1
The possibility of a strike due to a lack of agreement on renewing the collective bargaining agreement has taken over the news from the Spanish swine industry. This is why we are publishing our monthly commentary early.
At present, the situation is as follows: if there is no agreement at the negotiating table (the date of which is yet to be determined), the workers will go on strike on November 25 and 26 and on the working days between December 3 and 8.
From the perspective of livestock farming, a strike of this magnitude (affecting all of Spain and lasting a week) would be more than catastrophic. Lately, in Spain we have been slaughtering about 1,200,000 head of pigs during whole weeks. Stopping slaughterhouses for a week would mean the creation of a backlog of, at the very least, one million animals about to be slaughtered. In Spain, December 6 and 8 are public holidays, and this long weekend always creates difficulties, but it is one thing to lose two days of slaughter and quite another to lose an entire week. And with the Christmas holidays in sight, no less!
A stopper of this magnitude is anything but trivial. Nor neutral. Nor would it leave the market indifferent. If the strike were to be carried out, the pig price would sink to historic lows. It would be a real blow to Spanish pork production, which has already been hit hard enough in recent months.
Let's cross our fingers and hope that those who discuss at the sectorial table (unionists and employers) have enough intelligence and know-how to resolve their differences without walking away. Let us appeal to the responsibility of the negotiators and trust that, in the end, there will be an agreement.
Spanish farmers are innocent in this battle and should not suffer the negative consequences of situations and circumstances in which they have not directly been involved.
Let us repeat here: a backlog of 1,200,000 pigs is neither trivial nor neutral.
The market
As far as the market itself is concerned, we have to say that we are in a kind of vast and undefined no man's land. The declines have managed to halt and we are living deep in the valley waiting for a reaction. The possibility of a strike permeates everything and it is not easy to remain calm.
We will try to provide fragments or glimpses of a global vision, with light touches of optimism:
- In China, the pig price has clearly chosen the upward path, with very significant increases over a few days (low prices caused farmers to abandon production; the current reaction seems to be firm). Let's hope that purchases in Europe will not take long.
- From all over Europe we are hearing news of massive slaughterings of piglets; these pigs will be missed in the first months of 2022. This lack will probably induce the first bullish reaction.
- In the last two weeks, slight and modest price increases have been detected for some pieces of meat. Christmas is approaching and the industry is already assuming that pork prices will not fall any further.
- Sow slaughterhouses across the EU are reporting historical records of activity: this would be the tangible proof that herd reduction is a reality. And it is not stopping. We have already commented in previous articles that the reduction of the European herd was necessary and essential to overcome the current situation.
- China's buying apathy has forced slaughterhouses to seriously look into other markets. We are receiving news of significant sales to Mexico and other Latin American countries. This is an excellent development.
- In our conversations with significant players in the industry (livestock farmers, slaughterhouses), we did not detect any defeatism; on the contrary, we sensed determination to persist and persevere. A proactive attitude, in a word. We believe this is a good thing.
Looking to the near future, everything depends on whether or not the strike takes place. Looking to the past, we must reflect on the 21 consecutive weeks that we have seen - to date - relentless declines. Never before have we known such a persistent and significant drop. No less than 53 euro cents in total.
It seems that now the homework has been done: our price has abandoned all pretensions of singularity (circumstances have determined this) and has positioned itself in a way that is consistent with other EU markets. As for the rest, what is to come will come; as in the past, there are many factors at play and the dice are in the air. Before Christmas, the near future should be much clearer than it is now. We will try to understand and report it.
Stephen Hawking said that "those who assert that everything is predestined and that we can change nothing about it still look both ways before they cross the road” (attitude can change things).
Guillem Burset
