UK

UK expects a 4% increase in pig meat production

Pork

Exports are to decrease as China will slow down on pork imports and the EU market will take less British pork.

Posted on Feb 03 ,11:27

The UK pig meat output is expected to surpass 1 million tonnes this year due to higher slaughter and heavier carcase weights, according to the latest AHDB outlook. However, most of the pig meat is expected to remain in the country as a result of lower Chinese import demand and disruption following departure from the EU, says the report. "We believe that there was a small increase in the size of the breeding herd in 2020. Anecdotal reports generally support this, as does a 2% increase in GB breeding feed production between January and November. Reports suggest that there is little appetite to expand in 2021 at present, due to the uncertainty in the market. Poorer profitability due to higher input costs and lower finishing prices discourages expansion. As such, we expect that the breeding herd will remain relatively stable this year. There is the potential to decline in 2022 if market conditions remain unfavourable," foresee AHDB analysts.
Also, the analysis predicts clean pig slaughter in 2021 to be higher than in 2020, driven by a slightly larger breeding herd as well the backlog of pigs from late 2020. Throughput is expected to reach 11.2 million head, about 3% above year-earlier levels.
Nevertheless, the first half of the year remains in the field of uncertainty due to ongoing coronavirus pandemic. There is more uncertainty than usual surrounding slaughter levels in the first half of 2021. It remains to be seen how slaughter capacity will function in the coming weeks, with the coronavirus pandemic ongoing. There is also the uncertainty surrounding the number of pigs currently backed up on farms due to limited slaughter levels late last year. This is difficult to estimate at present given the data available; we are currently exploring ways to monitor this more accurately. In this forecast, we have put a particularly sharp rise in slaughter for Q2 2021, compared to 2020. This is to account for the backlog. We expect the majority the backlog to be addressed in Q2 when the number of pigs coming forward is seasonally lower.
During 2020, UK pork exports have increased by 3% compared to the previous year, totalling 234,300 tonnes. For 2021 the volumes shipped abroad are to fall as China will reduce its demand for pork by 10% and disruptions in trade, following the UK exit from the European Union, are expected to last.
"It has been widely reported that China has been active in re-establishing its domestic pig herd following the ASF epidemic. As a result of this, Chinese demand for pork is expected to decline in 2021, with the USDA forecasting a decline of 10%. Nevertheless, the forecast is high relative to historical levels, so there is still a degree of optimism for this market. Just over half of all UK pig meat exports are sent to the EU. With the EU market facing its own challenges with backlogs and export bans, this market is positioned to be well supplied in 2021. British prices are typically higher than those in the EU, which has been further compounded by additional costs associated with leaving the customs union. As such, this could make the EU market more challenging this year, especially early on. This will be a particular watchpoint for cull sow carcasses. We expect UK pig meat exports (excluding offal) to fall by around 7% this year. However, this will be highly dependent on the extent and duration of disruption associated with leaving the EU," says AHDB.

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