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Global Pig Meat Output Flat under High Feed Costs

31 December 2012

BordBia

Globally pig meat production had been increasing but in many regions a downturn is now expected, in particular in the exporting countries of North America and the EU, according to David Owens from the Meat Division of Bord Bia – Irish Food Board.

Following a forecasted 2% increase in global output this year to over 104 million tonnes, production is expected to settle down in 2013. Availability of supplies is expected to tighten during 2013, in response to growing International market demand.

The sharp rise in feed ingredient prices, both of cereals and soya beans due to a drought-hit US harvest, is pushing pig producers throughout the world into a substantial loss making situation. In the EU the situation is being exacerbated by the introduction of sow welfare legislation. The extent to which producers will cease business because of this legislation is unclear and will vary from country to country.

By the middle of next year pigmeat production can be expected to fall in many global markets given cutbacks in sow numbers which are now starting to take place. According to the recent USDA Livestock & Poultry World Markets and Trade Report, production is to increase in China, Russia and Brazil, whereas production will decline in the EU, US, Canada, Japan and South Korea.

Following a forecasted 2% increase in global output this year to over 104 million tonnes, production is expected to settle down in 2013. Availability of supplies is expected to tighten during 2013, in response to growing International market demand.

% Change in 2013 Pigmeat Production

Source: USDA Livestock & Poultry World Markets and Trade Report

EU Breeding Herd Falling

EU pig numbers are set to decline further as some producers across Europe are downsizing, de-stocking or exiting the industry. The EU breeding herd had already been in decline since 2011 with last Decembers pig survey showing a fall of three per cent in sow numbers.

Midyear 2012 herd surveys for countries representing over 85% of EU production, have reported a one per cent decline in the total EU pig herd with a further 4% decline in sow numbers. This reduction in sow numbers has already affected pig supplies in a number of countries, notably Germany, Denmark, France and the Netherlands.

These surveys were conducted prior to the sharp rise in feed prices; therefore numbers could be expected to fall further as the year progresses. Higher total pig numbers were evident in the UK, Germany and Ireland, with no change in Romania and Italy. The sharpest decline was in Poland with an 11% fall recorded.

EU market prices are very responsive to changes in supply and pig prices can be expected to move up during the course of 2013.

EU Mid-year 2012 Pig Herd Surveys (% Change vs 2011)

Source: EU Commission

December 2012

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