Farming: Warning of soaring price of pig meat as output set to slide

A WARNING was issued this week that falling pig production in Europe could lead to a rise in prices, especially in Britain which is a net importer of pig meat.

The warning came from the National Pig Association which has just carried out a European wide survey on pig producers' intentions in the coming years. The results predict a 15 per cent fall in output or approximately three million tonnes less pork and bacon in the European Union in the next three years and that is an optimistic view according to the NPA.

Barney Kay, general manager of the NPA, warned that the falls in output would mean higher prices at the retail end, particularly for countries that are net importers of pigmeat. His advice was "British retailers and processors should start working more closely with British producers to improve their supply chains".

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The NPA forecast, he said, was the first serious attempt in Europe to analyse the effect of a number of bearish influences on pig production all of which will come to a head over the next three years.

These include current low pig meat prices, high feed costs, the European stalls ban which is due to come fully into force in January 2012, currency volatility and even nervousness among banks about the sustainability of continental pig production.

All the main pig meat-producing countries were surveyed, particularly Denmark, Germany, France, the Netherlands and Poland, who account for more than two-thirds of EU pigmeat.

The results show that many continental pig-keepers have been producing at a loss for nearly half a decade and are poorly placed to survive the next three years. At least a third will have difficulty converting from their current sow stalls to loose-housing when the stall ban comes into place in 13 months time.

Kay commented that it costs over 400 per sow place to convert to loose-housing and the 1999 stalls ban in the United Kingdom caused the national herd to almost halve during the following ten years.

"In making our forecast, we have been at pains to study relevant data-sets and to survey producers and producer representatives in the main pig-producing countries of the European Union," said Kay. "We have also considered the views of European Commission officials and revisited our own data on the effects of higher feed costs and converting from stalls to loose-housing.

"Nevertheless, we acknowledge we may have understated the problems facing the European industry, because many continental producers do not know themselves yet whether they will convert to loose-housing by January 2013, or cease production, or continue to use stalls and hope to avoid detection."Their decision will be influenced by several factors, including the size of next year's wheat harvest, exchange rates, the economic outlook for the eurozone, and the attitude of banks to lending money."