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The four June market sessions in Germany have thrown the following results (€cents per kg of carcass): + 3, + 5, - 4 and - 9. Accumulated figure in June = - 5 €cents (carcass). The Netherlands and Belgium have behaved very much the same as Germany, as they are a captive market with respect to Germany.
The four June market sessions at Mercolleida (the reference market for the Spanish price) have thrown the following results (€cents per kg LW): + 2.20 + 3.10 + 0.80 and – 0.30. Accumulated figure in June = + 4.20 €cents (liveweight), the equivalent to 5.50 €cents per kg of carcass.
Germany has dropped 5 €cents in June, and Spain has risen 5.50 €cents. Upon writing these lines, the Spanish price is €0.16/kg LW higher than the German price. It seems impossible, but it is not (because it is happening), but what is really impossible is that this situation can go on.
Spain has a pork self-sufficiency level of 160% (we export 40% more than what we produce). The Spanish abattoirs, that compete fiercely with the North European slaughterhouses in all the international markets, are forced to lower the prices of their pork unless they want to risk not selling it. This causes negative results in their business activity.
The hot weather delays the supply, and the domestic tourism partially upholds the demand. These are the two specific differential factors of our market that explain its different behaviour with respect to the German one at this time of year.
Europe as a whole has much bigger stocks than usual. Europe as a whole has slaughtered 8% more pigs during the first trimester of 2015 (8%!). Europe as a whole reduces its pork consumption by between 1% and 1.50%. All seems to tell that we face a saturated and depressive market, especially by the end of summer.
France takes political measures and prioritizes French pork consumption, whilst some fanatics repeat their unacceptable assaults to foreign lorries. It seems that Germany will implement measures for the endorsement of German pork. Concern and nervousness are in the news.
Certainly, the price in Mercolleida on Thursday 18 June (€1.259/kg LW) will be the maximum in 2015. In July we will verify a constant and progressive drop in price with a limited extent (nothing to do with the German swerves).
The harsh reality is that the outlook is bleak in all Europe.
As sir Isaac Newton once said: 'If I have made valuable discoveries it has been for having patience rather for than having any other virtue.'
Guillem Burset
