Spanish pork is at its lowest price in the last 5 years
Spain, the fourth-largest pork producer in the world, is having a hard time to keep up with the evolution of the global market.
The Spanish pork industry is affected by the low demand for pork products on the Chinese market and the producers are surfing around their break-even point. "The cost of production for the first six months of 2018 has been around of 1.04–1.05 €/kg average. On the packers side the profit per market hog is between 2.27 and 3.4€ average", explains Mercedes Vega, Genesus General Director for Spain, Italy & Portugal, in a market report.
Last year, Spain has reported a pig population of about 49.6 million pigs and 4.25 million tons of pork produced in the country. "The packing plants are experienced a lot of tension in the market, mainly because of changes on China’s market which have decelerated its pork demand damming the volume of stored pork. There are a lot of uncertainty about pork exports outside the EU causing these lower prices domestically. It seems like right now the packers are starting to lose money", added Mercedes Vega.
There is more demand than offer from the packing plants, since they need to cover a minimum volume in order to avoid higher loses, on the other hand, the packers are facing the frozen storages stock. On the other hand, a cool summer has pushed up the weight of slaughtered pigs, which created a strange situation in the market. At this time "Spain is at its lowest prices of the last five years and its highest live weights going to the market. The price is well below a year ago, while the liveweight is higher", observed Vega.
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