French pig price lags behind the rest

France is the country of wine and cheese, but the French also have a serious pork sector. In terms of animal numbers (12,7 million), the French pig sector is even the third largest pig country in Europe; after Germany (27,3 million) and Spain (29,2 million). However, in terms of payout price, the French have been below the level of neighboring countries for years.

During the summer months, French pig farmers were paid considerably lower than their German and Spanish colleagues. In June, the French pig price was €0,12 per kilo behind the Spanish price and €0,17 behind the pig price in Germany. There was also a significant price gap in the months that followed. It is a trend that has been going on for years.

The French pork price averaged €2017 per kilo in 1,37, about 6% higher than the previous year. This price increase is considerably lower compared to countries such as Spain (+8,5%) and Germany (+11,5%). In the Netherlands, Vion recorded an average of €1,62 per kilo this year (+11,7%). In terms of cost price, the French (€1,42 per kilo) score more favorably than the Netherlands (€1,50), according to figures from InterPIG.

(Text continues below the chart)In 2017, the pig price in France was well behind that of Germany. 

Little export in Asia 
The FRSEA, a farmers' union in France, has been fighting for years against what they consider to be a worrying observation. By acting together as producers, an attempt is made to form a front against the purchasing parties. So far there has been a lack of success. French retail chains repeatedly demand cost-increasing measures, hiding behind consumer wishes. However, financial compensation for this is not forthcoming, to the frustration of French pig farmers.

Where the lower payout price comes from is France's limited access to third markets. This is important for the square value of the pig carcass. France exports much less to China, the world's largest pork market, than other European countries. In the period from January to October, France exported 42,302 tons. Compared to the exports of Denmark (75,334 tons) and the Netherlands (72,028 tons), this is disappointing. France also produces little volume in other Asian countries.

The lagging exports in China are due to the fact that France has a relatively large number of slaughterhouses without an export license. France has about 1.000 slaughterhouses, several of which have a regional character. It was recently announced that more French slaughterhouses will be allowed to export to China in the short term. This may cause the export volume to China to increase slightly. In 2017, France exported only slightly more than the United Kingdom (UK). This is despite the UK's pig herd being around a third of France's.

Inland saturated
Last December it was announced that two pork producer cooperatives (Aveltis and Prestor) would merge. Aveltis, the second largest pig cooperative in France with 2 million pigs per year, is merging with Prestor. Prestor is reportedly the third largest cooperative; with 2,9 million pigs annually. The merger will likely be completed next summer. It is done to appear stronger internationally.

The need to sell French pork on the world market is also increasing. This is because domestic consumption of pork has been declining for years. Regional products are used to try to get consumers interested in French pork. At the same time, the French meat sector is struggling with image damage due to abuses in slaughterhouses. Therefore, no growing meat consumption is expected domestically.

The question for the coming years is whether France will succeed in selling pork more widely on the world market. If so, the size of the pig herd may remain the same. If not, it is likely that the pig sector in France will shrink further. Until 2006, France had more than 15 million pigs. With older production techniques, there will have to be a financial incentive to stop this downward trend. The next price drop will most likely result in a new round of stops.