Pig meat production in the EU is expected to start picking up slowly after two years of tight supplies according to the directorate general for Agriculture and Rural Development of the European Commission’s Short Term Outlook for the EU arable crops, meat and dairy markets in 2014 and 2015.
It said that following the compulsory introduction of the welfare rules for breeding sows by December 2013, the 2013 number of breeding sows was still 1.6% below 2012 at 15.2 million head. Declines in Germany (-3%), France (-3.1%), Poland (-5.6%) and Italy (-5%) were partly offset by increases in the Netherlands (+1.3%) and Denmark (+2.4%). The implementation of group housing for sows and the low profits of recent years translated in a shortfall in the number of piglets going into production, with high prices for piglets recorded at the beginning of the year, peaking at £43/head in April (9% above the 2012-13 average).
The Russian ban on EU pig meat introduced after the discovery of a few cases of African Swine Fever in wild boars close to the border with Belarus added uncertainty on the market, the report added. Against this background, pig meat production in 2014 is anticipated to increase only marginally by 0.2%, with higher supplies in Denmark and the Netherlands expected to compensate for potential drops in France, Germany and Spain. Provided that market conditions improve next year, production could recover at a slightly stronger pace in 2015 (+0.8%).
In the first four months of the year, shipments to Russia decreased by 80% compared to last year; however the strong Asian demand limited the decrease of total EU exports to 16%. The reduction in the US supply in 2014 following the PEDv outbreak has contributed to the increase in the demand for EU pig meat coming from the Asian markets (China, Japan, South Korea, Hong Kong, Singapore or Philippines).
Nevertheless, the report said, given that Russian volumes account for one third in total EU exports, the strong Asian demand is not expected to fully compensate for the sharp drop of exports towards Russia and over the whole year the EU exports are expected to fall for the first time in several years (-7% compared to 2013). Given the uncertainty related to trade developments with Russia, EU exports of pig meat are currently estimated to recover only marginally in 2015. Without agreement of Russia on the regionalisation system implemented by the EU, EU pig meat exports might be further affected.
The EC report saud there’s currently a relatively good demand for pig meat throughout the EU with prices 5% below the 2012-13 average at 130p/kg; thus 2014 consumption is likely to slightly recover from the 2013 low (31kg retail weight/head) to reach 31.4kg/head in 2015.