Genesus Global Market Report EU and Spain, December 2020

Mercedes Vega, General Director for Spain, Italy & Portugal
mvega@genesus.com

We have reached the end of the year, when it started, no one could comprehend such an atypical, complicated, and uncertain year into their heads.

We started 2020 with unusual high values compared to start of 2019 that went up until the start of the pandemic in the week of March 12th.

Pig price evolution in Europe (first 3 months of 2020 compared with the same period of 2019) euro/live weight kg

Country	January 2019	March 2019	January 2020	March 2020
Spain	1.04	1.16	1.49	1.54
Germany	1.05	1.09	1.53	1.59
France	1.06	1.11	1.42	1.38
Netherlands	1.04	1.07	1.52	1.56

In my last report (six weeks ago) we were facing with situations that had added to the seasonality and which we didn´t know was going to happen:

We were talking about the second wave of Covid-19 and its restrictions throughout all EU; we now are already on our way to the third wave and have a closed Europe with various levels of restrictions for country to country. This Christmas we are not able to meet as a family and we have curfews throughout the EU
African Swine Fever – Germany continues to report cases

Average price 2020 (Week 51, euro/live weight kg)

Spain	Germany	France	Netherlands
1,35	1,25	1,24	1,21
1,10	0,92	1,08	0,91

If we look at the last 5 years average for the same four countries (graph below), it is a very different situation.

EU price evolution (6 years)

Many challenges in 2020 for pork producers including higher production costs, given the increase in raw materials. According to www.3tres3.com average feed price in the last 2 months is 280.94 euros/ton, highest mark in the last 3 years. An increase of 12.5% compared to the average price year to date and 19.4% compared to 2019.

Year to date average = 249.75 euros/Ton
2019 = 235.34 euros/Ton
2018 = 242.26 euros/Ton

In summary, uncertainty looms over the European pork industry for 2020

The price has fallen and is at rock bottom
Raw materials continue to rise
Backed-up slaughter weight pigs in Germany (there is talk of more than 700,000) implies challenges mainly for Denmark and Holland mainly and for the whole EU in general.
Exports outside the EU has become challenging for several EU member countries
Brexit – bewilderment in what is going to happen next.
Pandemic – how will continue to affect the industry?

Spain Pork Market has some positives:

Although price has fallen from the March peak by more than 28%, the year closes on a positive
Supply and demand seem to have balanced
Continued growth in exports outside the EU space, and large processing capacity availability sustain the market
If demand begins to grow, Spain will not have enough production so it will be necessary to import.

Comparison 2016-2020 price vs weight

(blue = live weight; red= price_euro/ kg live weight)

Spain’s starting point is undoubtedly one of the best compared with the other EU Member States, but in a market as globalized as ours, we are inevitably dependent on the domestic market (EU) and what happens outside it with particular reference to the global pandemic and ASF.

I can only say Happy New Year with hope for a better 2021 !

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