USDA report sees more export progress for EU pigmeat

The EU meat sector is forecast to retain production and export levels despite the Russian ban on pork and beef, according to the latest foreign agricultural service (FAS) report from the US Department of Agriculture (USDA).

Observing that the sector further improved its efficiency and benefitted from low feed prices in 2014, the FAS report forecasts that EU exports of beef and pork will “expand” in 2015, particularly in Asian and African markets.

The overall FAS view on pigmeat in particular is that the EU is withstanding the Russian ban, certainly in terms of output volume and the finding of replacement export markets.  The report is less positive on price and margin forecasts for 2015, however, or on an early return of sales outlets in Russia.

The price/margins summary is that the global competiveness of the pigmeat market, continues to be “combined with record low prices and tight or negative profit margins”.

On what is likely to happen next in terms of EU/Russian trade, the FAS commented: “The general Russian ban is currently in place until August 2015.  It is, however, questionable if the African Swine Fever-related ban on pork will be lifted then to allow the EU to restart exporting to Russia.

“Reportedly, six EU member states, France, Hungary, Italy, Germany, Denmark and the Netherlands, unsuccessfully attempted to negotiate the lifting the ASF ban on their products which are not covered by the general ban; live pigs, breeding material, offal and fats.”

In that context, the FAS takes the view that the EU’s success in finding alternative export markets will need to continue in 2015, noting that while the Euro has not weakened against the currencies in the main Asian markets, it lost its value against the US dollar.

“This is expected to further support the competiveness of EU pork on the world market,” concluded FAS.

See full FAS report

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