EU faces pork price “shock wave”

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Sow HousingSow gestation stalls, like the ones pictured here, will be banned from use in European Union countries on Jan. 1, 2013. With a ban on gestation-sow stalls set to become law on Jan. 1, EU hog producers are warning that pork prices will rise significantly as the production mandate is expected to force many farmers out of business.

While animal rights groups welcome the move to eliminate the stalls, the cost of applying the ban is expected to reduce pork production and usher in higher prices for Europe's consumers. "We are at the beginning of a shock wave," said Jean-Michel Serres, chairman of the French pork producers group FNP.

EU farmers produced a record 22.7 million tons of pork in 2010, or more than 20 percent of the world's total production. That was twice the volume produced in the United States, but far behind China's output of 51 million tons, according to Reuters.

With pork producers across the 27-nation EU bloc already struggling with financial losses due to record feed costs, only 17 out of the 27 member states are expected to be fully compliant by the Jan. 1 deadline. Pork output is expected to decline significantly, especially in Germany, the EU's largest supplier with a market share of 25 percent.

"It is still unclear how many will give in but a double-digit percentage fall in German production cannot be ruled out," Michael Lohse of the German farmers association DBV said.

“I expect (the E.U. pork industry) to lose 5 percent to 7 percent of their sows from July 2012 to July 2013,” said Dermot Hayes, Iowa State University economist. Hayes expects most of the reduction will be in Southern Europe and France. 

EU consumers will face higher pork prices at the supermarket as a result of the mandated gestation-stall ban. “We are forecasting wholesale price rises of at least 10 percent year-on-year which could rise to 20 percent if production is reduced,” according to Mick Sloyan, British Pig Association (BPEX) deputy chief executive.

The sow-stall ban prompted dire warnings from British pork industry executives that “the price of bacon is set to soar in 2013.” For its part, the U.K. is already fully compliant with the rules, having adopted the stall ban in 1999.

Meanwhile, U.S. pork industry observers said the warnings were somewhat exaggerated for consumers here at home. “I certainly do not think we will see a (bacon) shortage,” said Chris Novak, National Pork Board (NPB) CEO. Novak added, however, that he sees higher bacon and pork prices ahead for U.S. consumers.

U.S. pork producers face growing domestic pressure from restaurant and grocery chains that are demanding elimination of gestation-sow stalls from their supply chains. U.S. pork industry officials, however, would prefer that the decision on sow housing be left up to the individual producer. “Both individual and group-housing systems have advantages and disadvantages,” said Sherrie Niekamp, NPB director of animal welfare. “While both systems can work, we promote producer choice to use the system that best fits his or her operation, management and employees.”



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michael    
kansas  |  November, 02, 2012 at 09:04 AM

This is Important, and needs to be very carefully monitored and documented by US Pork groups. If this plays out as projected, it will be a valuable tool in debates and arguments here. When it comes to lobbying state and federal legislators whose careers depend on the financial well-being of constituents - evidence counts. Animal Rights groups and those few who can actually afford over-priced "evironmentally responsible", "humane" foods care nothing about those who do not agree or cannot afford. But they are simply a loud Minority, and if the Majority learn the truth about costs, there will be a Reaction - that politicians can ill-afford to ignore if it receives sufficient exposure. Thanks to Rick & Pork for reporting on this.


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