SPAIN - Last week I was in Spain attending some meetings with old customers and visiting new ones, Fernando Ortiz, Genesus Ibero-America Business Development.
The market is getting a second wind after a couple of years of terrible hog prices with higher feed costs. It was just around June 2012 when the market started to get some reaction over the pick of the 1.40€/kg ($0.86USD/lb.). Also over the last two years 2012 and 2013 the Spanish market has been able to keep the better prices longer, breaking records of several weeks under seasonal pressure.
My trip overlapped with the drop in prices not only in Spain but also in the whole EU. There is a huge supply of hogs, heavier ones and a kind of rush to get them killed. The good weather has helped a lot as well. Over the last four weeks prices have descended almost 13 Euro cents (17 USD cents) per kilogram liveweight (from 1.533€/kg to 1.404€/kg) ($0.94-$0.86 USD/lb.).
The European Union’s markets have similar behavior and trends due to their synchronization and dynamics. Trading among countries is very efficient and fast and pork trading is not the exception in this equation.
Below current prices from some European countries:
Spain has been the only European market able to get much higher prices this year compared with the same period a year ago. Italy has experienced the same thing but Italy is considered a market with big differences hard to associate with other members of the European Community. Italy’s slaughter weights are too high (160-176 kg) (352-388 lbs.) and this makes the market atypical. Holland, Denmark, Belgium and Poland did not hit the marks for this year. Their hog prices were lower YTD. Having said that we expect an even stronger correction in prices in Spain, considering the highest they reached this year, in order to match the other countries in the region.
The good news for this particular period of the year is that pork prices at retail level are seeing lower reflecting slaughter prices, however pork consumption in Spain is gaining some ground at the moment and the market has very fluid circulation with lower cold storage inventory.
It was interesting, from my recent trip, listening to important pork producers in this country how the demand for good quality pork is escalating the markets at faster pace. As everyone knows Spain is mostly a Pietrain country and I remember just a few years ago how anyone who talked about Durocs sounded like they were profaning a culture. That means they are turning their heads to find a breed that responds to this trend while feed efficiency continues to be an important part of the equation: Duroc was the response. There have already been trials with Genesus Duroc and they got the right product to supply the demand and obtain more profits. These observations came out not only from producers but also from major packing plants.
The market is very dynamic everywhere and always is important to be prepared with the right product your client demands. Genesus is up for the challenge!
|Genesus Global Market Report|
Prices for the week of September 30, 2013
(Liveweight a lb)
|USA (Iowa-Minnesota)||89.8 USD/lb carcass||66.45¢|
|Canada (Ontario)||179.7 CAD/kg carcass||62.78¢|
|Mexico (DF)||22.97 MXN/kg liveweight||78.98¢|
|Brazil (South Region)||3.74 BRL/kg liveweight||76.90¢|
|Russia||75.58 RUB/kg liveweight||$1.06|
|China||15.99 RMB/kg liveweight||$1.19|
|Spain||1.404 EUR/kg liveweight||86.09¢|
|Viet Nam||45000 VND/kg liveweight||96.72¢|
|South Korea||3338 KRW/g liveweight||$1.41|
TheMeatSite News Desk