Pork prices in the European Union continue to fall, declining 10 percent since early September, due to seasonally larger production and lower demand. Prices averaged $84.74/cwt in the most recent report, down 25 percent year-over-year in U.S. dollars and 19 percent lower in euros – the lowest since March 2011.
Denmark’s prices had been mostly steady since July but they also took a hit, losing 7 percent week-over-week to fall 17 percent below the year-ago level. Germany’s prices lost another 3 percent over the same weekly period and are now down 18 percent from a year ago. Year-over-year declines in other markets include Belgium, -24 percent; Spain, -22 percent; the Netherlands, -22 percent; France, -21 percent; and Poland, -20 percent. EU piglet prices fell nearly 10 percent over the past month and are now down 18 percent year-over-year to 37.68 euros (about $48) per head.
The U.S. premium over EU hog prices widened again, with U.S. prices 28 percent higher than EU prices during the last week of September. This matches the price spread reached March and July when U.S. prices peaked and EU prices were sluggish.
The European Commission’s short-term outlook projects that after two years of reduced pork production, a further 0.5 percent decline is expected for 2014. But the decline took place in the first half of this year and production has recently been showing signs of a recovery.
The Commission expects an 8 percent decline in exports this year, which would imply a much worse trend for September-December. From January through August, exports were down only 2.6 percent as growth to Asia and the United States nearly offset the loss of the Russian market. However, exports of chilled/frozen pork muscle cuts were down 6 percent, more closely reflecting the trend expected by the Commission. Steady exports are projected for next year, provided EU prices remain competitive and Asian demand is strong. Vietnam, which is reportedly opening to chilled/frozen pork imports from the EU, could be an additional growth market if plant certification and other issues are settled quickly.
Per capita pork consumption in the EU is expected to be steady this year at 31 kilograms, and projected to increase slightly in 2015.