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Weekly Overview: Looking Forward to 2013

31 December 2012

ANALYSIS - What would this Chinese fortune cookie tell us about the prospects for the global pig industry in 2013? New funding for agriculture research and development should bring improvements for producers over time, as innovative gene technology is already bringing benefits. There remain many unknowns, however - pig meat production in the EU as the sow stall ban comes into effect, for example, and the continuing threat of the spread of African swine fever.

Global investment in agricultural research and development is growing but some of the poorer developing nations are more vulnerable to volatility of funding than the more developed countries.

The new wave of investment in R&D in developing nations follows a long period of decline, according to a report from the Agricultural Science and Technology Indicators group based in Italy.

In a recently published report, ASTI assessed the growth or decline in agricultural R&D spending from the start of the millennium until 2008. This study has shown a US$5.6 billion or 22 per cent growth in agricultural research spending from $26 billion to $32 billion - an annual growth rate of 2.4 per cent.

The study shows that the positive outcome of the increase in spending is that most of it came from the developing nations. However, while these nations were spending more, the bulk of the investment was from middle income developing countries such as Brazil, China and India.

India and China alone account for half of the spending growth.

Also looking to the future, producers are using the markets more and more to hedge their costs and reduce their financial risk.

By entering the cattle and pig futures markets, producers are mitigating the risk of volatile markets and by using the corn, grain and soybean futures markets, producers can help to mitigate the effects of fluctuations in cost - particularly high feed costs.

When it comes to the question of the heath of livestock, advances in gene technology and testing can help producers to monitor disease and maintain surveillance for the spread of infections so they can take preventative measures.

There has been much discussion in the trade press about the level of preparedness in European Union countries for the partial ban on sow stalls, which comes into effect on 1 January 2013. Around half the member states are thought to have significant numbers of producers who still have not yet converted most of their sow accommodation to group housing. The impacts on the pig meat market - both within the EU and more globally - are much talked about but difficult to predict.

In preparation for the unknown, FAO organised a high-level meeting about the threat of African Swine Fever spread in Eastern Europe in early December 2012, from which emerged 14 recommendations to help control the disease.

Jackie Linden

Jackie Linden

Top image via Shutterstock



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