Lars Hoelgaard Deputy Director General

Ⓒ

Olo

f S

.

Lars HoelgaardDeputy Director General

Pig sector outlook –

a Commission perspective Pigmeat reflection day, Brussels,

3 December 2010

Pigmeat reflection day, 3.12.20102

World Pigmeat Production2008: 103.190 MioT

Mexico 1.1%

S-Korea 1.0%

Japan 1.2%

CDN 1.9%Philipp 1.6%

Russia 2.0%V- Nam 2.5%

Brazil 2.9%

Other8%

USA 10.1%

EU 2721.6%

China45.7%


Main Importers of PIG Products (up to Sep)

Hon

g Ko

ng

Japa

n

Russ

ia

Mex

ico

(up

to A

ug 1

0)

Unite

d St

ates

EU *

Chin

a

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

2010 (up to Sep)

Qty

in 1

000

Tonn

es

Main Exporters of PIG Products (up to Sep)

EU

Unite

d St

ates

Cana

da

Hon

g Ko

ng

Braz

il

Chin

a

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2010 (up to Sep)

Qty

in 1

000

Tonn

es

Global players in the pigmeat sector


EU Trade of Pig Meat

46

13

5

59

72

0

71

93

7

51

64

1

63

80

0

55

91

8

56

07

7

54

49

9

72

27

6

22

61

2

21

73

0

32

36

8

43

17

9

59

83

8

51

66

2

23

66

7

88

1 0

11

94

3 4

05

1 0

83

23

0

1 2

38

13

8

1 5

56

96

1

1 5

45

90

7

1 3

31

80

8

1 5

26

56

3

1 5

09

30

2

1 7

80

56

8

1 9

38

45

5

2 0

89

36

3

1 9

10

90

8

2 5

69

08

7

2 3

84

53

6

1 2

50

57

2

0

250 000

500 000

750 000

1 000 000

1 250 000

1 500 000

1 750 000

2 000 000

2 250 000

2 500 000

2 750 000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jan-Jun 10

To

nn

es

pro

du

ct

we

igh

t

IMPORTS EXPORTS


Slaughter: Quarterly change compared to the same period in the previous year (GIP Data only)

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

Ch

an

ge i

n %

Q1 0.2% -1.5% -1.0% 1.0%

Q2 -0.3% 0.4% -1.2% 1.2%

Q3 -1.2% -1.6% 2.3%

Q4 -4.5% 0.7% 0.1%

Ann -1.5% -0.5% 0.0% -0.1%

2008 2009 2010 2011

Stable pig production in the EU


Development of the EU Pig Carcasses price

115

135

155

175

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

€/1

00

kg

5 yr Avg (05-09) 2007 2008 2009 2010


Weekly average Pigprices 2007 - 2010 in Euro/ 100kg carcase

EU, Brazil and the US

55,0

75,0

95,0

115,0

135,0

155,0

175,0

| 2007 | 2008 | 2009 | 2010 |

weeksEUUSBraz. avgCDN Quebeck

EU = weighted avg of MS prices grade E <55% lean meatUS = weekly USDA prices carcase lean hogs Iowa-Minn. 167-187lbBR = avg of maximum prices in main producing states (suino.com.br)CDN= Quebeck index 100 (agr.gc.ca)

Real ↑

Dollar ↓


Comparisson between Compoundfeed for Pigs and a Cereal-Feedmix

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

| 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 | 11

Euro

/ T (co

mpound feed)

Euro

/ 10

0kg (pig

carc

ase

) margin pig/ comp. Feed (4.4)Cereal-mixCompound feedPig carcaseAvg Margin 95 - 07

forecast

forecast

price

estimation

estimation

Per ton

Per 100 kg


Instruments available in the single CMO

• Release Intervention stocks

– 2,8 million tonnes barley will be sold

• Export refunds?

– EU is the biggest pigmeat exporter worldwide

(~200.000 tonnes/ month)

– EU price close to world market price

• Private storage?

– Meat will be back on the market when prices

recover in spring


Slow, limited, asymmetric price transmission along the food supply chain

95

100

105

110

115

120

Jan

-07

Fe

b-0

7

Ma

r-0

7

Ap

r-0

7

Ma

y-0

7

Jun

-07

Jul-

07

Au

g-0

7

Se

p-0

7

Oct

-07

No

v-0

7

De

c-0

7

Jan

-08

Fe

b-0

8

Ma

r-0

8

Ap

r-0

8

Ma

y-0

8

Jun

-08

Jul-

08

Au

g-0

8

Se

p-0

8

Oct

-08

No

v-0

8

De

c-0

8

Jan

-09

Fe

b-0

9

Ma

r-0

9

Ap

r-0

9

Ma

y-0

9

Jun

-09

Jul-

09

Source: European Commission – DG Economic and Financial Affairs, based on Eurostat data

FOOD PRICE CRISIS PRODUCERS’ LAG RETAILERS’ LAG STABILISATION

Agriculturalcommodity prices

Overall inflation(HICP)

Food producer prices

Food consumer prices


0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

27.5

30.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on

, C

on

su

mp

tio

n

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Tra

de

Production

Consumption

Exports

Imports

EU-15 EU-25 EU-27

Medium-term forecast for EU pigmeat market EU production, consumption, trade and intervention stocks

(million tonnes cwe)


What policy instruments?

Better targeted to objectives Based on two pillar structure

Direct payments Market measures Rural development

• Market orientation

• Streamline and simplification

• Improved food chain functioning

• Environment, climate change and innovation as guideline themes

• Improved coherence with other EU policies

• More effective delivery mechanisms

• Address risk management

• New distribution criteria

• Redistribution

• Better targeting

• Redesign:• Greening of direct

payments• Capping of

payments• Small farmers

support• Areas with

specific natural constraints


Some highlights on the pigmeat market

• Major structural adjustments due to reduced profitability:

– Effect of feed prices particularly cereals + soy

– Land, capital and environmental constraints

• Slower pace on increasing domestic production

• Expected slow decrease in pork exports: more

international competition

• Projected moderate consumption to outpace some

production increase


Thanks for your attention

Documents

Lars Hoelgaard Deputy Director General