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AHDB European Market Survey

18 April 2012

AHDB European Market Survey - 13 April 2012AHDB European Market Survey - 13 April 2012

The average price of weaners in the EU has risen steadily since October.


EU weaner prices reach record high

The average price of weaners in the EU has risen steadily since October. By week ended 25 March, the average price had reached €51.65 per head, its highest level since the expansion of the EU to 25 Member States in 2004. The figure was more than 50 per cent higher than it was six months earlier and 24 per cent higher than in the equivalent week a year ago.

The rapid rise in weaner prices is partly seasonal but has been driven by relatively strong demand coupled with a shortage of supply. The supply shortage is largely due to the three per cent reduction in the size of the EU breeding herd during the year to December 2011 (see EMS 12/08). As a result, the number of piglets and weaners recorded in the December Census was little changed, despite continuing productivity gains. Robust demand comes partly because some producers have switched from breeding to finishing, notably in Poland and elsewhere in Eastern Europe. In addition, expectations of higher finished pig prices later in the year are encouraging demand, despite rising feed prices since the New Year impacting on margins.

In percentage terms, the sharpest price increases were in Poland and Hungary, where prices were around 75 per cent higher than a year earlier. Prices in Poland are still lower than in most other major producing Member States but the gap has narrowed significantly due to steadily increasing values since January 2011.

Germany is the largest market in the EU, with 8 million head of imported weaners to add to the output of the EU’s second largest breeding herd. At the end of March 2012, prices here were 21 per cent higher than a year earlier and over 60 per cent above their level in September 2011. Given the close links with the German market, the Dutch weaner price followed a somewhat similar trend. Prices in Southern Europe have also risen rapidly in recent months, with prices in Spain more than doubling since September 2011.

There were a few exceptions to the general pattern of price rises. Most significant was Denmark, the EU’s largest exporter of weaners. Prices here were slightly lower than at the start of the year, although still seven per cent higher than a year earlier. Other Scandinavian countries and the UK also experienced more modest rises in prices in recent months. UK prices were 16 per cent higher than a year earlier, in euro terms, but only 18 per cent above their October low-point.

Contrasting trends in Italian beef and pork imports

Italian beef and veal imports were down six per cent in 2011 as consumer demand for beef remained weak, with cutbacks in consumer spending. Despite the overall fall, imports from the largest supplying nation, France, were up three per cent. This was largely due to France exporting surplus young bull beef at competitive prices given higher production in 2011. Italian young bull beef production was down eight per cent on the year in 2011, which contributed to higher cattle and beef prices and falling consumption. Beef imports from non-EU countries were also down three per cent on the year, despite a four per cent rise in shipments from Brazil. The unit prices of imports in euro terms was up eight per cent on the year.

Exports of Italian beef and veal were up one per cent on 2010 levels to 135,000 tonnes, largely the result of a near doubling of trade with the Netherlands, as trade with the largest markets of France and Germany declined.

Total live cattle imports were down two per cent to 1.3 million head in 2011, despite a two per cent increase in imports from France, which accounted for 73 per cent of the total. High feed costs have affected demand for imported store cattle from feedlots, after having grown strongly in 2010.

Imports of fresh and frozen pork were one per cent higher in 2011 than in 2010. Shipments from Germany and Spain were up eight per cent and four per cent, respectively. In contrast, imports from the Netherlands and France were down seven per cent and 10 per cent respectively. The average unit price of all pork imports was up four per cent to €1,893 per tonne. Imports of fresh and chilled legs for curing into hams were up three per cent on the year to 613,000 tonnes.

Live pig imports in 2011 were up 17 per cent to 1.1 million head. The increase was mainly due to a 44 per cent rise in shipments from Denmark. Weaners represented more than two-thirds of the total , with numbers up 22 per cent. Slaughter pig imports were up four per cent on the year.

Total Italian pig meat production was down four per cent in 2011 on the previous year and this contributed to a one per cent fall in household purchases of pig meat. In January to November 2011 household fresh pork purchases were down one per cent year on year but purchases of more expensive processed products, including salami, increased two per cent.

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