April 1, 2024

European swine prices experience volatility in early 2024

In the first 11 weeks of the year, European swine prices have witnessed notable fluctuations, reflecting shifts in supply and demand dynamics within the market, UK Agriculture and Horticulture Development Board reported.

During the initial five weeks, ending on February 4, 2024, prices experienced a significant decline, attributed to seasonal demand patterns, resulting in an average drop of 12p/kg. However, in the subsequent six weeks, ending on March 17, prices rebounded, registering a gain of 14p/kg to average 185.63p/kg. This recovery was fuelled by heightened demand and tightening supplies across key producing nations.

The surge in prices can be attributed to increased demand coupled with a sustained reduction in supply. In 2023, pork production in the EU hit a decade-low of 20.6 million tonnes, marking a 7% decline year-on-year, following a similar drop in 2022. This decline stems from reduced slaughter numbers, down by 7% compared to the previous year.

Projections for 2024 suggest a continued decrease in pork production, with the shrinking herd size showing no signs of recovery. As of December 2023, the EU's total swine population stood at 133.6 million head, the lowest since records began in 2001. This, combined with forthcoming environmental regulations, paints a bleak long-term production outlook, with the EU commission anticipating an annual decline of approximately 1% until 2035.

Throughout 2023, trade dynamics posed additional challenges, contributing to the tightening of pork supplies. EU exports of pork experienced a significant year-on-year decline, reaching their lowest volume since 2014, at 3.90 million tonnes. Concurrently, EU pork imports dropped to 146,800 tonnes, the lowest in over a decade, impacting market dynamics and driving prices higher.

The shifting market landscape has also affected the UK's market share in EU import volumes. Historically, the UK supplied 80-85% of EU pork imports. However, in 2023, this share declined to 71%, partly due to reduced domestic supply and intensified global competition. Meanwhile, import volumes from Switzerland and Chile increased, expanding their market share from 7% and 2% in 2022 to 11% and 8% in 2023, respectively.

-      UK Agriculture and Horticulture Development Board