Mercedes Vega, General Director for Spain, Italy & Portugal
We are in the midst of summer with typical seasonal temperatures, experiencing “heat waves.” Although it has been milder than expected, it is still summer, which means the heat is causing pigs to slow down, resulting in a reduced supply. Despite the gradual decline in weights over the past weeks, this week has seen a more noticeable drop. According to data from Mercolleida, the carcass weight has decreased by 940 grams and the live weight by 1 kilogram. Over the past 10 weeks, the carcass weight has lost nearly 5 kilograms, currently standing at 89.84 kg for carcass weight and 116.41 kg for live weight.
As usual, this time of year sees the lowest supply, but demand is also not high. Prices have remained stable. For eleven weeks (from the last week of March until June), prices stayed at 1.8 €/kg live weight, gradually increasing to 1.85 €/kg live weight, where they have held steady for the past four weeks.
Source Mercolleida
The piglet sector is facing some issues, not because of high prices, which have recently decreased to 54€ plus premiums for a 20 kg piglet. The pressing need for fattening spaces is causing producers to need to move pigs out rather than slow down their exit to optimize weights, as they might do at other times of the year.
Source Mercolleida
Regarding production costs, the outlook remains positive. For producers, despite the existing problems, it remains a profitable year, as we can see from SIP Consultors data.
Source SIP Consultants
It is anticipated that pig processing may increase this week, not due to higher demand, but because production needs space for piglets, and the industry accepts this higher supply to optimize costs by covering fixed expenses. At current prices, it is not economical for the industry to freeze pork.
However, consumption might slightly increase in Spain due to tourism in August.
According to data from the Ministry of Agriculture (MAPA), from January to May, 22,521,750 pigs were processed compared to 22,386,006 in the same period last year, an increase of 0.61%. The processed tonnage was 2,128,699 tons compared to 2,100,189 tons, an increase of 1.36%.
The Spanish pork sector continues to evolve compared to the rest of the EU. Spain and France have the highest prices, while Germany and northern and eastern EU countries have lower prices, with a differential of 15-20 cents/kg in live weight. Denmark is much lower. Belgium and the Netherlands are progressing with new subsidized programs for the permanent closure of farms. Production is decreasing, but they continue to offer piglets as the first farms to close are fattening farms, with sow farms following.
This trend implies that while the EU’s overall production is decreasing, Spain continues its production at current levels. Consequently, the Spanish pork sector will be crucial in supplying the EU.
