Carcass weights are heavier; at their maximum level of the last five years in spite of the fact that the number of killed pigs is higher. This would indicate that the market should go down but for different aspects. The price is been steady over the last few weeks. The main reason has been the price increase in Germany, France and Denmark and also good figures in export out the European community.

The last figures published by the Spanish Department of Agriculture shows that in the first nine months of the year 3.3 per cent more hogs were to the market compared with the same period of time of the previous year. In 2011 (first 9 months) a total of 30,909,056 of hogs were killed. Last year for the same period 29,922,131 hogs went to the market between January and September of 2010. This means an increase in 2011 of pork production of 3.4 per cent in the same period of previous year with a total of 2.56 million tons.Probably the next year the liquidation of 5 per cent of sows will show a different picture.

The information known on international trade in September gives the reason for price stability. Spain export is +10 per cent compared to September, 2010; Germany pork export is +20 per cent higher, reaching its historical record for this period.

They are increasing competition to be positioned in the Global market. The USA lowering prices to compensate also the raise of the dollar in opposition to the Euro; and China reducing purchases to keep prices leveled.

There are two groups in the European Community. One group is Spain, Italy and Portugal with a weak domestic market. In this group the exporter country Spain is in a better position that Portugal and Italy that depend more on his own market. For example the loin price in Italy has been going down. The other group of the European Community is Germany, Netherlands and Denmark. These countries have different issues to deal with. They need to –urgently- get the price increase stopped up in order to be competitive on foreign markets.

The current cost of production is a little bit under the line of breakeven, but it is not a big deal for this period in the year if you compared with previous years.

Summary

In general Spain has been able to manage a steady market at the end of the year and pork producers look optimistic to get a better market in 2012. The next year will be a challenge year as well since the farms must be converted in accordance to the new European environmental and animal welfare regulations by the end of the year. This means a big chunk of money will go to design renovation and barns transformation while they would be facing reduction on production.