A ghost haunts the markets throughout Spain, and no, it is not a metaphor: MercoLleida, the main European pork market, is already registering drops of between 7 and 17% in the price of pork. It is the biggest disaster in 30 years. Unfortunately for the industry, this is just the beginning.
What is Happening?
The most immediate indicator of the crisis is the report of at least 50 wild boars killed in the Collserola mountain range. This alarming occurrence highlights the severity of the situation. African swine fever, although not a threat to humans, has mortality and morbidity levels close to 100%, capable of wiping out all pigs on a farm within days.
However, this alone does not fully explain the drastic drop in pork prices.
The Role of Fear in Price Drops
What’s driving the decline is fear—specifically, fear of swine fever. A single case of this disease can lead to widespread preventive blocking of pork exports. More than 20 countries currently refuse to accept pork imports from Spain, including Japan and Mexico, leading to an immediate export ban for Spanish pork. The situation would be even worse if Spain and China had not recently signed a regionalization agreement.
This excessive stockpile of pork is the primary reason for the price drop.
A Glimpse into Europe’s Pork Market
Even with ongoing ‘regionalization’ efforts, the sheer volume of pork that needs to be sold is staggering. Catalan farms, with over 8 million animals and nearly 3.2 billion euros in annual exports, account for 52% of Spanish international sales. Given such supply-demand dynamics, it’s hardly surprising that prices are collapsing.
The Future: A Troubling Outlook
As the situation deepens, the worst might still lie ahead. Experts are unsure if the current containment measures will successfully manage the epidemic, and the potential impact on the industry could be devastating. For context, after an infected wild boar crossed from Poland into Germany in 2020, it triggered a massive crisis that dismantled the country’s pork sector.
Current Consumer Impact
For consumers, the immediate benefits of this crisis are lower pork prices, especially amidst a backdrop of rising costs in other areas, such as chicken. Importantly, the plague does not affect human health, and as of now, no Spanish farm has been impacted by the virus.
The Uncertain Long-Term Consequences
While prices may be lower for now, the medium- and long-term implications are still unclear. If this is just a temporary blip, the industry might have some breathing room. However, if the situation deteriorates further, it’s possible that prices could skyrocket in the future. As time passes, the outlook for both consumers and producers seems increasingly precarious.
Image | Kwon Junho
In Xataka | In a country with almost as many pigs as people, the worst that can happen is that investment funds take over.