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Slightly more meat in 2014 following two years of decrease

PW ReportersBy PW ReportersJuly 8, 20133 Mins Read
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The European Commission’s latest Short Term Outlook for EU arable crops, meat and dairy markets suggests prospects for an improved economic situation and lower grain prices could generate a slight increase in meat production, which could reach about 43.5 million tonnes in 2014, after two consecutive years of reduced overall meat production driven mainly by lower supplies in beef and pig meat. Pig meat production in 2013, however, would fall for the second year in a row.

The summer edition of the publication says that after two consecutive years of increased pig meat production in the EU, 2012 marked a 2% decrease. High feed costs, the restructuring process and the implementation of new welfare rules were the main drivers for such a decline in herd numbers and in meat production.

Tight supply conditions are likely to continue in 2013 at a very similar pace (-2%) as indicated by the December 2012 agricultural censuses and by slaughtering data for the first few months of the year. The census set the EU pig herd lower by 1.8% against the previous year at 145.8 million head, driven mainly by the dramatic fall in Poland (-14.7%) and lower numbers in Spain (-1.5%), France (-1.4%) and Denmark (-0.5%); on the contrary, Germany’s herd, which accounts for 20% of the EU total, increased by 3.4%, partially offsetting the decline in the other countries.

As for production, increased slaughterings in Germany (+1.3%) in the first months were not enough to compensate for the declines in Denmark (-7%), Spain (-3.7%), France (-2.3%), Netherlands (-5%) and Poland (-1.4%).

Lower supplies maintained meat prices at high levels throughout the first quarter of 2013 (172 euros/100kg in March); a slight relief in prices could be observed in May due to sluggish demand, but prices started to pick up again in June. Firm prices and limited supply are expected to lead to a decrease in both consumption and exports in 2013.

On the trade side, data for the first four months indicate a decline by 2% in pigmeat exports mainly due to Russia (-2% compared to the same period last year). April EU exports to Russia increased by 27% compared to their respective 2012 figure, in spite of some restrictions introduced by Russia on some EU meat. In addition, the Russian ban on the US and Canadian pigmeat exports in place since February should favour EU exports into Russia.

Nevertheless, and despite the recovery of Russian imports and the increased demand in China (+78%) and Japan (+5%) in early 2013 , exports are expected to decline by 6% given the limited supply over the whole year.

Projected lower cereal prices on the assumed good 2013 harvest are expected to help increase production and stabilise consumption in 2014. With the accession to the EU, Croatia will add approximately 1.2 million head to the EU total pig herd (December 2012 census). This is equivalent to 86,000 tonnes of meat per year, which is just 0.4% of EU pigmeat production.

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