The (transatlantic) danger does not cease
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.
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...
The USA and Canada persist in having rock bottom prices: €0.91/kg carcass, this is, 40% lower than the European prices.
The heat and the decrease in the supply in Germany have supported the Spanish pig price in September. Europe will only be able to go on with its prices if it can absorb its production and the exports to Asia keep on.
Don’t be surprised over the next decade if another one or two of the large US pork production/processing chains changes hands or gains significant new partners from another country.
The Spanish pig price chart in August has been completely flat. We are expecting a bear, but not catastrophic, trend in September.
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Sign upAlready a member?The Spanish price will still exceed €1.30/kg whilst the supply remains restricted. The battle will be held in September, and it will all depend on the foreign markets.
The success of the Brexit movement to force the exit of UK from the European Union demonstrates the limits of globalism, which for many has become a kind of euphoric synonym for innovation, increased efficiency and low cost
The exports to Asia have drained the stocks and have made all the European prices grow.
All points towards the rise in prices keeping a good pace in the first forthnight of June.
In the long term, Chinese producers will have to gain access to their own processors in order to break the information barrier which prevents precision investment in the production process.
The worst has already passed. We will have to see where our price can get to.
The bearish indicators still hang heavy over the industry and some have actually increased.
The first two or three weeks of April will be useful for absorbing the delayed pigs, and by the end of April the price will be able to rise, step by step, to more decent levels.
Will we see the predicted 2% increase in production this year that USDA is forecasting?
The headwinds to a 30% rise in carcass prices expected into the summer include a relative abundance of pork and all other meats coupled with much lower retail prices emerging in the meat case, ...
Spanish abattoirs are slaughtering at their maximum capacity, but nevertheless, several weeks will be needed (probably until late February) to reabsorb the accumulation of delayed pigs.
In order to dream of better prices we must find a bottom from where to rebound. We are very probably there, although Spanish market is, right now, heavier than the German one.
When global supplies of pork are large, as they are now, the name of the game for major production areas is growing net exports.
It has been years since we last saw such a risky price and situation.
The European market is saturated with pork since late summer. The WHO's report has been an ice-cold shower for the whole of the European pig sector.
The only prospect for growth in both the EU and the US is increasing net export sales. We are at an interesting cross-roads about which pork producing nation or group of nations will capture that opportunity.
We think that in October the price will still fall in Spain. A correction for the alignment with our neighbours is prevailing.