Spain in particular and Europe in general have experienced one of the hardest winter in years with an additional issue due to the extreme lack of water all over the country. We hope this is no going to be a big problem that it could be affect too much this year's crops.

Hog live Price has been going down over the last weeks of December and most of January which is usual for this time of the year. Traditionally hog prices in Spain push up a little higher around 6th to 7th week of the year. However in 2011 the prices started to increase a little bit before these weeks. This year the prices have been steady which is not normal because of higher pork available, but packing plants are freezing pork and store it up for the months ahead when the price will be higher.

Pork primal cuts are receiving a lot of pressure on decreasing value. Also Spaniards are having a hard time selling hams for this time of the year. The good news is that the amount of market hogs is lower helping prices.

In Italy for example the breakeven will arrive later for the national swine industry, meanwhile in other European countries with more activity on international markets, like Denmark price goes much better. In fact, just last week Denmark reinitiated selling pork to Russia.

Korea keeps the demand of belly at its maximum point and it is expected that China will continue pushing for more pork over the next months. There are concerns in Europe about how to satisfy demand from countries like Korea or China. Is USA, Brazil or EU prepared for even a higher demand? On the other hand the exchange rate between Euro and American Dollar is helping Europeans to go a little further in international markets. But also a weaker Euro makes cost of production even higher here in Europe because grains (soybean specially) and fuels are more expensive.

The International Monetary Fund IMF has released a new document showing no growth for Spain’s economy over the next 2 years. On top of that new environmental and animal welfare regulations are ready to take place in the country. Currently about 30 per cent to 40 per cent of pig farms meet 2013 standards.

At the beginning of 2011 a lot of clouds were on the horizon for pork producers. At the end the reality showed different results. If is fair to say it was not a brilliant year in terms of profits, neither was a nasty year. Most of people had breakeven and some made some profits. There are a lot of hopes for getting better margins on the industry for the period to come.