Diseases have a major impact on pig market

In the context of the 10th anniversary of Boerenbusiness we take a look at the development of the agricultural sector over the past 10 years. This time the pig sector is discussed. What have been the current events over the years and how much has the number of pig farms stagnated?

Recently, the coronavirus has caused a lot of tension in the pig market. The lockdowns in many different countries and the forced closure of slaughterhouses due to corona infections among staff members did not help the pig sector. In the United States, millions of pigs were culled because pig farmers had nowhere to put them. Sales opportunities in the Netherlands have also declined sharply, which has resulted in a higher supply of pigs and lower prices.

Chinese interest
The pig sector is currently in tension as a result, but in general Dutch pig farmers have built up buffers from a good year 2019. Pig prices were unprecedentedly high at the time because Chinese demand for pork could be greatly benefited. This is because the Chinese pig herd has decreased significantly after outbreaks of African swine fever in 2018.

With the good yields realized in 2019, pig farmers were able to compensate for the lower yields in 2018. For sow farmers in 2018 there was even the highest loss since 2001. The loss was at that time due to lower yields due to sharply lower piglet prices, in combination with higher costs.

In 2018, piglet prices were about 30% lower than in 2017. Fattening pig farms did somewhat well, but sow farms and closed farms lost a lot of liquidity and were even in the red on the current account. This was again seen as a big contract with the revenues of 2017, which was another good year for the pig sector.

Fear of African Swine Fever
The African swine fever in China has therefore benefited the European pig sector due to its significant export importance, but African swine fever is also a major threat at the same time. Between 2016 and 2020, the disease struck hard in Africa, Europe and Asia.

The Netherlands had an outbreak of the virus in 1986, but has been free of the highly contagious disease for some time now. However, there is a strong fear of repetition. At the end of 2018, the virus was found among wild boars in Belgium, but the country is still free of the virus in pigs kept. Since April 2019, the situation among wild boars has also been stable and the last infestation on a fresh cadaver was found on August 11, 2019.

This does not make the fear of the virus disappear, given that Poland is also struggling with infections among both wild boars and domestic pigs. A fence has now been built on the German-Polish border to prevent infections via wild boars.

Declining meat consumption
Public opinion is also playing an increasing role in the pig sector. Consumers today are much more concerned with the products they consume and where these products come from. There is more often a switch to organic products and meat consumption is also decreasing due to replacement by vegetarian products.

According to research by Wageningen University (WUR), the average Dutch person ate about 2005 kilograms of meat per year in 76,7. The majority of this came from pork consumption, which amounted to 37,2 kilos per year and thus accounted for almost 50% of total consumption. In 2010, pork consumption increased slightly to 37,7 kilograms per year. Since then, consumption has fallen and in 2015 the counter stood at 36,6 kilos per year. The most recent figures are from 2018 and for the first time show a slight increase from 0,1 kg to 36,6 kg per year.

Smaller sector
Over the years, the sector has become smaller and smaller. According to CBS data, in 2010 there were a total of 3.220 pig farms in the Netherlands. In 2019, the counter stood at only 2.090 pig farms. The number of pigs has also generally decreased in recent years. In 2019 there were still approximately 12,1 million pigs in the Netherlands, which means that the herd has stagnated by 2% compared to the previous year.

At the beginning of this year, Johnny Hogenkamp, ​​a well-known face in pig farming, also announced that he would stop his company. The company has since been for sale and the asking price has since dropped. Originally, the company was priced at €5,3 million, but the company is now being offered for €2.95 million.

Now that many pig farmers who have registered for the stopper scheme are also eligible for the subsidy, it is expected that the sector will continue to shrink. How many pig farmers will actually stop and what this will do to the number of pigs remains to be seen.

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