Articles - Economy

We come to the close of a year filled with happy surprises in the hog industry. 2018 will be a year of continued growth in income for most nations throughout the world. Higher incomes bring more demand for pork.

Our prices will still fall, with slight drops, but it will fall, until reaching a point in which all the pigs that can be slaughtered will be slaughtered. The bottom price cannot be very far away…

The sentence of the title is a quote from Sheryl Sandburg, COO Facebook. Contrary to all the headline grabbing scary stuff about dictators with missiles and itchy fingers, we appear to be entering a period of wide spread global economic recovery and potential prosperity that will drive big benefits to billions of people and some very special good news for pork producers worldwide.

Spanish pig prices will still fall, but the great question is: until where? The answer is not an easy one, but we tend to think that…

While the remainder of the year will likely have challenges a little deeper than most are thinking now, it is not looking like a disaster…

September will witness a series of drops in price, like a cascade. The abattoirs demand incentives to increase the slaughterings. The limit of the fall will depend on the international context.

There is a lot of uncertainty about what will happen to the US pork export picture now that President Trump has pulled out of TPP and wants to renegotiate NAFTA.

In Spain, August 15th will mark a turning point. The supply is recovering and the price will drop. In Europe there is an oversupply. The dollar is falling and the prices of American meat are more attractive.

USA: PEDv created more fever than just in the pigs.

Very probably, the Spanish price will remain above €1.40/kg liveweight until late July, supported by the weakness of the supply and helped by the weather.

Export markets can keep profits flowing even if the industry nudges production into record territory.

In June, the Spanish price will keep on rising. The heart of the matter is how much more it will increase. If it is not possible to pass on the rise in the price of pigs to pork, all the upward trend will have to be at the expense of the abattoirs’ margin.

Continued emergence of producer owned packing is setting up a new closed market channel which may evolve its own pricing structures which take it farther and farther from the common, historical patterns.

The Spanish market has taken a rest for Easter, but the rises will go on.

Much in the summer will depend on the opening of the increased market capacity (as two major new plants swing open) and the industry reacts to it.

The prices rise in all Europe. In the last market session in March the German price has only grown by €0.07/kg carcass weight, and this conveys firmness and security all over the place.

There is a fear that President Trump’s public face to Mexico and China may result in lower export sales for the coming year.

Since late January until today, the price at Mercolleida has regained €0.066. We could say that the Spanish price is riding a powerful diesel engine that is propelling it upwards inexorably.

The current mindset is to create, lean, bi-lateral trade agreements that focus on a win-win for the broadest group of constituents in each country.

Always well-informed economic operators think that the average price in 2017 will not be lower than €1.20/kg, which would not be bad at all.

2017 is setting up to be a very surprising and interesting time in the global pork industry. Everywhere around the globe where pork production is at a comparative advantage, expansion is taking place. In the US, President-elect Trump brings a completely new model of leadership…

In 2016 the slaughterings will have been 16% higher that in 2014. Production has grown, and this growth has not been penalised yet.

Both USA and Canada still have an abundance of pigs and very low prices. This great amount of pork must be taken care of, and it will no doubt be at the expense of the European pork.

The author analyzes the loss-making situation that is engulfing the US pig industry and links its future development to globalisation, which progress seems to be slowing down...