Spain

South Europe's pork market shows small gains for producers, losses for packers

Pork

The industry wants to stop the losses’ while the producer tries to prevent future losses, but in fact, the whole industry is facing a balanced supply and demand.

Posted on Sep 14 ,09:44

Pig prices in Spain, Portugal and Italy are below those encountered in the last two years and the phenomenon can be easily explained by a balanced supply and demand situation, believes Mercedes Vega, Genesus General Director for Spain, Italy and Portugal.
In the latest market report, Vega explains the smouldering conflict that it has opposed the Spanish producers and the packers in the last months.
"Currently the packers are losing money, while the producers are earning around € 19 per pig, if we take as a reference the cost of production from the first semester of 1.05 to 1.1 € / kg liveweight. In addition to this situation, we must acknowledge that this year supply and demand is more or less balanced. Unlike other summers, the sales of hogs have been relatively even: the weight has been compensated with the higher number of pigs slaughtered.
All this has led to a non-agreement between the Mercolleida Market’s participants, pig producers and packers. They had to resort to the Governing Board in order to arbitrate the price reference. The industry wants to stop the losses’ while the producer tries to prevent future losses, but in fact, the whole industry is facing a balanced supply and demand", shows the report.
At this moment, Spanish pig prices are almost to the level of 2015 but producers are compensating through hog weights that are higher than those recorded in the last five years. The actual market price is € 1,225 / kg live, against € 1,389 / kg in 2017 and average slaughter weight is at 106.09 kg compared to 105.45 kg in 2017 and 103.2 kg in 2015.

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