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Booming US production is a considerable threat to EU exporters

PW ReportersBy PW ReportersJanuary 20, 20152 Mins Read
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US pig breeding numbers rose by 4% last year, increasing at their fastest rate since 1998, potentially leading to a 5-6% rise in slaughterings throughout most of 2015, according to a new analysis carried out by BPEX.

“From a European perspective, expansion in the US presents a considerable threat,” said BPEX, commenting on the latest figures from the USDA Hog Inventory.

Observing that EU exporters benefitted from the tight supply situation on the global market during 2014, BPEX said that Europe is now set to face “greater competition” from the US. This view is based on the increasing size of the US pig herd, combined with current indications that PEDv is causing considerably fewer piglet mortalities this winter then 12 months ago.

In addition, noted BPEX, the development “further down the line” of the EU/US Transatlantic Trade & Investment Partnership (TTIP) could mean more direct competition from US pork on the EU market.

“As always, the EU (and UK) industry will need to keep an eye on developments across the Atlantic,” said BPEX, pointing out that PEDv cut US slaughterings by nearly five million pigs between March and December last year, leading to a sharp rise in prices, to the enormous benefit of those producers who managed to keep their units clear of the disease.

With feed prices falling at the same time, profitability reached unprecedented levels, with some producers said to have made the equivalent of £33 for each pig sold over the summer.

“This inevitably prompted many producers to expand,” said BPEX, resulting in the sharply rising US pork production picture that EU exporters will have to contend with as the year develops.

See full BPEX analysis

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