Latin American production, and the current high pork prices in the US and Brazil are all key factors on the international chessboard that must not be overlooked due their potential impact on global trade. It is impossible to predict how the multitude of concurrent factors influencing a market situation will interact; at best, we can only speculate or make informed conjectures.
In Spain the market seems level. In December, slaughtering is progressing at a strong pace, and the festive season is approaching with optimism. Pig numbers will rise, yet the situation remains manageable. The current live pig price remains stable, with no indication of unexpected declines. During this week before Christmas, demand is weak, and there is a surplus of meat. It will need to be frozen, but with pork prices at their lowest of the year, this does not appear to be a cause for concern. It’s not unreasonable to expect that Germany could face an unexpected drop in January due to staffing issues in its slaughterhouses, which are limiting capacity and likely to result in a backlog of livestock after the holidays. However, if this occurs, we anticipate it will be a temporary adjustment that will be swiftly resolved.
The price of feed is rising slightly, PRRS seems to have lost much of its virulence (as we perceive it) and there are no apparent threats to the expected course of events. All indications suggest a smooth and calm start to the new year, with conditions that appear to be well under control.
Europe has scaled back its production, with Spain solidifying its position as the undisputed leader within the EU. Our most significant international competitors—the United States and Brazil—have experienced a rise in pig prices, bringing them nearly in line with European prices. This unusual alignment facilitates trade with third countries, offering advantages from every perspective.
On the surface, the market appears calm, with little news about what may be happening behind the scenes. However, there are indications of turmoil in certain areas. In Spain, livestock farmers have experienced years of prosperity, slaughterhouses are making the most of a year-end boost, and manufacturers are focused on optimising their production and costs, working toward greater efficiency.
Christmas marks the end of a comfortable year as indicated in the title of this post. Let us use this time of family relaxation to reflect on our priorities. A sincere effort at introspection is always worthwhile.
Charles Dickens, the renowned English writer of the Victorian era, once wrote about Christmas: ‘Happy, happy Christmas, that can win us back to the delusions of our childhood days, recall to the old man the pleasures of his youth, and transport the traveller back to his own fireside and quiet home!’
We wish our readers and friends a very Merry Christmas and a Happy New Year in 2025.
Guillem Burset
