This increase in price of live pigs does not follow through to the packing plants, as they are still operating at very low margins.

One of the problems is the current higher prices of pork in Germany due to a shortage of hogs in this country. Russia’s ractopamine ban in countries like Canada, Brazil and the US is making Germany a quick pork supplier to Russia. Meanwhile Spain continues to freeze its pork.

Germany is also getting momentum in Poland by sending more market hogs to this country. Poland has liquidated 108,000 sows (from 1,113,000 sows to 1,005,000 sows) over the last year. Germany is helping to satisfy Polish demand.

France has a lack of pigs which is reflected on a strong increase of 5 Euro-cents per kilo and week and 12 Euro-cents per kg carcass over the last two weeks.

Italy is also beginning to see a higher price season as was projected. Improvement in price is expected.

On the other hand the cost of feed is apparently decreasing. Grain prices are declining in international markets and everybody expects decent crops this year, it does not look bad according to forecasts.

Due to the strengthening of the euro dollar and the rise in pig prices in North America, the difference of $0.40/kg we experienced in April has been reduced to $0.10/kg, which makes more competitive European meat and meat by-products to be exported to countries like China or Viet Nam.

Ultimately we are approaching to the best time of the year for price recovery. The downside is that we still face a weak domestic market due to the financial crisis and the restrictions on export to Russia which is compensated a little bit by the strength of the German market. The fact is the warmer weather is coming very fast with a lower offering of pigs, less growth in the finishing barns and higher demand for the BBQs.