EU and Spanish Pork Markets
General Director for Spain, Italy & Portugal
The price of pork continues to recover in these first months of 2017, and last week has closed at 1,310 € / kg / live.
With this value, we are already above the year 2014 on the same date (compared to the price of last year), and almost at the same level as the maximum of 2016. The rest of Europe is also around 1.3 € / Kg / live.
Every year that passes, the price changes seen by seasonality is disappearing. Domestic consumption of the EU influences its demand, but it is the demand of Asian countries that is generating a new guideline. Cold stores are empty throughout the European Union. There is much more demand than supply.
Piglet prices are increasing in the same situation. A year ago, the price of this week was € 25.50 / Piglet 20 kg Lleida Base price, of what in the real market with bonuses would be around € 34 / piglet. This year the price is € 50 / Piglet 20 kilos Lleida Base Price. Plus an average of bonds, the price is double the value of a year ago. The price of the piglet for this time of the year is in the maximum value of the last 15 years.
We are a long way from 2016, the year in which piglet producers were producing at higher costs than their selling price. At a selling price of almost double what it was doing a year ago, the demand in Spain is very high. The entire EU has a lack of piglets. Italy is looking for piglets the most and has the most expensive price.
These two facts make the sector exultant. The year 2017, although nobody could have predicted anything given the globalization in which the sector is immersed, is expected to be good for both the producer and industry.
Exports in 2017 are well under way throughout the EU. These are all Asian destinations. In January, the EU exported 344,400 tons of pork, an increase of 23.5% (+65.500 tones) compared to January 2016. It has expanded by 23% a year ago. At that time it was China that made it increase. Now, Japan has increased by 13% and South Korea with 64% more. Despite this diversification, obviously China remains the key export. In January, the EU exported 158,000 tons to China, which means an increase of 35%, which is 40,000 tones more (out of 65,000 tones in total). Shipments to China represent 46% of total European exports, as in 2016.
Every two years, during the days 28 to 31 of March we attended FIGAN 2017 (International Fair for Animal Production), which was held at the Feria de Zaragoza, in its thirteenth edition. On this occasion it hosted 929 exhibitors, of which 542 from Spain and 387 foreigners. There were about 70,000 visitors, from 40 different nationalities.
It has been a very intense and very interesting week. We had the opportunity to contact with all the sectors involved in the pig production chain. It has been really striking that the visits we received were really interested in our Duroc line and our complete “meat quality” program.
It is really interesting and surprising. Last year, there was no chance of even talking about ending with an animal that was not Pietrain. Today, some more than others, are interested in making a quality product. We have been able to hear from our visitors, customers and friends that we need to improve the end consumer experience to increase domestic consumption. In addition, being where we are with an export that exceeds 50% of production, producers must look for market niche places that go beyond the “Commodity” that is exporting today. In short, the producer is looking for a higher quality product, under the demand of the industry.
This post was written by Genesus