RONDA, Spain—The latest sign of Spain’s bullish economic recovery?A surge in ham prices that some are calling a bubble.
On a recent morning, José Manuel Jiménez Laguna, a pig broker, fielded calls from farmers eager to buy Iberian piglets at prices that are 40% higher than a year ago. A 50-pound, purebred Iberian piglet, which produces high-quality jamón ibérico de bellota, sells on average for around €115 ($143) vs. around €83 at the same time last year.
“The prices are astronomical!” Mr. Jiménez Laguna told a rancher over the phone while driving between farms near Ronda in southern Spain.
The Spanish economy—one of the brightest spots in Europe—has bounced back after a decadelong property boom went bust, shrinking the country’s trillion-euro economy by 8% and catapulting unemployment to 27%. Since 2013, the economy has erased those losses, and last year it surpassed its pre-crisis output.
Unemployment has fallen, though it still hovers at 17%. Private-sector salaries could rise this year for the first time in six years, notes Ignacio de la Torre, chief economist of investment bank Arcano Group in Madrid.
Luxury car salesman Felipe Carreto Berceo sold five more Ferraris and Lamborghinis—a 30% increase—last year compared with 2016. The rise in property prices in Madrid and Barcelona have emboldened some clients to splurge. “At first, we were cautious, we didn’t know if it was something temporary,” he said. “Little by little, we began to realize there was in fact an economic upturn.”
Spaniards bought 2.4 million new cars in the past two years, and spent about 30% more on eating and drinking out in 2017 vs. a trough in 2013, according to estimates from the Spanish Hostelry Association. One side effect: 2018 is expected to be the third straight year in which more restaurants open than close.
In Spain, more meals on the town mean more jamón, an omnipresent food eaten at breakfast, lunch and dinner. Legs of jamón hang ubiquitously from the ceilings of eateries throughout Spain. Those who master the art of slicing the meat into paper-thin slices are given prestigious awards. Many companies include a leg of jamón in traditional Christmas baskets for employees.
When Spain’s real-estate boom went bust, the bottom also fell out of the ham market.
Higher profits had attracted Iberian pig farmers to flood the market with more hogs and sometimes sell lower-quality ham masked as the acorn-fed, free-range variety. Allowing the pigs to graze on acorns gives the meat a special marbling and taste.
When the crisis hit, domestic demand plummeted and lenders cut off funding. Spanish pig farmers cut the number of acorn-fed pigs they slaughtered to 366,000 in 2013 from just over 900,000 in 2008.
Iberian pig farmer José Antonio Carvajal was forced to sell his animals at prices that were 50% lower than before the economy crashed, barely breaking even. He slashed his herd from 350 to fewer than 80.
“You know your product is worth more than that, but there’s no other option,” Mr. Carvajal recalled as he surveyed his 1,200-acre farm recently. Many farmers were ruined, and “some of them will never come back to the sector—they’re fearful.”
During the downturn, many farmers stopped breeding piglets and even killed sows to cut costs. Top-quality Iberian ham takes at least three years to cure, and much of the jamón ibérico currently on the market is from pigs slaughtered during the crisis.
Today, prices are rising as that limited crisis-era supply comes to market. The price of cured Iberian ham products rose more than 50% to around €30 per kilogram in the first half of 2017 vs. €19.50 in 2013, according to the most recent figures from Anice , Spain’s meat industry association. A full leg of jamón can cost €500 or more. There are no figures for the acorn-fed variety, which can be double or triple the price of other Iberian jamones.
The prices, though, haven’t deterred shoppers like María José González. “Here in Spain, if you want to give a gourmet food party, Iberian ham is a must,” says the lawyer, walking out of a high-end ham shop in Madrid’s toniest shopping district, with some slices of the acorn-fed variety. “It’s superb.”
Pork producers and buyers argue prices will remain high, helped in part by 2014 regulations intended to make it harder to mis-sell lower-quality Iberian pigs—which have been fattened on feed and are not free range—as the acorn-fed variety.
Mr. Jiménez Laguna, the pig broker, says talk of a possible bubble in the top-quality Iberian ham market is overblown: A luxury item justifies a high price tag.
The 38-year-old is so confident of demand for jamón that he agreed to buy back the piglets he’s helping sell to farmers in a couple of years when the animals are fully grown. He will slaughter them for his company, Monte Nevado , which cures and then sells the ham.
On a visit to a farm, Mr. Jiménez Laguna reaches down to pick up a handful of acorns while dozens of black Iberian pigs graze among the Holm oak trees. He shucks one and pops it in his mouth, testing it for sweetness to ensure the pigs are eating high-quality acorns.
“The acorn-fed pigs,” Mr. Jiménez Laguna says, “are the kings of the pastureland.”
Write to Jeannette Neumann at email@example.com
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