EU Forecasts Optimistic for Pig Meat (September 2008)
By Chris Harris, Senior Editor, ThePigSite. Our snapshot of the ongoing global pig industry trends as reported in September 2008 Whole Hog Brief. To read the full detailed analysis including all the commentary and graphical data, subscribe to the publication.The medium-term perspectives for animal products are relatively positive for poultry, pig meat and the dairy markets, while beef production is expected to continue to decline according to the Whole Hog's report of the EU's "Prospects for agricultural markets and income in the European Union" for 2007-2014.
The Whole Hog shows that EU-27 pig meat production is estimated to have increased to 22.14 million tonnes (+1.3 per cent) in 2007, being at the peak of the pig cycle (the trough in prices). Due to the effect of enlargement, extra-EU pig meat imports are expected to decrease significantly (-71.5 per cent to 30 000 tonnes), while exports to third countries would reach around 1.3 million tonnes (-7.5 per cent).
In the medium term production is expected to rise at a slower rate than in the nineties but consumption prospects are positive.
Overall meat consumption is projected to increase from the estimated 84.5 kg/head in 2006 to around 87.2 kg/head by 2014.
The Whole Hog adds that with strong cereal prices at present and bad harvests over the last two years, intervention cereal stocks have dropped.
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Chart: European Commission
The Whole Hog's index of global pig prices has shown a sharp rise in recent weeks and even a fall in US prices was not enough to disrupt the upward momentum.
US prices are still 18 per cent higher than last year despite the recent drop. Canadian prices are 25 per cent up and Danish prices 21 per cent up.
The Whole Hog says that the credit crunch will only directly affect those parts of the world where credit was available before the crunch. That still leaves a lot of consumers who have money in their pockets and an effective demand for protein.
Canadian hog numbers down
Canadian hog numbers have fallen to levels not seen since 2000, according to Statistics Canada. Numbers fell to 12.985 million in July, 11.7 per cent below the numbers for July 2007 and 1.9 per cent fewer than two years ago.
The breeding inventory was 1.493 million head in July, 4.6 per cent under the previous year's numbers. The Canadian government's breeding swine cull programme had expected to cut the numbers even further, but by the beginning of August just 29,000 had be slaughtered out of the target 120,000.
Canadian pork exports rose by 6.8 per cent between January and June compared to the same period in the previous year.
Canadian producers have exported 34,315 tonnes more pig meat this reaching a total of 535,417 tonnes.
However, the Whole Hog says that Canada is facing difficulties in all its traditional markets, but has managed to offset these problems with rises in exports to places such as Hong Kong, Taiwan, China and the Philippines.
EU Prices Highest Since 2001
The average EU pig meat producers' prices reached € 174.61 in the second week of July, which was the highest level since April 2001 when it was €180.
The Whole Hog says that EU prices were still rising through the summer. In August they were 18.6 per cent higher than in August 2007, which was six months of rapid price growth since
March 2008. The highest prices are in Germany and in the Eastern European countries.
Weak Dollar Drives US Exports
During June, US exports of pork cuts and pork variety meats reached 184,964 tonnes. This was down by 1.8 per cent from the previous month's record but was up 106.6 per cent on June 2007.
Japan was the main pork export market for the US with 22.5 per cent of the total. US pork exports to Mexico during June equalled 28,226 MT, up 3.4 per cent over the previous month.
Australian Bureau of Statistics for May 2008 show that the volume of Australian pork imports fell by 13.9 per cent compared to May 2007 and reached to 10,898 tonnes shipped weight (SW).
The Whole Hog says that the Moving Annual Total Volume for May 2008 was 100,820 tonnes SW, 3.1 per cent lower than in the same period in the previous year.
However, Australian pork imports saw a bigger fall in value.
Japanese imports are rising up by 4.4 per cent in May compared to April to 75,993 tonnes.
This was 6.2 per cent higher than May 2007. Imports of frozen pork were 52,824 tonnes, which was up 5.5 per cent over the previous month and was up 4.2 per cent over May 2007.