Hungary counts falling numbers
To understand the situation for pork production in Hungary in 2007, it is important to identify the main reasons for the radical fall in national pig numbers over recent years
Hungary in 2007 has about 4 million pigs on its farms. This represents a significant drop in pig population since the change of regime in 1989 and also suggests a further fall following the country's membership of the European Union (EU) in 2004. But the Hungarian pig sector has in fact seen a prolonged period of decreases over the last 30 years or more.
Historically, a government programme to increase pork production in Hungary began back in 1970. Approximately 300 pig farms were constructed, all of them with indoor pens and a large herd of sows. Completely new breeds appeared. We started to see examples of the Pietrain, Hampshire, Landrace (Belgian as well as Dutch and Swedish) and various types of Large White or Yorkshire.
By 1985 the on-farm pig inventory had reached 9.5 million. That was enough to cover the national supply and even to give some for export, mostly to the then Soviet Union. Still, there were many small farms present besides the large production units. About 70% of the pig population could be found on those small-scale enterprises.
This percentage has changed markedly since that time because of a steady shift in the balance towards large-scale production. Today, the larger units contain 65% of all pigs so that the share held by small-scale farming has slipped back to little more than one-third.
Reduced by half
Meanwhile, the total pig numbers in Hungary have traced a decline. Already down to 8.4 million by 1990, they were as low as 5 million in 1994. The figure of 4.8 million registered in 2000 became just 4.3 million in 2004 before slipping below the 4 million mark in 2005 and 2006.
The year 2004 brought Hungary's membership of the EU. Before the accession, between 65-70% of the EU's pork imports from third countries came from Hungary. But export of 132 000 tons in the year 2000 has now decreased to 94 000 tons today. In the meantime the amount of pork imported has risen from 26 000 tons to 84 000 tons per year, an increase of 215%!
To understand the situation for pork production in Hungary in 2007, it is important to identify the main reasons for the radical fall in national pig numbers over recent years. One factor has undoubtedly been the loss of exports to the former Soviet Union. Imports of pigs or pork are relatively cheap, undermining local prices. Hungary has also suffered from a withdrawal of government subsidies because of EU regulations.
More fundamentally, however, the Hungarian pig sector still has the problem of being comprised of old-fashioned farms with outdated technology. Even if producers want to modernise, there is a scarcity of capital because banks prefer to keep away from financing animal production, inevitably resulting in a low rate of efficiency at farm level.
A lack of land
Producer economics are made worse by the fact that few of the farms have agricultural land and therefore their operators must buy all the feeds they need. Other negative aspects are that local producers do not have a share in meat processing activities and the role of multinational companies in supermarket chains ensures that retail prices stay down. At producer level nationally there is also the weakness of a lack of solidarity, with no effective federation to protect the interests of the industry.
The situation is worsened by the fact that there is no national pig breeding. Gilts are supplied by each farm and artificial insemination (AI) is done using the herd's own boars. People are accustomed to this practice, which is probably why they do not show signs of switching to the purchase of semen from an AI centre. Yet Hungary does have such centres for the purpose. An accompanying photo shows the Sui-Anivet boar semen producing station which meets all requirements, with 70 top boars of different breeds available. There have been some initiatives in this field, but we still wait for the big breakthrough.
At the same time Hungary recognises that other countries of central Europe face similar difficulties. It is noticeable that the biggest decreases in pig numbers in the region have involved 4 of the countries which became members of the enlarged EU in 2004.
Romania and Bulgaria joined the EU later, but they were even bigger losers on pig inventory during the 1997-2003 period. Romanian numbers went from 7.5 million to less than 5 million. Those in Bulgaria plummeted from 1.5 million to under a million.
On the other hand there have been exceptions. Poland's pig population has not diminished, unlike in other countries. In Poland there are 17.5 million pigs, but backyard production remains dominant. Only 15% of the total number is kept on farms which have more than 200 pigs each.
However, the Polish industry differs from others in the region principally by having attracted foreign capital at an earlier stage. Its best-known investor has been the US giant Smithfield Foods. The big players now hold a 30% share in the pig industry in Poland. Interestingly, Hungary was not targeted by foreigners in the same way. There have been some unskilled attempts, but all of them failed.
The other exception in this region is Austria, as it had the biggest pig population in 1998 (3.8 million) and this has only dropped by 20% since then. However, we have to mention that Austria's pork consumption is high at 56-58kg/person/year, while in Hungary it is only 25-28kg.
A strange point about the Hungarian pig industry's battle with cheap imports to fulfil these requirements is that the imported supplies do not flow in just from countries in the west of Europe such as the Netherlands, but also from Poland and Slovakia places closer to us geographically and in a similar situation to ours. Hungary's imports may even increase in 2007. This year's crop production in our country was badly affected by drought and feed prices are rising incredibly, so a further drop in pig population can be expected. PIGI