Short-term outlook for EU arable crops, dairy and meat markets published

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The EU Commission recently published its Short-Term Outlook for EU arable crops, dairy and meat markets in 2017 and 2018. Here we will highlight some of the key points for the pig meat market.

For pig meat, the EU Commission is forecasting a 0.6% decline in production between 2016 and 2017 to 23.4 million tonnes (cwe). The December 2016 survey reported an annual decline of 2% in the EU breeding herd, with production for the first quarter of 2017 falling by 1.4% on the year. However, the recent rise in EU pig prices is expected to have incentivised producers to increase output. Looking ahead to 2018 and pig meat production is pegged to remain relatively stable on 2017 levels at 23.5 million tonnes (cwe).

While export demand for EU pig meat continued to rise during the first quarter of 2017, driven predominantly by China, it has started to tail off. Total pig meat exports in 2017 are projected to fall by 9% on the year to 2.5 million tonnes (cwe). A combination of higher EU prices and tight supplies, plus a fall in overall Chinese demand, amongst other factors, contributed to the overall projected decline. Nonetheless, EU consumption of pig meat in 2017 and 2018 is expected to rise marginally on the year to 31.8kg and 31.9kg per capita respectively (31.7kg in 2016).

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On average, the EU population is expected to grow marginally (0.3%) in 2017-18. However, projections differ considerably between member states. In terms of currency, the latest outlook forecasts sterling to stabilise against the euro in the remainder of 2017 and 2018. This follows a sharp depreciation in the value of sterling in 2016 and further falls in the first half of 2017, driven by the outcome of the EU referendum and Brexit negotiations.

To read the full report, click here.

Rebecca Oborne, Analyst

rebecca.oborne@ahdb.org.uk, 02476 478631