Meat & Livestock News

EU Pork Market: Will Current Market Steadiness Last the Year?

TL;DR: EU pork production grew by 5% in early 2024, driven by Spain, Germany, and Poland. Prices are stable, with minor fluctuations. France saw the largest price increase, while Denmark and the Netherlands experienced declines. Stable demand is expected, but potential shifts and feed prices could pressure the market. Exports fell, and further declines are predicted for 2024.

Production

In the first two months of 2024, the EU pork production totalled over 3.7 million tonnes. This marked a 5% growth compared to the same period in 2023. Spain, Germany, and Poland drove this increase.

Production gains were linked to higher slaughter numbers. Spain saw a 3% increase from 2023, reaching 9.7 million head in 2024. Germany and Poland had year-on-year growth of 5% and 11%, respectively, achieving 7.5 million head and 3.3 million head.

Among the top six producers in the EU, Denmark alone reported a decline in production. It fell by 2,610 tonnes from 2023. Similarly, slaughter in Denmark decreased by 190,000 head (7%) from the year to 2.6 million head. However, Danish statistics on 1 April 2024 showed a nearly 7% increase in the total pig population compared to the previous year. This increase should be viewed against a low base in 2023. Comparing the data to 1 January, there was a modest 0.7% rise, indicating stability.

Prices

EU Grade E pig prices have shown relative steadiness recently. Average pig prices rose from early 2024’s lower levels when weak demand drove prices down. For the week ending 5 May, the EU average was 187.11p/kg, with the market in balance. Despite some weekly fluctuations, the value stayed between 187 and 188p/kg for the last six weeks, up almost 4p since the start of the year. The difference between UK and EU prices is now 21.8p/kg, returning to usual trends after a larger gap at the beginning of the year and a narrow 2023.

France recorded the largest growth in pig prices since the year began, up 21.5p. Spain saw the second-largest increase, up 14.1p, while Poland, Germany, and Belgium had smaller gains of 5 to 7p. Denmark and the Netherlands, however, lost 9.9p and 13.4p, respectively.

If EU demand stays stable, as predicted by the European Commission’s latest outlook, current pricing should remain supported. However, any shift in consumption could pressure the market.

Short-Term Outlook

The December 2023 survey showed a 170,000-head increase in breeding sow numbers, indicating recovery after three years of decline. However, the number of fattening pigs is down year on year, likely to last through the first half of 2024. Feed prices softened in 2023, bringing some optimism. Yet, poor weather in Europe could pressure feed prices in the second half of the year. The ASF (African Swine Fever) situation is expected to remain stable throughout 2024, leading to a slight overall decline in expected pig production by 0.4% for the year.

Exports and Imports

Higher prices compared to key competitors like the USA and Brazil hampered EU pig meat exports, falling nearly 25% in 2023. If domestic high prices continue, the European Commission predicts a further 4% decline in export volumes in 2024.

Given the UK’s fall in production, EU imports from the UK dropped by 25%. In 2024, EU imports are expected to remain low and decline further by 2%, with no short-term replacements from other origins. These factors, along with steady consumption and lower exports, could lead to higher available supplies within the EU.

The EU pork market shows signs of steadiness but faces potential challenges. Production increases in key countries and stable prices suggest a strong start to the year. However, factors like feed prices, ASF, and export dynamics will shape the market’s future. Careful monitoring of these elements will be crucial to understanding the market’s direction for the rest of 2024.