EU supplies set to be stable but prices low
Latest forecasts suggest that pig slaughterings across the EU are set to remain close to year earlier levels through the rest of 2014 and the first half of 2015. However, the relatively tight supply situation may not be sufficient to provide much support to prices.
According to members of the EU Commission’s working group on pig meat forecasts, which met yesterday, pig slaughterings across the EU are set to remain close to year earlier levels through the rest of 2014 and the first half of 2015. The group’s figures suggest a small year-on-year decline through the remainder of this year, despite census results from June showing a modest increase in pig numbers. Furthermore, throughputs in the first half of 2015 are forecast to be only marginally up on the same period this year. Most of the major producing Member States are forecasting little change in production levels. German output, for example, is forecast to track slightly higher than a year earlier, while Danish slaughterings may fall, despite higher piglet production, as weaner exports continue to rise.
However, the relatively tight supply situation may not be sufficient to provide much support to prices. Having previously had only a modest effect on prices, the Russian ban on imports of EU pork is now beginning to bite. With freezers and cold stores reported to be full of supplies which might previously have been sent to Russia, demand for slaughter pigs has fallen. The autumn was previously the peak season for exports to Russia and so a small year-on-year increase in pig numbers in September was enough to cause prices to start falling sharply. Further falls are anticipated, with the group forecasting that the EU average price during the last quarter of this year and the first three months of next year will be below €140 per 100kg. If realised, these would be the lowest quarterly averages since the final three months of 2010. Only a modest recovery is expected during the spring, with prices set to remain well below this year’s levels.
Further analysis of the forecasts and their implications for the EU market going forward will be published in the next few days.