October 3, 2003

 

 

EU Raises Forecast on Pigmeat Prices

 

The European Union's Pigmeat Management Committee has released revised forecasts for the third and fourth quarters of this year.

 

The new data reveals tighter than expected supplies during the second half of the year, reflecting lowering of productivity from the summer heatwave lower numbers of slaughter pigs available in some EU states.

 

As a result, the Pigmeat Management Committee forecast that average EU prices in the third quarter of this year will be up to five per cent higher than the original forecast of EUR1.28/ kilogram (88p) to between EUR1.33-EUR1.35/kg (92p-93p), while prices during the final quarter of the year are also expected to be slightly higher than the EUR1.26/kg (87p) previously forecast.

 

During the first half of the year, total European Union production is estimated to have increased by 1.3 million head on corresponding 2002 levels, to more than 100 million head, while average EU prices during the same period fell by almost 10 per cent, to just over EUR1.25/kg (86p).

 

Denmark recorded the largest price fall of almost 20 per cent on year-earlier levels, to less than EUR1.10/kg (76p). Declines too were recorded in all the other Member States but Italy, where average prices increased by just over two per cent, to EUR1.47/kg. Irish prices during the January-June period were five per cent lower than 2002 levels, at EUR1.23/kg (85p).

 

Tighter than expected supplies of slaughter pigs since the beginning of July have contributed to the significant price increases. Since the start of July, average EU pig prices have increased by almost 11 per cent, to just under EUR1.44/kg (99p), reflecting higher prices available in most Member States.

 

In France, where productivity was affected by the heatwave, average prices have increased by almost 22 per cent since July. In the Netherlands price increases edged almost 15 per cent higher due to tighter domestic supply situation in lieu of an ongoing restructuring scheme and the export of many live pigs to Germany, where prices are also currently more than 15 per cent ahead of prices at the beginning of July.

 

Meanwhile, Irish price increases have been less than elsewhere in Europe. Since July, prices in Ireland have increased by just over three per cent, to almost EUR1.30/kg (89p). However, during the same period, prices in the United Kingdom, the Republic's main export market, have fallen by just under 10 per cent since the start of July and thus returns for Irish exports have been hindered.

 

For the second half of the year, the Pigmeat Management Committee forecasts that supplies will decrease by more than 1 per cent on year-earlier levels, to less than 102 million head and, as a result, average EU prices are expected to remain relatively steady at higher than previously forecast levels.

 

Feed prices will be correspondingly higher, so that any increase in revenue for pig producers due to high prices will be severely undermined.