Feeder pig prices in Spain have dropped by 50%
In just two months, feeder pig prices in Spain have plunged from €70.50 /head to €35/head, losing 50% in value. "We cannot ignore the fact that we started from a remarkably high price, the situation is complicated but not disastrous for the vast majority. Even so, the producer who bought piglets above €100 (Mercolleida price plus the premium), will lose money.
The market weight increased; it is at 117.11 kg compared to 112.53 kg a year ago (90.90 kg compared to 87.34 kg carcass weight). This increase in weight obviously helps in lowering the price, but what has influenced was the international export market price. More precisely, the trade situation between China and USA, and closer to home, some issues in Germany and France with packing plants because of Covid-19", commented Mercedes Vega, Genesus director for Spain, Italy and Portugal in her latest report on the market.
The prices were influenced by the lower capacities of production and plants not taking the oversupply in the last month. "To this extraordinary situation, we must add the normal abundant production months of the year considering Easter and May´s holidays. At this time of year, a year ago the packing plants increased their activity to absorb this surplus. This year they have not canceled incoming scheduled trucks, but they do not accept extra hogs. This has also influenced the drop in prices at a time of year in which we normally see a rise.
Those who have been most affected, and this crisis has caught them by surprise, have been the ones in the sector of Iberian Ham production. When its main marketing channel closed (hotels, restaurants, and coffee shops) and gatherings restricted, it has collapsed," added Mrs. Vega.
Iberian pig production represents 13.5% of total production. The sale price in the week of March 23 was at € 1,808/kg liveweight and eight weeks later is at € 1,231/kg liveweight, falling below white-pig price level of € 1,263 / kg. A drop of 32% in just 8 weeks. As a reference, the average production cost according to SIP Consultors in 2019 was 1.51€/kg liveweight pig produced for Iberian production compared to 1.07€ for white-pig production, said the report.
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