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Pig market outlook

There was surprising unanimity among industry pundits who recently sought to plot a course for pig prices during 2016. All seem to agree that, following all the problems of 2015, there were still a difficult few months ahead, but there were also reasonable grounds for optimism that prices would begin a recovery in the second half of this year.

“The market will remain tough in the first few months of 2016,” said DAFC analyst, Karsten Flemin “but we’re quietly confident that we will see prices recover in the second and third quarters of the year.”

“Production of pigs in Denmark has now stabilised, but we are likely to see exports of piglets from Denmark continuing to rise. Taking the EU as a whole, sow numbers are already declining, but this will be offset to some extent by productivity improvements.”

“We have seen some decline in the consumption of pig meat across the EU and in 2015 the poor weather in the late spring and early summer meant the ‘grill season’ had a delayed start. Pig meat products traditionally feature strongly in the European barbecue trade, so let’s hope we see a return to more normal warmer weather conditions this summer.”

Although an early resolution of the EU trade dispute with Russia seems highly unlikely, it is anticipated that EU exporters will continue to do good business in the main South East Asian markets, especially China. The growth in US production appears to be slowing which may help EU exporters, many of whom recorded impressive sales increases to the Chinese market in 2015.

“In China, imports are expected to further increase, supported by strong domestic prices and further destocking of the herd in 2016, driven by stricter environmental regulations. The level of China’s imports and relative competitiveness of major exporters is a major dynamic in 2016,” reported Rabobank in their Q1 Global Pork Quarterly review.

The AHDB presented their 'UK Pig Market Outlook' at the recent 'Outlook Conference' in London. Despite the current difficulties being experienced by home producers, a modest increase in UK production of pigs and pig meat was forecast. Its review also highlighted a number of ‘wild cards’ that could easily confound carefully crafted forecasts, such as currency developments, outbreaks of animal diseases and fluctuating feed commodity prices.