Genesus Global Market Report

Spain and EU, October 2021

 

Mercedes Vega, General Director for Spain, Italy & Portugal

Oct 7, 2021

 

Fifteen days ago, Genesus was an exhibitor at FIGAN, Spain. We had the opportunity to meet again with many people withing the industry. The truth is that we had our doubts the show will be held, given the COVID related restrictions, but we were finally able to be there! Surely we have not seen the regular affluence of visitors of other editions, but it has been a wonderful reunion with the sector and the participation was much higher than we expected. Let's hope this kick-off will continue with more events becoming available.

 

As for the market, fall started with the highest weight and the lowest price of the last five years, 1.114 €/kg live weight, with an average weight of 113.26 kg. Production cost is between 1.18 and 1.22 €/kg. At this moment, after years of bonanza, producers are either at break even or have started to lose money.

 

The situation is complicated, and the horizon is not at all clear. Still Spain is in a better spot than most of struggling Europe with Germany leading the way, followed closely by the Netherlands and Belgium. Germany has been losing money for more than a year and its census is falling. With a price equivalent to 0.97 €/ kg live.

 

Time period

SPAIN

GERMANY

FRANCE

NETHERLANDS

Ave. for year 2019

up to wk 39

1,31

1,29

1,27

1,27

Ave. for year 2020

up to wk 39

1,38

1,33

1,26

1,27

Ave, for year 2021

up to wk 39

1,33

1,07

1,22

1,06

Week 39, 2021

1,15

0,97

1,13

0,95

 

Most pressing issues in Spain are:

 

·         Raw materials have skyrocketed

·         China has radically stopped buying meat and is only importing sub-products.

·         New markets are opening, but not enough to absorb the volume once exported to China.

·         Germany, although with reduced inventory, continues to invade the European meat market.

 

News coming from China, short term, a hard pill to swell, although we expect to see improvement in demand for the medium/long term.

 

Supply of hogs has increased in Spain. Farmers are rushing to get their product out the door in the face of continued price decline, which tends to moderate weight gain. Marketed hogs’ number is highest for the year. Packing plants are busy, slaughter numbers see an increase week by week. Supply has overpassed demand.

 

Domestic demand is still low, but little by little as the economy is reactivating, we all hope this will see push demand up.

 

Still, in these hard times, Spain’s production system has proved to be competitive on the global market, despite having a higher feed cost than other large producing countries. Now Spain is looking to finding new markets able to absorb the volume China was taking before. And new markets are opening outside the EU, but these are demanding higher quality meat products, which may force Spain to rethink its strategy to producing better quality pork.

 

These past two weeks we have had the opportunity to have Jim Long, Fernando Ortiz, and Spencer Long with us in Spain. We were all at Figan and then we met with various producers and processing plants from all over Spain. There is a general concern regarding the situation with China coupled with continuous feed prices increase. At least Spain is not confronting the lack of manpower problem so widespread in North America, giving us a great advantage on the global market.

 

Currently in Spain. Pietrain or Danish Boar sired pigs are taking making an important part of production In our road trip, we learned the consensus opinion of producers and processors in Spain is if the rest of the world main producing countries are making "high-quality pork", at some point Spain and the EU will have to follow the trend.

 

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