Articles - Economy

How is the increase in global meat production, low-cost coarse grains and ASF going to affect pig production?

The almost mimetic similarity between the Spanish price curve in 2015 and 2018 ends here and now. We think that it is completely impossible that the decrease in price reaches €0.95, like then.

There is no doubt if the disease is discovered in a major piglet or pork producing/exporting country such as Denmark, Germany, Spain or the USA, the mortality it causes would be only the beginning of the woes.

The appearance of ASF in Belgium has entailed a real blow for the EU pig sector.

Right now it all depends on the evolution of the situation in China.

As a producer, aligning with a packer-processor that is exhibiting the characteristics of a long-term successful and resilient player with access to the global market is critical for success regardless of how efficient you have become as a producer.

In Iberia, pig prices have reached this year’s peak. Now, prices can only drop… The evolution of prices is very similar to that in 2015.

7% drop in belly price in a single day is signaling the end of the summer seasonal prices.

Which of the two views is more appropriate for understanding the ins and outs of the global pig market?

There was a time when pig price was determined by seasonal patterns and total production… Now the belly price is driving the carcass price in the United States.

Every week a new price is set that reflects a momentary and unstable but necessary and essential balance.

Being a high performing farm is not a sufficient condition to future success.

Europe has a surplus and needs to export. The USA has increased its production and needs to export. The Russian market is closed for Brazil, and Brazil needs to export…

The impact of Chinese tariffs on US pork, the pork exports picture, feed costs forecast and more...

Let’s hope that spring makes consumption grow. The foreign markets hesitate, and it will not be easy to sell the European surpluses.

Total forecasted average profitability for the year has eroded some, from about $25/head to around $12/head in the US.

The structural deficit of pigs in Germany and the latent ASF threat have caused an important increase in prices that has dragged all the European markets.

Huge supplies, increasing production and an efficient, coordinated global chain fuels low cost soybean meal, cheap feed and high profits.

The threat of ASF in Germany causes that nobody wants to keep greats stocks because of the risk that they become ‘unsaleable’. This attitude of selling at all costs has caused a collapse of meat prices in Europe.

How serious is the possibility that US corn production could undergo a substantial reduction in the coming crop year?

As of today, with 2017 almost ended, the annual Spanish pig price (arithmetic, not weighted) mean is €1.26/kg LW.

Resist, resist and resist should be the motto for the first three months of 2018.

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…