Lacklustre EU demand, combined with rising supplies could put pressure on already falling pig prices in the coming months, AHDB Pork has warned.
Consumer demand for fresh pork meat across the EU has generally continued to decline this year, although improvement has been recorded in the processed/charcuterie sector.
For fresh pork, volume sales were down year-on-year for January-August 2017 in Germany and France. The decline in sales of fresh pork was particularly severe in Germany, with volumes falling 7% year-on-year between January and August 2017. This is despite extensive advertising campaigns promoting marinated pork steaks over the summer. While declining fresh pork sales in Germany is a long term trend, higher prices may have been a factor accelerating the drop this year. Fresh pork prices were 5% above year earlier levels in the first eight months of the year.
Year to date (January-June) sales are also down on year earlier levels in Spain. However, a modest increase of just over 1% was recorded in Italy over the same time frame. This was likely related to improving economic conditions, with gross income and consumer spending reportedly increasing.
The situation for processed/charcuterie products was more positive, with the value of the market increasing across the key EU member states. While the increase in value was largely driven by higher prices, volume sales also showed some modest increase on the year in Spain (+1.5% YTD June) and Germany (+0.4% YTD Germany).
This reflects similar developments in the UK, where fresh pork sales have been declining, while ham and bacon sales have improved somewhat. Consumer trends in the UK show a shift towards convenience, to which processed pig meat products appeal; perhaps this is also influencing other EU member states.
Despite the improvement in processed pig meat sales, the continuing decline in demand of fresh pork remains a concern for the EU pig market, according to AHDB Pork.
It said: “With the latest EU census results showing some growth in the EU pig herd, the soon to be released EU Commission forecasts are likely to anticipate an increase in production in the latter part of the year. With export conditions for the EU less favourable than 2016, lacklustre domestic demand could lead to further pressure on the EU price in the short to midterm.”