SPAIN - The grain situation has created a better financial environment in Spain, but looking at the ingredients used to feed pigs in Spain, it is apparent there are still some tough times ahead, writes Fernando Ortiz, Genesus Ibero-America Business Development.
Spain is a grain importer, they don’t produce too much grain internally and a good proportion of the swine diet in Spain is made by wheat and barley. These two grains have still prices above historic standards. One of the causes for higher prices is due to the good quality of European and Black Sea wheat this year, so most of this harvest has gone for human consumption, lowering the supply for animal feed.
The same trend has seen barley following wheat price rise. As a result, the price of wheat, which used to be around US$6.75/bushel, has increased to US$8.05/bushel. Barley is around $4.02/ bushel. Soybean continues with higher prices as well, last week at US$17.32/bushel.
On the other hand there is an abundant supply of corn in the market at very competitive prices around US$6.75/bushel. Pork producers are taking advantage of this price by signing long term contracts.
The national breeding herd inventory reports almost no variation in this category with 2.23 million sows vs. 2.25 million sows in November 2012.
The pork industry is one of the pillars of Spain’s economy by participating with over 19 billion euros (around $26 billion US dollars), this is the 22 per cent of the agri-food industry in Spain. It also holds the first place among the whole food and beverage industry. It is one of the five first industries, and it has the largest share in the agriculture food processed industry in the country (14.1 per cent in 2012). This data was delivered by Miguel Arias, Spain’s Minister of Agriculture.
Hog prices in Spain had plummeted over the last few weeks from 1.533 EUR/kg in September to 1.290 EUR/kg last week.
Below is a graph showing liveweight hog prices vs. feed cost during the last year in Spain.
The following is a graphic comparison between USA hog prices and Spain hog prices for 2011, 2012 and 2013 adjusting currencies accordingly for each period of time.
As we see from this graph 2013 has been the best year for the pork industry in Spain since 2010. Record prices for hogs this summer helped producers enormously on recovering from previous losses.
Prices are now going through seasonal downturn but there is a strong trend to make some money in the next quarter with cheaper grains and hopefully higher demand.
|Genesus Global Market Report|
Prices for the week of November 18, 2013
(Liveweight a lb)
|USA (Iowa-Minnesota)||80.64 USD/lb carcass||59.67¢|
|Canada (Ontario)||156.56 CAD/kg carcass||53.73¢|
|Mexico (DF)||24.67 MXN/kg liveweight||85.46¢|
|Brazil (South Region)||3.76 BRL/kg liveweight||74.09¢|
|Russia||76 RUB/kg liveweight||$1.04|
|China||15.5 RMB/kg liveweight||$1.15|
|Spain||1.29 EUR/kg liveweight||79.63¢|
|Viet Nam||43,000 VND/kg liveweight||92.54¢|
|South Korea||4,071 KRW/kg liveweight||$1.73|
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