EU Pig Production to Fall

Pig production in the EU is expected to fall in the second half of next year and through into 2012, writes ThePigSite senior editor, Chris Harris.
calendar icon 3 December 2010
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Karsten Flemin, economist with the Danish Agriculture and Food Council, predicts that there will be a slight rise in production in this current last quarter of 2010 and output will rise slightly across Europe in the first half of 2011.

However, the rise in production will slow in the second quarter of the year and will start to fall in the second half of the year.

Mr Flemin said the virtually stable production next year – with increases mainly in Germany and Poland – will be the basis for better prices.

However, he said that production is likely to be affected by the new regulations that are coming in on loose housing and the ban on stalls and tethers in the EU and prices will also be dependent on volatile feed costs.

While production will rise and then is predicted to level off and fall in the EU next year, global production of pig meat is expected to rise.

Mr Flemin said that pig weights are expected to rise increasing the amount of pig meat on the market.

China, which this year is expected to see an increase in pig production of two per cent on 2009 from 48.905 million tonnes to 50 million tonnes, is forecast to continue production growth by another three per cent next year to 51.5 million tonnes.

EU production is expected to fall next year by one per cent from 22.25 million tonnes to 22.12 million tonnes.

However, the US, Russia and Brazil will all see rises in production of between two and three per cent.

Mr Flemin said that the rise in consumption demand in China will largely be met by increases in its own production. However, he predicted that its production will not be able to keep pace with demand because of the shortage of grain for feed.

"It is a question of whether they will import feed or meat," said Mr Flemin.

"If they take the steps towards GMO for crops, then they will be able to increase production of feed."

Mr Flemin added that while Brazil will be increasing its pig meat production, it will be hampered by the fact that many markets are not open to Brazilian pig meat.

"Russia is also increasing production but demand in Russia is increasing at the same rate as production," Mr Flemin said.

He said that Canada is reducing its production, but imports are fairly stable showing just a small increase.

He added that there will be a fall in production in Canada in the second half of 2011, but 2012 and 2013 will show the biggest dip.

Mr Flemin said that the US is forecast to have more meat to export in the second half of next year and there is generally expected to be a slight increase in pig meat trade.

However, he added that much depends on the fluctuating exchange rates and the fall in the value of the US dollar and the Japanese yen will affect pig prices.

"Demand in the EU is going down because of the tightening of the belt on the EU economy," Mr Flemin said.

"Because of these changes, poultry is going to be the big beneficiary worldwide.

"If the harvest fails again in some countries, then feed prices are going to stay up and this will affect pig meat production.

November 2010
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