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International issues weigh on pig markets alongside supply increase

International responses to disease and trade disputes were weighing on pig markets alongside an increase in supply. 


Alex   Black

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Alex   Black
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International issues weigh on pig markets

Pig meat production in the European Union, including the UK, has been growing over the last year which meant it was ‘unsurprising’ producer prices were currently about seven to eight per cent lower than last year, said Quality Meat Scotland (QMS).

 

Production

 

In response, producers were trimming productive capacity, with the mid-2018 census results showing a one per cent reduction in the breeding herd and a seven per cent drop in gilts intended for future breeding across Europe.

 

QMS director of economic services Stuart Ashworth said Scotland and England also showed small declines in the breeding herd, but growth in Scottish gilts intended for breeding.


However, he stressed that it may well be into 2019 before this reduced breeding herd across Europe leads to reduced slaughter numbers, as previous growth in production has to complete its production cycle.


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“June census results from England and Scotland also suggest that short term supplies of pig meat are likely to begin to tighten up through the autumn.

 

“European production may take a little longer to turn down as the consolidated mid-year census result across Europe showed growth in the number of fattening pigs on farms,” he said.

 

Global

 

As 17 per cent of EU pig meat was exported, international tensions also hits markets. Farmgate rises last year were on the back of increased exports to China.

 

The actions of other countries can have a profound effect on the global market said Mr Ashworth.

 

Russia has banned EU pig meat imports for an extended period and have also banned imports of Brazilian pig meat over concerns about the use of feed additives, leaving Brazil looking for alternative markets including China and increasing competition.

 

China has also recently increased tariff rates on US pork potentially displacing US pig meat onto a global market.

 

Meanwhile the presence of African Swine Fever (ASF) in several EU member states has resulted in some markets excluding all or part of EU pig meat from their market to reduce the risk of transmission of ASF to their domestic pig herds.

 

Although China has been reporting many ASF cases of its own, it has restricted imports from parts of Europe affected by ASF, most recently Belgium, and so during 2018, EU pig meat exports to China have reduced.

 

“The changing dynamics of international trade due to a combination of animal health protection and wider trade disputes will have contributed to the pressures seen on the wider European farmgate pig price,” he said.

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