September 19, 2008

Swine industry in Poland continues to suffer

Inefficient production and high feed prices have significantly weakened the Polish pork sector, according to a report by USDA.

Inefficiency in pork production in Poland means that the Polish pork industry is unable to compete with other more integrated pork industries across the EU.

Poland is currently importing more pork than it exports. According to the Institute of Rural Economics (IRE), in the first 6 months of 2008 Poland imported 190,600 million tonnes of pork as compared to 107,800 million tonnes in the first half of 2007, exports rose from 155,700 million tonnes in the first half of 2007 to 186,900 in the same period of 2008. Most imported pork comes from Denmark (105,000 tonnes in 2007), with Germany and the Netherlands also exporting large amounts of pork to Poland.

According to statistics, swine inventories in Poland were 15.7 million hogs as of March 31, 2008, the lowest in 25 years.

Costs in hog production are expected to remain high in 2008 due to high feed prices and the inefficient structure of the Polish swine industry. In the first six months of 2008, a negative balance in value of trade between Poland and the EU-15 countries tripled compared to the same period in 2007.

A report by IRE estimates that pork production will drop 12 percent in the second half of 2008, and in the first half of 2009, production will be down another 10 percent. The IRE forecasts that a 3-percent increase in pork production will be seen in the second half of 2009.