Deceber 5, 2003



1st Half 2004 Pigmeat Production in EU Seen To Drop Further

A marginal decline in European Union pigmeat production during 2003, to just over 17.7 million tons, has been forecast.


Consumption is forecast to remain relatively steady, at 16.56 million tons, while exports are expected to decrease by more than 2% on 2002 levels, to more than 1.21 million tons, reflecting the increasingly-competitive global pigmeat market.


During the first half of 2004, production is forecast to decreased further, reflecting the tighter supply situation that is expected, according to the EU Pigmeat Forecasting Group.


During the first quarter of 2004, total supplies increased by nearly 2% on corresponding 2002 levels, to just over 51.4 million head, reflecting the increased supply situation in both Denmark and Spain.


However, tighter supplies for the remainder of the year, particularly in the final quarter will mean that total EU pig throughput during 2003 will decrease, by almost 1% for the year as a whole, to 202 million head.


In the October to December period, supplies are forecast to decrease by almost 3%, or 1.4 million head, on year-earlier levels, to nearly 52.7 million head, reflecting the reduced sow productivity caused by the very hot weather on the Continent during the summer and the lower availability of slaughter pigs in some Member States.


With the exception of a small increase in supplies forecast to occur in both France and Italy, lower supplies are forecast for all the other major pig-producing countries.


The most significant decreases during the period are forecast to occur in Holland and the United Kingdom, where total supplies are expected to drop by nearly 13% and 9% respectively.


In Germany, the largest EU pigmeat producer, throughput during the final quarter of the year is projected to fall by more than 2% on year-earlier levels, to 10.45 million head.


Similarly, Spanish supplies are forecast to be two per cent lower than year-earlier levels while a marginal decrease is also forecast in Denmark.


The lower supply situation that is projected for the final quarter of the year is forecast to continue during the first half of 2004.


For the January to June period as a whole, supplies are expected to be almost 1% below corresponding 2003 levels, at less than 100 million head.


Reduced throughput levels in Spain, Holland and the UK are likely to offset increased production in Germany, Denmark and Italy.


Spanish pig supplies are forecast to decrease by more than 4% during the January to June period, while supplies in Holland and the UK are likely to fall by more than 4% and 3% respectively.


Given the tighter supply situation that is forecast to occur during the first half of the year, the Forecasting Group anticipates that average EU pigmeat prices will increase by just over 6% on corresponding 2003 levels, to just over EUR1.33/kg (92 pence/kg) deadweight.


However, increased production costs, especially increasing feed costs, are likely to restrict market returns for producers.

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