Prospects for 2014 indicate an above average EU cereal harvest for the second year in a row (and a record level of cereal exports for marketing year 2013/14), according to the Commission's Summer 2014 Short-Term Agricultural Outlook published today. Given the export performance, only a partial recovery of the cereal stock-to-use ratio is expected. After two years of tight supply, EU meat production is expected to grow again. The mild economic recovery in the EU raises the prospect of increased meat consumption, but meat exports are seen as likely to decline, with pig and poultry meat being the most affected sectors, following growing uncertainty in some of the most important trade partners.
The cereal outlook indicates an above average 2014 harvest for the second year in a row, and a record level of cereal exports for marketing year 2013/14.
Consolidated figures for 2013/14 confirm an above average cereal harvest of 302 million tonnes, supporting a record level of exports expected to reach 42 million tonnes. As a consequence, carry-over stocks are limited and the stock-to-use ratio is expected to recover only partially from 10 to 12%. The new harvest in 2014/15 is expected to be above average for the second year in a row and reach 303 million tonnes.
Pig meat production starts picking up slowly after 2 years of tight supplies
Following the compulsory introduction of the welfare rules for breeding sows by December 2013, the 2013 number of breeding sows was still 1.6% below 2012 at 15.2 million heads. Declines in Germany (-3%), France (-3.1%), Poland (-5.6%) and Italy (-5%) were partly offset by increases in the Netherlands (+1.3%) and Denmark (+2.4%). The implementation of group housing for sows and the low profits of last years translated in a shortfall in the number of piglets going into production, with high prices for piglets recorded at the beginning of the year, peaking at 54 EUR/head in April (9% above the 2012-13 average).
The Russian ban on EU pig meat introduced after the discovery of a few cases of African Swine Fever in wild boars close to the border with Belarus added uncertainty on the market.
Against this background, pig meat production in 2014 is anticipated to increase only marginally by 0.2%, with higher supplies in Denmark and the Netherlands expected to compensate for potential drops in France, Germany and Spain. Provided that market conditions will improve next year, production could recover at a slightly stronger pace in 2015 (+0.8%).
In the first four months of the year, shipments to Russia decreased by 80% compared to last year; however the strong Asian demand limited the decrease of total EU exports to 16%. The reduction in the US supply in 2014 following the Porcine Epidemic Diarrhoea Virus outbreak has contributed to the increase in the demand for EU pig meat coming from the Asian markets (China, Japan, South Korea, Hong Kong, Singapore or Philippines).Nevertheless, given that Russian volumes account for one third in total EU exports, the strong Asian demand is not expected to fully compensate for the sharp drop of exports towards Russia and over the whole year the EU exports are expected to fall for the first time in several years (-7% compared to 2013). Given the uncertainty related to trade developments with Russia, EU exports of pig meat are currently estimated to recover only marginally in 2015. Without agreement of Russia on the regionalisation system implemented by the EU, EU pig meat exports might be further affected.
There is currently a relatively good demand for pig meat throughout the EU with prices 5% below the 2012-13 average at 164 EUR/100 kg; thus 2014 consumption is likely to slightly recover from the 2013 low (31 kg/capita) to finally reach 31.4 kg/capita in 2015 (in retail weight).
Pig offal exports
Around 1 million tonnes of pig meat offal are exported to destinations outside the EU, with five EU countries accounting for more than 80% of total offal exported (the Netherlands, Spain, Germany, Denmark and France). An increasing share goes to China including Hong Kong: from around 40% in 2005 to almost 70% in 2013 while the share to Russia is steadily decreasing (from 35% to 10% over the same period).
Monday July 7, 2014/ EC-Directorate General for Agriculture and Rural Development/ European Union.