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Is there a change in trend in Spanish pork prices?

We note that the price of pork in Spain has risen from €1.02/live kg at the beginning of the year to the absolute and unforeseeable record of €1.72/live kg at the end of September. A 69% increase that, although it seems something extraordinary, seems little to farmers given the circumstances that occurred in the year, especially the increase in production costs.
Bewilderment, doubts and uncertainty are the scenario of current European pig production in its entirety. Decision-making is influenced by the effects of the war in Ukraine, we don’t know how it will evolve, everything is fear, everything is doubt. Perhaps the road leans towards ranchers having to produce what they are capable of selling.
Live pork prices have been at record highs for weeks. If nothing prevents it, it will soon begin to descend, as we have already glimpsed this week, the faster the better the environmental conditions. If the temperature and environment are right, the pigs grow very quickly and in just a few weeks we will go from a market with a shortage of live supply to a market with a long surplus.
The summer has been very long and especially hot. The supply of cattle for slaughter has been more limited than ever. Some slaughterhouses have worked only four days a week for quite some time; others have preferred to adapt and kill 20 or 25% less each day. After this period of scarcity, everyone seems to want to work hard. There is no doubt that the available slaughter capacity is more than enough, even surplus, to absorb all the pigs that can be put on the market. Slaughterhouses value killing as much as possible in order to dilute the enormous production costs.
From China, our last savior, no encouraging news is received, rather of little interest and little need to buy meat, “they are not here, nor are they expected”, consequently, the Spanish pig must seek to be as competitive as possible within Europe. It is inevitable and the conclusion is easy to reach, we must export as much as possible and more, for this the slaughterhouse needs to buy at prices in the low range of European producers, it is our only option.

So far this year we have seen how the Spanish price has been occupying the leadership in Europe, within the group of countries with significant productions and the first consequence of the leadership of the Spanish price has been the loss of the slaughterhouse. Rarely have we seen so many weeks in a row with negative margins. The year 2022 will be a bad year for everyone: for the farmer because his costs have risen dramatically, for the slaughterhouse because of the bad situation (purchase of expensive pigs, very apathetic international market) and for the processing industry because of the inability it has had to transfer the very important rises in meat in April to its final processed products. Few times -in the past- a year has been negative for all the links in the chain.
The confirmation that the South Korean authorities definitively accept the principle of regionalization when considering the effects of African swine fever was excellent news, it may bring some oxygen, but really these new contracts do not seem to be a great help either. The radical drop on September 28, a drop of 10 cents per kilo in carcass and the confirmation of another 0.10 cents on October 19, seems to confirm that, despite a supply of pigs below minimum levels, the market for meat is very tired.
In our opinion, prices will begin to fall moderately, as was shown on October 20 with a drop of €0.016/Kg live, accelerating their fall as autumn progresses. We don’t know how low it can go. It is clear and hypothetically predictable that from today to Christmas there are not enough weeks for the price of pork to reach its minimum. Everything points to the belief that, unlike in recent years, except in 2020 due to COVID 19, the minimum price for pork in the course of 2023 will occur in February or March and not in January.
God forbid, but some “gurus” in the sector suggest that the minimum price for 2023 could be between €1.30 and €1.35/kg live. This is what is presumed and the world meat market (with the permission of China, who is not expected, at least at past levels), does not give for more.

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42190 – Golmayo (Soria) - Spain
VAT. B42217943
Phone +610 44 95 10


Proyecto financiado por el Fondo Europeo de Desarrollo Regional (FEDER) de la Unión Europea y la Junta de Castilla y León, a través del Instituto para la Competitividad Empresarial de Castilla y León (ICE), con el objetivo de desarrollar la economía digital.
Expediente nº: 06/18/SO/0017
Plazo de realización: 31 de Marzo de 2023.