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News and analysis on the global poultry
and animal feed industries.
on January 28, 2009

EU pig profitability fails to improve

Data recently published by the European Commission shows that between September and December 2008 average pig feed costs fell by 14% across the European Union (EU), according to the European Market Survey.

Data recently published by the European Commission shows that between September and December 2008 average pig feed costs fell by 14% across the European Union (EU), according to the European Market Survey.

Some improvement in profitability had been anticipated in December, but rather than stabilizing, pig prices continued to fall through to the end of the year. As a result, the pig to feed price ratio expressed in index form was 94 in December (1980-1982 = 100), compared with 96% in September.

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Over the year as a whole, the pig to feed price index was 83, indicating that pig production was slightly less profitable than in 2007 when the index was 87 and significantly less profitable than in 2006 when the index was 118.

The average annual increase in the EU pig price in 2008 was 13%, but feed prices rose by 18%. While there was a significant year-on-year improvement in profitability over the autumn of 2008, this was insufficient to offset the poor performance in the first half of the year. European production is forecast to trend lower at least until the middle of 2009 as a consequence of negative net margins for much of 2008, says the European Market Survey.

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