EU pig prices have continued to fall in January

Pork

EU pig prices faced further pressure through January with the EU 27 average for Grade E reference prices falling 11p/kg in the 4 weeks ending 28 Jan, according to AHDB. Pig supply has been reported as sufficient to satisfy seasonally weak demand. This movement has increased the differential between EU and UK reference price to over 36p/kg, the largest gap we have seen since late 2021.

Posted on Feb 10 ,00:10

Prices have fallen across all key producing countries. The Netherlands saw the strongest decline in the 4-week period, following some relative stability seen since October. Prices fell by 24p/kg in the 4 weeks ending 28 Jan and now sit 11p/kg behind levels from a year ago.

On the contrary, France and Spain saw prices ease by only 2p/kg and 3p/kg respectively during the 4-week period. Price declines in these two nations appear to have been levelling off since mid-December but sit lower year on year following a steep fall during the summer and autumn months.

Belgium and Denmark are the only key producing nations where prices remain above those seen this time last year.

Pig meat production volumes have been in decline throughout 2023. For the year-to-date 2023 (Jan - Nov) the EU 27 has produced 18.9 million tonnes of pig meat, a drop of 7% year on year. In the European Commission’s latest outlook they forecast production to continue to decline annually by around 1% between now and 2035. These tightening supplies could support prices if consumer demand improves.

Although pork consumption has been easing long term on the continent, and this is a trend forecast to continue, this change in consumer behaviour has been gradual, largely driven by health and environmental concerns. The rising cost of living which has been impacting consumer spending in the latter half of 2022 and through 2023 has led to a significant drop in EU per capita consumption of 5%, according to the European Commission. Many consumers traded out of pork and into the poultry category due to the lower price point.

Pork consumption does have some seasonality, with volumes picking up during the warmer months and again ahead of the festive period. These trends may generate some short-term uplifts which may feed into prices. On top of this, as inflationary pressures ease and price rises slow, we may see an uptick in overall consumer demand as consumers return to the category.