Articles - Economy

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...

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.

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.