European pig market in great uncertainty

According to Rabobank, the price would be the next months could fall even further, after which it could rise to a high level in the course of 2019. However, predicting this exact moment, height and duration is difficult, so writes the couch.

Low piglet price care for sow farmer
Sow farmers in the Netherlands have been confronted with low piglet prices for months. Feed costs have increased by approximately 7%. It ensures that the sow farming on balance. However, there are of course also sow farmers who can absorb this decline, mainly because they built up a buffer in the 2016/2017 season.

In addition, Rabobank reports that the average fattening pig farmer is not or hardly inbred. The current lower piglet prices compensate for the lower meat price and higher feed price.

Increasing competition from US
European companies are experiencing more competition from the Americans in the Asian market. The American market share to South Korea in particular has increased: from 35% to 40% in the first 8 months of 2018. In the same period, Korean meat imports increased by 25% to 439.000 tons.

Pork production in the USA (US) will increase to more than 2018 million tons (+12%) in 4, according to Rabobank. It is expected that the increase in production will continue in 2019, mainly because the sow herd increased significantly in September. The US suffered significant declines in pork prices for a long time, but the market is now rebounding due to the outbreak of African swine fever in China.

Russia continues to grow
Another competitor is Russia. Pork production in this country is increasing sharply. This is expected to grow by 2018% to 3% in 5, before reaching 2019 million tons in 3. The 20 largest companies account for 62% of production. 

Rabobank expects that the smaller companies will slowly disappear, partly to eradicate African swine fever. Rabobank also says that Russia is likely to become self-sufficient in a short time and will increasingly focus on exports; The Asian and African markets in particular attract Russia's interest.

In addition, Brazilian pork production also increased by 2018% in the first half of 5. However, according to Rabobank, this increase will not continue in the second part of 2018. Production will be around 3,7 million tons. After the loss of the Russian market, the country focused exports on China and Hong Kong. It resulted in a doubling of volumes.

China plays an important role
Recently, many outbreaks of African swine fever have been reported in China. This will have an effect on production in the country in the coming years. Rabobank expects that the country's pig sector will transform into a fully integrated production, which means that millions of small backyard farms and family businesses will disappear in the coming years. 

Initially this will cause a decrease in production, after which the before will be significantly increased. Rabobank expects these figures to exceed 2016 volumes. Future demand also offers perspectives. What is difficult to estimate is whether Chinese imports only relate to the demand around the Chinese New Year, or whether it is a harbinger of a decline in production.

However, no one knows how China will deal with the offer from the US or Russia. In addition to the demand for pork, other types of meat can also benefit from exporting more to China. In short: the changes in the Chinese market have an influence on other players on the global market.