November 27, 2007

EU hog numbers seen to drop in mid-2008

Despite high production this year and a steady outlook in the first few months of next year, the

European Commission sees a decline in mid-2008 due to likely exit of many swine farmers from the business over high production costs.

Shortages will arise around the summertime coupled with much higher prices than this year, according to the Commission.

A large reduction in pigs is expected in Poland (4.3 percent in the first quarter) as many small producers will probably go out of business on high feed prices and the correspondingly low returns. In contrast, in West Europe, pig producers are generally operating on a larger scale and are more specialised to combat low yields.

According to the Dutch Product Board for Livestock, Meat and Eggs (PVE), the entire EU pig supply will amount to 206.5 million pigs in 2007.

A drop of 0.5 percent is expected in the first half of the New Year. Germany, which is the main trading partner of the Netherlands, will experience a fall of around 2.5 percent in the third quarter of 2008.

In addition, a reduction of 2.1 percent to 6.6 million pigs in the first quarter of 2008 is predicted for Denmark compared to the same period in 2007.

Supply in the remaining EU-27 will drop a little, except for in Romania, where an increase in production of 25 percent is expected.