EU pork production starts the year lower

EU pork production was 2.16 million tonnes in January (including the UK), with 22.7 million pigs killed, according to data from Eurostat. This is 1.9% (42,400 tonnes) less meat than was produced in January 2019. With slightly fewer working days across the bloc, also it represents a drop of 0.4% per working day.

Notable declines came from Spain (-1%, 3,400 tonnes) and Germany (-1%, 4,000 tonnes), the region’s two biggest producers. The biggest drops came in Italy (-10%, 13,000 tonnes) and Poland (-14%, 27,000 tonnes). These declines predate both the spread of coronavirus across Europe, and instances of African Swine Fever found on Polish pig farms in March and April. Both Denmark and the Netherlands posted an increase in production of 4,300 and 13,900 tonnes respectively.

The decline in production perhaps offered some support to European pig prices, which began to recover in February, before falling again in March. Since January, supply and demand fundamentals have been volatile. Supplying the Chinese market has been more difficult, although more recently there has been a gradual reopening. Despite this, lately the market has also had to cope with a wholesale switch in demand from foodservice to retail across Europe and a rush to supply pigs amid fears of possible processing interruptions.

Recent analysis from Gira indicates that pork demand in Europe could be lower by 3.5-4.5% in 2020 before recovering somewhat in 2021. Production is also expected to fall, but by less. Chinese demand will remain strong of course, which should continue to benefit the export market. However, questions remain about the logistical ability to ship the surplus pork that will probably come to the world’s market as a result of the coronavirus. Competition from US product will likely be an increasing challenge.

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