Pig sector groans and groans under Spanish pressure

Many hoped that the agreement with China on a regionalization principle would perhaps mitigate the price pressure that would undoubtedly arise. This is increasingly proving to be a vain hope. Many other countries closed their borders, and this is proving unbearable for the crowded European meat market. Those involved in the meat sector indicate that Spain is now offering cheap meat on a large scale, and that this is also impacting pig prices in Northwestern Europe, especially in countries dependent on exports. Moreover, the collapsed Spanish pig price is now putting considerable pressure on the piglet market.

Spanish pork export position under pressure
The impact of the problems on the pig market is best explained by considering the size of Spain's export position. In 2024, Spain exported over 1,3 million tons of pork to countries outside the European Union. Analysis of the destinations shows that at least around 40% (504.000 tons based on the 2024 volume) of this volume now has to be sold to other markets due to the current restrictions, and Spanish exporters are also looking around Europe. The Netherlands exported approximately 494.000 tons of pork to countries outside the European Union in 2024. Therefore, for a roughly similar volume, other buyers must now be found, and this is achieved by offering the meat to buyers at competitive prices. Moreover, the supply to these countries certainly does not consist solely of by-products. According to Eurostat figures, two-thirds of this volume concerns higher-quality (processed) frozen pork products.

Listings down
Slaughterhouses are reporting a large supply of cheap meat from Spain in countries like Poland, Italy, and Greece for several days now. These are countries where the Netherlands also sells a lot of pork. The impact on prices was therefore immediately significant on Wednesday. Dutch slaughterhouses lowered pork prices by €0,05 to €0,08 per kilogram of carcass weight. It was striking that German slaughterhouses' prices remained unchanged. It should be noted, however, that German slaughterhouses have become less export-sensitive, unlike their Dutch competitors, who have to process a much larger portion of the carcass in other countries. However, it seems unlikely that German slaughterhouses will maintain their prices in the coming weeks given the current supply pressure from the South. None of the pigs offered for sale were traded on the German online stock exchange today.

A very small ray of hope is the potential for Dutch slaughterhouses in far-flung destinations where Spain currently has gaps. However, sales to these destinations won't be achieved overnight. Establishing new channels and relationships takes time, but it could provide some long-term support for the Dutch supply chain.

The Spanish pig price fell yesterday to €1,10 per kilo liveweight. In just a few weeks, the price has dropped by around €0,25 per kilo liveweight, most of which occurred last week. Furthermore, the markups on the prices have also disappeared, according to reports in the trade. As a result, Spanish slaughterhouses are buying at least €0,30 per kilo liveweight cheaper than a few weeks ago.

Pig market is problematic
The situation on the piglet market is also uncertain and fragile. Those involved describe the sale of piglets to Spain in the coming weeks as difficult. While until recently breeders sometimes made demands regarding the last few euros in the price, this is currently no longer an issue. Finding a market and maintaining the flow of export piglets to Spain is the most important. Moreover, buyers are much more selective in choosing which piglets to accept. Piglets from breeders that are less suitable based on, for example, genetics, sex, or quality are even more difficult to sell.

This year, approximately 50.000 Dutch piglets will be shipped to Spain every week. The sales situation is not expected to improve this year, especially with the holidays and vacations approaching. Exporters are already looking ahead to next year and hope that Spanish integrations will be willing to buy more piglets once the dust has settled and the consequences for the Spanish sector are more clearly defined, albeit at a lower price. The Spanish piglet price dropped €5 per head yesterday, from €31 to €26.

It should be noted that the long-term outlook for piglet exports to Spain was already somewhat vague. Spanish pig farmers are clearly producing more of their own piglets this year, and it appears that integrations are particularly keen to have piglets for the spring months. Significantly fewer new contracts based on year-round purchases have already been signed, it is said. Insiders therefore expect that after the traditional peak in spring, piglet exports to Spain could decline somewhat. This would be the first time in years.

Meanwhile, stakeholders are eagerly searching for sales space in other countries, with particular attention to our eastern neighbors. However, barn space is also scarce here. Efforts are being made to re-arrange the piglet puzzle. Where possible, for example, efforts are being made to relocate Danish piglets to Poland, thus freeing up space in Germany for Dutch piglets. Exports to further eastern destinations are being explored, but that is proving challenging as well. Romania currently has sufficient piglets of its own, and Polish fatteners clearly prefer Danish material.