Overview of This Week’s Pig Industry News

23 April 2012, at 11:43pm

ANALYSIS – The EU directive partially banning sow stalls from January 2013 has much to commend it but the impacts on the pig meat market may have been overlooked or underestimated, writes Jackie Linden. According to a new report, pig production in the EU could to fall by between five and 10 per cent as ‘significant numbers’ of producers quit the industry and one of the scenarios presented indicates a complete re–alignment of the industry across the Community. USDA now forecasts global pork production for 2012 to be around 104 million tonnes.

EU regulations banning battery cages for laying hens and sow stalls have much to commend them but the impacts on the market may have been overlooked or underestimated.

Just three months after the battery cage ban, EU egg production is reported to be down by between 10 and 15 per cent and there has been much disruption in the market, including in some unexpected areas. A partial ban on sow stalls is due to come into force in January 2013 so what can we expect for the pig sector?

In a report published in the last week entitled Market Impact of EU Regulations on Group Housing of Sows, it is stated that fewer than half EU Member States are expected to be fully compliant with the EU Directive, according to the British Pig Executive (BPEX), part of the AHDB.

This is expected to result in market disruptions, says the report. Pig production in the EU could to fall by between five and 10 per cent as ‘significant numbers’ of producers quit the industry because they will be unable or unwilling to comply with the new sow stall ban. Pig meat processors and retailers are expected to face substantial price increases.

The European Commission has made it clear that it expects the new rules to be rigorously enforced and will initiate infraction proceedings against Member States which are not fully compliant, just as for the egg industry.

AHDB Senior Analyst, Stephen Howarth, said: “Historically, even small changes in pig production have led to significant shifts in price. With production likely to fall by five per cent or more, prices could be at least 10 per cent higher, possibly more.“

BPEX Chairman, Stewart Houston, said: “It is imperative for retailers and processors to ensure contract arrangements that guarantee the supply of pig meat under terms that allow sensible business decisions to be made and for everyone in the supply chain to work towards a sustainable, profitable sector.“

The report envisages three possible scenarios.

The most likely scenario, suggest the authors, is that total EU pig meat production in 2013 would be around five per cent lower than in 2011.

A second scenario, which would result if enforcement of the new rules were to be rigorous, would lead to a 10 per cent cut in pig meat output in 2013 compared to 2011.

The third scenario presented considers the possibility that the regulations would be a catalyst for a realignment of production in the form of integration across much of the EU, with breeders in North West Europe supplying piglets to finishers in Eastern and Southern Europe. This situation would have significant impacts on the environment, welfare and the processing sector but it may reduce production costs, suggests the report.

Spain’s livestock industries are under attack from all directions, it seems. Not only is the present drought hitting domestic feed crops yields, as previously reported but now, the country's farmers are threatened by a possible ban on imports of soy and other products from Argentina. The ban is being considered in retaliation for a political wrangle between the two countries over the ownership of an oil company.

Colombia's farmers are concerned about the free trade agreement (FTA) with the US, which begins on 15 May 2012. The agreement will eliminate most tariffs immediately and phase out the remaining tariffs over periods of up to 19 years. Pork is among the US farm products that will receive immediate improved market access in Colombia.

This treaty is a double–edged sword for Colombia. The livestock sector generally wants access to cheap corn and soybeans to feed their animals, since they import large quantities of these products from the US, while the poor state of the country's roads may be put into the spotlight.

Global pork production for 2012 is expected to be around 104 million tonnes, according to a new report from USDA. China, the EU, and the United States will account for most of the forecast growth but higher output is also predicted from Russia and Mexico.

Outbreaks of swine fever – both classical and African variations – have been reported in Russia during the last week.

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