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Pig meat supply situation causes upsets in Europe

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Spanish pig farmers are calling for an investigation into German pork prices, which, they say, are below the cost of production. French pig farmers are protesting in their usual way by attacking foreign trucks. These are just some examples of the indirect effects of the continuing Russian ban on imports of pig meat from the European Union (EU) and other leading exporters.

In Spain, the Valencian Farmers Association (AVA-ASAJA) has called on EU authorities to investigate the low prices at which Germany is selling its pig meat in European markets. The association says this is causing the pork market there to collapse, a situation exacerbated by protesting French farmers attacking Spanish vehicles transporting pigs and other products.

According to AVA-ASAJA, Germany is the No. 1 pig meat producer in the EU and it therefore has the main impact on prices. With the Russian ban on EU pork extended for at least another year, the loss of this important market has imbalanced the supply and demand situation in Europe, leading to lower prices for producers.

The association says Germany is offering pork at EUR1.09 (US$1.2) per kilo, compared to EUR1.26 in Spain and EUR1.25 in France, while the Dutch have lowered their prices to EUR1.04.

AVA-ASAJA President Cristóbal Aguado alleges Germany may be contravening the law because their prices are below production costs and that this is seriously distorting the functioning of the market.

German pig producers’ organization,ISN highlights the reduced supplies of slaughter pigs on the EU market in its latest weekly report, attributing this to the high summer temperatures in the south reducing feed intake and growth rates.

Of the major markets, only the French have seen an increase in prices in the last month. Spanish pork prices are among the highest in the EU at EUR1.665 per kilo, followed by France (EUR1.609), Denmark (EUR1.387), Germany (EUR1.346) and the Netherlands (EUR1.253).

At 1.796 Euros per kilo, producer prices are the highest in the UK, according to ISN. The comparison is complicated by exchange rates. TheAgricultural and Horticultural Development Board (AHDB;formerlyBPEX) comments the gap between UK and EU pig prices remains high by historic standards. There is no sign of an increase in pig meat imports from Europe, however, as retailers remain committed to UK sourcing.

Rather than looking to export to other EU states, UK food companies are instead taking advantage of more distant markets.Cranswick PLC, for example, reported this week its quarterly sales are up 4 percent from the same period last year, partly as the result of a 14 percent increase in sales, which include pork, to Asia.

Nevertheless, British pig prices are around 30 pence lower than they were a year ago, according to UK pig meat market analyst, Peter Crichton, in hisTraffic Lights report.