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AHDB Pork

EU pig meat production growth supported by strong export demand

Iain HoeyBy Iain HoeyJuly 15, 20202 Mins Read
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The EU Commission has recently published the summer edition of its short-term outlook for agricultural markets which forecasts strong pork export growth in 2020 for the EU-27, excluding the UK.

The production growth is a slight downwards reduction from its previous forecast (+0.7%), which is likely a reflection of disruption to both processing and exports caused by COVID-19 this year.

The outlook report, which AHDB analyst Felicity Rusk breaks down, indicates that EU pig meat production will show slight growth in 2020, in the region of 0.5%. This rise in production is expected to be supported by strong prices encouraging expansion and the return of domestic demand, particularly within the foodservice sector.

Prospects of strong export demand, predominantly to China, remains a key driver of the European market. EU consumption of pig meat is expected to fall below 30kg per capita in 2020, due to reduced consumption during quarantine periods, particularly for the foodservice sector.

EU pig meat exports are expected to continue showing strong growth this year, supported by robust demand from China. Coronavirus has only slowed down the Chinese attempts at herd-rebuilding after ASF reducedthe nation’s herd and so production is expected to fall by up to 20% this year.

Ms Rusk commented: “EU pig meat exports have already benefitted from this strong Chinese demand, recording a 150% increase in the first four months of the year. However, compared with the end of last year, China has also been increasing supplies from the US, Brazil and Canada, increasing their market share at the detriment of the EU. Looking ahead, this will be a key watchpoint, particularly as the US moves to capture more of the Chinese market.

“Recently, global meat exports to China have also faced disruption due to coronavirus outbreaks amongst staff in processing plants. Some plants have suspended shipments to China because of this, with the Netherlands particularly affected. It remains unclear how and when this situation will be resolved. If prolonged, it could ultimately challenge the EU commission’s positive export outlook.”

“This challenge is also currently combined with unresolved disruption to slaughter in Germany. Together, this means pig prices are not particularly favourable at the moment. The expectation of strong prices could be challenged if these, or similar difficulties, are ongoing in the coming months.”

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Iain Hoey

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