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on February 6, 2013

EU pig production and income predictions for 2012-2020

Pig meat is the most consumed meat in the European Union and is expected to increase 4.3 percent.

The contraction in the pig herd in 2011 compared to 2010 (-1.7 percent), and more markedly in breeding sows (-3.2 percent), generates a marginal decline in EU pig meat production in 2012 (-0.4 percent), according to a recent study “Prospects for Agricultural Markets and Income in the EU 2012-2022.” 

In 2013, the decrease is expected to be even larger (-3.2 percent), as it will cumulate with the impact of mandatory welfare standards coming into force as of January 2013 and of higher feed costs incurred due to the United States drought.

After its fall in 2012 and 2013, pig meat production is projected to resume its growth from the second half of 2014, as production is expected to respond to high prices, with farmers progressively adjusting to the new welfare requirements. By 2022 pig meat production would roughly settle at the level of 2011, i.e. approximately 23 million tons.

Feed prices, inventory

Increased feed prices as a result of the drought in the US during the first half of 2012 were compensated by high pig meat prices which led to stable pig producers' margins. After reaching the historical high of 1 900 EUR/t in September 2012 (31 percent more than the 2007-2011 average), prices fell slightly in October (-0.5 percent against the previous month). Piglet prices have so far followed the seasonal trend and are situated around 470 EUR/t.

As regards trade, January-August 2012 data confirm stronger EU exports, 5 percent higher than the same period last year, mainly due to the weak Euro and the strong global demand, particularly from China, Russia, Ukraine and Japan. Overall, 2012 is projected to end with an estimated 1% increase in exports compared to the already very high level registered in 2011.

Lower availabilities in 2013 would trigger a projected decline of 15 percent in EU exports, followed by a rebound in 2014, when production is expected to recover; this trend would be of short duration as exports would then start decreasing again (-9 percent on aggregate over 2011-2022).

Pig meat consumption

Overall EU pig meat consumption is expected to increase by 4.3 percent (+3 percent and +10 percent in the EU-15 and EU-N12 respectively). Although EU per capita consumption would decrease by 1.6 percent between 2011 and 2022, pig meat would continue to represent half of EU total meat consumption. It is worth observing that, at world level, poultry meat would represent the most consumed meat overtaking pig meat (on average 14.5 kg/capita versus 12.7 kg/capita).

The EU is more than self-sufficient in pig meat, producing about 110 percent of its domestic consumption and this trend is expected to continue throughout the outlook period. However, increased competition from other producing countries (for example, China) would see the EU production share in global production slowly decline.

This medium term outlook provides a projection for major EU agricultural commodity markets and agricultural income until the year 2022, based on a set of coherent assumptions. Under these assumptions agricultural commodity prices are expected to stay firm over the medium term, supported by factors such as the growth in global food demand, the development of the biofuel sector and a prolongation of the long term decline in food crop productivity growth.

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