Recently, there have been nine consecutive weeks of falling prices in Spain, with the price dropping from the generous 2.025 to 1.803. Experts are wondering what's happening, as reported by Pig333.com.

Multiple Causes

The current market is entirely different from the one in May to July when prices were soaring. Several events have forcefully shaken the status quo, including:

1. The recent closure of two medium-sized Spanish slaughterhouses, one in Girona and the other in Valencia.
2. Many significant Spanish players anticipate the disappearance of another slaughterhouse before this year's Christmas, though this remains to be seen.
3. For several months, PRRS has been benign, and piglets are surviving the infection. Undoubtedly, more pigs are coming and will continue to be sent for slaughter. Additionally, the latest spring census showed a 4% increase in the Spanish swine population compared to the previous year and a 16% increase in pigs weighing between 20 and 49 kilograms.
4. The four months during which Spain maintained the world's highest pork prices have caused losses of millions in all Spanish slaughterhouses without exception. The consequences and repercussions are significant and severe.
5. Exports to Southeast Asia are genuinely low, and this lack of sales is being felt, with the increase in intra-EU sales not sufficient to compensate. Brazil is surprisingly aggressive with export prices.

Each of these factors is negative, from the first to the last, concerning the market. The sum of all these factors has led to this sudden market downturn. It seems like the market has made a 180-degree turn; nine consecutive weeks of consistent price drops confirm this.

We all know the importance of human psychology in market behavior, and the pig market is no exception. There is currently a thick cloud of uncertainty regarding the near future that is dampening everyone's spirits. Furthermore, we must not forget that the current price of 1.803 is the highest in history when looking back to January of this year. Keep an eye on this fact.

We are far from a panic situation. However, the short-term future is far from clear.

We believe the market is dropping in search of a competitive price level to boost exports. As we know, Spain exports over 50% of the pork it produces, and we need to export at a good pace at all times. We depend on it.

But what about the slaughterhouses?

The pig price will drop until the slaughterhouses have an attractive enough margin to stimulate their business. It must be kept in mind that in the four months from April to July, what they lost were historic weekly profits. When the slaughterhouses start processing, the price will no longer drop. We have not reached that point yet.

At the time of writing this comment, the price of pigs in Germany (equivalent to live weight according to Mercolleida) is 1.77 €/kg live. As you can see, it is cheaper than in Spain. It must be remembered that Germany remains the main market in Central Europe. Nowhere is it written that Spanish pigs should always be more expensive than German ones.

For the farmer, the "four excellent months" with unimaginable prices (reaching for the stars) have ended. Now it's time to wait and see what happens. For the slaughterhouse, it seems that the bleeding has stopped, and it has come out of the unbearable hell; we will see if it can mend its balance by the end of the year.

A Good Year for European Farmers

At the tail end of the entire chain are processors. Pork prices have fallen significantly; however, pork and pork prices have barely moved. The return of people from summer holidays has supported the pork market, in addition to the slaughter deficit in Central Europe, whose surplus pork is missed in Italy.

It seems that pork and pork prices will decrease; international market prices have no connection to European prices. Although the communication channels between the EU and the World Market are imperfect (the EU is very protective in our sector), they exist. And they will soon be felt.

We do not know where and when a firm floor for our pig prices will appear. We believe that a price around 1.65 could mark the limit, perhaps at the end of November? Let's wait and see.

Whatever happens from now until the end of the year, it will be a good or very good year for farmers. Not for slaughterhouses, as it seems impossible to recover what has been lost. Processors continue to suffer.