EU pork market set to become more reliant on exports
EU pig meat production is expected to show only marginal growth in the coming decade, according to the latest EU Commission Medium-term Outlook report.
The report includes the UK as an EU member for the whole time period, due to the high degree of uncertainty regarding when and in what manner Brexit will occur.
Annual output is projected to grow by merely 0.1% each year, on average, taking 2026 pig meat production to 28.9 million tonnes. Subdued domestic pig meat demand is expected to limit expansion. This year, increasing exports are estimated to have driven a 0.6kg drop in per capita pig meat consumption in the EU, down to 31.9kg/person. Over the next 10 years, this figure is expected to decline slightly further as consumers from core EU countries (EU-15) increasingly switch to poultry meat. Environmental concerns, leading to increasing legislation on manure management, are also anticipated to limit further increases in pork production.
With EU demand remaining limited, exports are expected to become an increasingly important component of the European pig meat market over the next decade. In 2016, Chinese demand has been key to driving EU pork exports to a record 2.7 million tonnes (carcase weight equivalent). This demand is expected to remain high in subsequent years but below current levels. Nonetheless, although EU exports are anticipated to fall back in the next few years, by 2026 volumes are expected to reach 2.8 million tonnes. Alternative Asian markets such as Japan, South Korea and the Philippines will be key to this growth.
Though increasing export demand has had a positive impact on prices this year, sustained price competition from the USA and Brazil is expected to limit further growth over the outlook period. To read the full Medium-term Outlook report, which also includes projections for other farming sectors and analysis of potential impacts of greenhouse gas emissions targets on agricultural markets, click here.
Bethan Wilkins, Trainee Analyst
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