Collapse in EU swine prices seen in 2009

EU pig prices are projected to fall at least 4 percent in the first quarter of 2009 and two percent in the second quarter.

The decrease in production is affecting finished pig supplies, helping however to shove EU pig prices so far to 3 percent ahead this year from yearago levels.

The most significant falls in production are seen in Poland, the Czech Republic and Hungary, where production in the early part of 2009 could be down by as much as 20 percent. This increases their import demand, especially for cheaper cuts. Significant pig herd reductions will also be evident in Spain and Denmark, as British pig numbers have also been in steady decline over recent years. In their latest summer census, the number of replacement gilts had fallen 12 percent, indicating that further contraction is expected.

In 2009, British finished pig supplies are forecast to fall by 4 percent, mostly evident during the first half of the year.

Profitability for EU pig farmers improved in 2008 but the weakening economic climate has affected demand. Projections for 2009 suggest that demand from the major importers, Russia and Japan will ease.

In February, Irish producers got EUR1.37 per kg of carcass, allowing a profit margin over feed of EUR0.41 per kg.