Past, present and future of pig production
Stephen Howarth from the Agriculture & Horticulture Development Board (AHDB) and Albert Vernooij from Rabobank outlined the past, present and future of the pig industry at the Eblex Outlook conference last Wednesday (13 February).
2012 has been a difficult year for UK producers, with high pig prices, but even higher costs, according to Howarth. The high levels of sow cullings have suggested a herd decline and the EU prices are volatile as supplies tighten.
Howarth presented figures from the latest market development, with regards to supply and demand, production, slaughtering and the trade. He forecast that production will fall by 2% in 2013 and that EU production has gone down, which is why imports are bound to drop.
Although the cost of production remains the same, he explained: "In the last quarter of last year, prices for pigs reached a record high, particularly in December." Prices of feed costs, on the other hand, are quite unpredictable.
Supply in the first month of 2013 was high, indicating there was no shortage and there are plenty of British pigs coming into the system.
Imports and exports in 2012 were both similar to the year before, but 2012 saw a switch to processed meat imports. Fresh pork purchases were slightly down last year, and bacon did better, but there was no significant change with regards to the previous year. "There are no fundamental changes in supply and demand," said Howarth.
In sliced cooked meats, ham did remarkably well, especially during the summer months.
"Cull sow prices have been falling rapidly since November," explained Howarth. British sow prices have further decreased and fallen behind German prices, which is unusual considering they are normally at the same level.
2012 saw clean pig slaughterings rise above 10m, which is the highest it has been since 2002. Sow slaughter was at an abnormal level in the third quarter of last year, however, it is expected to go back to normal again this year.
"We cannot ignore what is happening in the EU with regards to our trading position," said Haworth. There has already been a drop-off in EU slaughterings, which began at the end of 2011. This decline happened previous to the rise in feed prices and the recent EU legislation that bans sow stalls. There is a tighter supply from the EU, which means the UK will now import less.
Vernooij outlined the global pork developments, the EU position and the implications for the EU pork industry. He claimed that the main swing factors for the global pork industry 2013 were the development of pork demand, feed costs, China and Russia’s appetite for imports, export development in the US, and the impact sow pen regulations will have on EU production and export.
In China, he explained, "prices are not positive", as there has been a drop in pig production. Further, Vernooij claimed that prices in Russia are fairly low at the moment.
He predicted 2013 to be a good year when it comes to prices, claiming they will remain high throughout the year. However, exports declined in 2012 and there are no signs of turnaround in 2013.
With regards to the sow stall ban, Vernooij said there were rumours in the industry that some farmers may not be as compliant as they claim to be, because there have not been official checks on each and every abattoir. He further stated that the impact of the sow stall ban may not be seen until later on this year.
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