Following the compulsory introduction of the welfare rules for breeding sows by December 2013, the 2013 number of breeding sows was still 1.6 per cent below 2012 at 15.2 million head, according to the latest Short Term Outlook for Arable Crops, Meats and Dairy from the European Commission.

Declines in Germany (-3.0 per cent), France (-3.1 per cent), Poland (-5.6 per cent) and Italy (-5.0 per cent) were partly offset by increases in the Netherlands (+1.3 per cent) and Denmark (+2.4 per cent). The implementation of group housing for sows and the low profits of last years translated in a shortfall in the number of piglets going into production, with high prices for piglets recorded at the beginning of the year, peaking at €54 per head in April (9.0 per cent above the 2012-13 average).

The Russian ban on EU pig meat introduced after the discovery of a few cases of African Swine Fever in wild boar close to the border with Belarus added uncertainty on the market.

Against this background, pig meat production in 2014 is anticipated to increase only marginally by 0.2 per cent, with higher supplies in Denmark and the Netherlands expected to compensate for potential drops in France, Germany and Spain. Provided that market conditions will improve next year, production could recover at a slightly stronger pace in 2015 (+0.8 per cent).

In the first four months of the year, shipments to Russia decreased by 80 per cent compared to last year; however the strong Asian demand limited the decrease of total EU exports to 16 per cent. The reduction in the US supply in 2014 following the Porcine Epidemic Diarrhoea virus (PEDv) outbreak has contributed to the increase in the demand for EU pig meat coming from the Asian markets (China, Japan, South Korea, Hong Kong, Singapore or Philippines).

Nevertheless, given that Russian volumes account for one-third in total EU exports, the strong Asian demand is not expected to compensate fully for the sharp drop of exports towards Russia and over the whole year the EU exports are expected to fall for the first time in several years (-7.0 per cent compared to 2013). Given the uncertainty related to trade developments with Russia, EU exports of pig meat are currently estimated to recover only marginally in 2015. Without Russian agreement on the regionalisation system implemented by the EU, EU pig meat exports might be further affected.

There is currently a relatively good demand for pig meat throughout the EU with prices five per cent below the 2012-13 average at €164 per 100kg; thus 2014 consumption is likely to slightly recover from the 2013 low (31kg per person) to reach 31.4kg per person in 2015 (in retail weight).

Pig offal exports

Around one million tonnes of pig meat offal are exported to destinations outside the EU, with five EU countries accounting for more than 80 per cent of total offal exported (the Netherlands, Spain, Germany, Denmark and France). An increasing share goes to China including Hong Kong: from around 40 per cent in 2005 to almost 70 per cent in 2013 while the share to Russia is steadily decreasing – from 35 per cent to 10 per cent over the same period.