Pockets of improvement for EU pig meat consumption

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Last year was a somewhat mixed picture for household pig meat purchases in the key EU consuming countries.

Despite rising retail prices, processed pig meat products in particular recorded a positive performance, with growth in market value. Demand for fresh pork also showed signs of improving in southern Europe, but continued to struggle further north.

Both Germany and France recorded declining sales in both volume and value terms for fresh pork purchases in 2017. The decline in sales volume was particularly large for Germany, at over 6% year-on-year. This may reflect the increasing popularity of beef in the country, with sales volumes for this protein up 10% last year on 2016 levels. In contrast to pork, beef prices were slightly lower in 2017, and the improvement in the relative price competitiveness of beef may have aided sales.

Conversely, Spain and Italy both recorded growth in the value of the fresh pork market last year. The increase in Spain was driven by a 3% rise in average retail prices, as sales volumes remained largely stable. However, in Italy the market value was boosted by greater sales volumes, as well as higher prices. Improved economic conditions may have helped boost sales, with Italy now recording four consecutive years of disposable income growth.

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In contrast to fresh pork, processed/charcuterie products recorded value growth in Northern Europe as well as Spain. Higher average retail prices supported the increase in market value across the member states, however Germany and Spain also recorded higher sales volumes. The fact sales volumes have been increasing, despite rising prices, suggest demand for processed products has been good.

Looking forward, with EU pig meat production likely to increase somewhat this year, it will be interesting to see how domestic demand develops. Good demand from the processed meat sector, and from Italy, the second largest EU consumer, could help absorb any additional supplies. However, unless demand can be stimulated from other EU markets, the risk of an oversupply situation remains. This is particularly the case as third country export markets are expected to be highly competitive this year. As such, EU prices at the wholesale, and ultimately farmgate level, might experience downward pressure this year, relative to 2017, in an attempt to stimulate EU consumption.

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Bethan Wilkins, Analyst

bethan.wilkins@ahdb.org.uk, 024 7647 8757