EU pig meat production is to come down by 2% next year, and exports are exepected to come down by as much as 10%, the European Commission said. For this year, EU pig production is expected to remain stable, despite a decline in pig population by 1.7% (-3.2% for sows).
In its Short Term Outlook for Arable Crop, Meat and Dairy Markets, the European Commission wrote that a reduction in the 2013 production “would be mainly caused by a further reduction in the sow herd, as new animal welfare rules on group housing of pregnant sows will become obligatory from 2013, therefore requiring significant investments for pig producers.”
The report contines, “Although several member states have launched initiatives to financially support farmers to adjust to the new requirements, producers that have not adapted their production technology during the transitional period of ten years might come under pressure and cease their activity. The new member states are less affected, as substantial investments in production systems were made after accession.”
Export decrease in 2013
The reduction in production can also be seen in a projected decline of pork exports by more than 10%. The EC wrote: “EU pigmeat imports are always marginal and would further decline, both in 2012 and 2013, to settle at around 13,000 to 14,000 tons per year. Consumption is expected to decrease slightly in both years (-0.4% and -1.0% respectively). Pigmeat prices are likely to remain at elevated levels throughout 2012.”
Export forecasts for 2012 are still positive, according to the EC. “As regards trade, the current weak euro and the robust global demand, particularly in China, lead to a favourable outlook for EU exports in 2012, with an expected increase of 3.5% following the exceptional growth registered in 2011.”
Although feed costs are also high (especially for soya), producer margins are stable and above the average of the last five years.
Table 1. EU-27 pigmeat meat balance sheet.
Source: Short Term Outlook for Arable Crop, Meat and Dairy Markets (European Commission, June 2012).