The Commission is publishing today its short-term market outlook for arable crop, meat and dairy markets in the EU. The EU pig meat production is expected to decline in 2013 (-2%). The sow herd continues to decrease (-3.2% in December 2012 following the -3.6% drop in December 2011). According to the notifications from the member states to the European Commission, around 80% of the sow herd is kept in compliance with the animal welfare requirements. After two consecutive years with declining pigmeat production, this is expected to slightly recover in 2014 (0.9%) due to productivity gain in sow herd and expected lower feed costs.
Following the production drop, exports are foreseen to decline by around 14% in 2013, and to recover slightly in 2014. EU pigmeat imports are always marginal, and would settle at 16-17 000 tonnes per year. Lower supply in 2013 would lead to a decrease in total consumption by -0.8% but once production recovers in 2014, consumption would follow the same path. Per capita consumption is foreseen at around 40 kg.
Throughout 2012, producers' margins have been squeezed due to cost pressures associated with high feed prices, and this situation is likely to persist until the 2013 harvest becomes available. In January 2013, the price for pig meat stood at €170/100 kg (+13% compared to the 5 year average).
On the other hand, increasing autumn sowings could help relieving market tightness. Autumn sowings increased overall for cereals and oilseeds and weather conditions remain favourable, creating expectations for a slight relief in the marketing year 2013/14. These developments occur against the background of a 2012/13 cereal usable production of 272 million tonnes (-4.7% against the year before), which tightened the EU cereal balances and resulted in a low stock-to-use ratio of 11.6%. Feed costs would remain the main driver affecting the meat market, although their current high level could improve with a higher harvest.
Monday March 11, 2013/ European Commission/ European Union.