Mercedes Vega, General Director for Spain, Italy & Portugal
After seventeen weeks maintaining the highest value of the market in Spain, 2.03 €/kg, the price of live pork has been falling week by week, to 1.96 €/kg. It is still a very high value, around €2, but already downwards.
Although the weights are still high, they are also dropping. Remember that we are in summer, and the heat waves have been very strong throughout Spain. Even with that, they are high, 110.37 kg live weight.
The price of piglet with its drop in Spain and the Netherlands has been the one that has brought down the price of pig.
This shows that the price was unsustainable as the supply is not very high, but neither is the demand.
The situation is very complicated, we are at the impasse of the end of the summer and we do not know what is going to happen:
- The processing rooms can reduce production days, but as soon as the vacation season is over they have to go back to a minimum to be able to maintain costs. Unless there are structural reductions in their capacity to adapt to the new situation, not to the supply of pigs but to the demand for meat.
- Supply is low but demand in the EU is not likely to increase either.
- Excess meat at the price it is sold offers no incentive to freeze, forcing more to be sold fresh.
- EU domestic consumption is not pulling.
- Foreign demand is not helping.
The structural changes that the Pork Sector has undergone in Spain, with production in fewer and fewer hands and verticalized. In the EU, with a very significant decrease in production and an excess of packing plant places. This gives us a new perspective that is difficult to know what is going to happen for the rest of the year.
This post was written by Genesus