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Rabobank's research suggests supply of both cattle and hogs will remain tight both in the EU and globally until at least 2013 and that this low production will lead to a continuation of elevated prices.EU meat industry margins have been pressured in recent years due to its inability to fully pass on the rising pork and beef prices. With feed costs nearing 2008 records the main question is what EU beef and pork production and resulting prices will be in 2013 and 2014.
The January-September 2012 EU pork price averaged EUR 1.67 per kg carcass weight equivalent (cwe), EUR 0.20 above the 2004-2011 average. This resulted from the decline of 2.5 million head in the sow herd between 2006 and 2011, in turn caused by low profitability in recent years due to high feed costs and by high piglet prices (up an average of 25% compared to Jan-Sept 2011 prices).
Rabobank predicts a further 2 percent decline in pork production in 2014 as smaller producers of piglets are expected to cease production due to the EU sow stall ban. In addition, expansion at remaining producers will be hampered by the current high feed costs and an export demand that will remain strong.
Monday October 1, 2012/ Rabobank/ Netherlands.
https://www.perscentrumrabobank.com
