The European Union’s pork/pork variety meat exports maintained their strong pace in August, increasing 10 percent from a year ago to 246,547 mt. The increase was driven mainly by continued growth to China (96,276 mt, +65 percent). August muscle cut exports to China more than doubled year-over-year, reaching 47,865 mt (+121 percent).
For January through August, EU exports were up 7 percent from a year ago to 1.849 million mt, led by larger exports to China (675,231 mt, +44 percent) and South Korea (159,479 mt, +25 percent), while shipments were lower for Japan (201,353 mt, -19 percent), Hong Kong (169,732 mt, -36 percent) and the Philippines (94,175 mt, -9 percent). Exports to the main Asian markets accounted for 76 percent of EU export volume, up from just under 60 percent during the same period in 2013, when the Russian market was open to EU pork.
EU hog prices decreased slightly during the first week of October, now back to mid-August levels at 1.43 euros/kg – steady with last year, but down 12 percent from the five-year average. In U.S. dollars, prices were $72.98/cwt, down 11 percent year-over-year. EU average hog prices have been higher than U.S. prices for the past six weeks, but the difference has narrowed to just 1 percent. Piglet prices are down 5 percent year-over-year to 33.78 euros/head, and down significantly from the five-year average, which is about 40 euros/head.
According to the European Commission’s latest outlook, EU pork production in the first half of 2015 was up nearly 4 percent from a year ago. Growth was widespread, with Spain (+9 percent) leading the way but increases also reported for Denmark, Germany, the Netherlands, Poland, Belgium, France and the United Kingdom.
Producer losses are finally starting to translate into smaller breeding herds, as the latest Commission survey showed that the number of sows (-0.7 percent) and gilts (-1.7 percent) decreased slightly for the EU’s main pork-producing countries. Spain was a notable exception to this trend, posting a 5 percent increase in its breeding herd.
Despite the breeding herd decline, piglet inventories were still up 1.1 percent in the first half of the year, which helps explain the EU’s sluggish piglet prices. So the Commission expects 2015 production to finish 2.7 percent (or 23.4 million mt) higher than a year ago, with a further modest increase of 0.5 percent expected in 2016 (note that USDA/FAS is projecting a slight decrease).
Per capita pork consumption in the EU is expected to increase to 32.7 kg in 2015 – up from 32 kg last year – and remain steady in 2016.
Sources: Global Trade Atlas, European Commission and USDA