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New EU welfare laws could shrink pork supplies

Reuters/Pig numbers in the European Union could fall by as much as 10 per cent and the price of pork could rise substantially when tougher animal welfare regulations come into force next year.

Some farmers are likely to leave the industry, especially in Spain, a major producer where a credit squeeze will make it harder to comply with the new rules.

Alberto Herranz, director of the Ancoporc pork trader’s association in Spain, said estimates of a five to 10 per cent drop in herd numbers were “very reasonable.”

“Some farms won’t be able to adapt because they cannot get the financing, or geographical conditions will leave them without room to expand and they won’t be viable with a lower head count,” he said.

EU regulations stipulate that traditional stalls for pregnant sows must not be used from the start of next year. The stalls are already banned in Britain and Sweden.

A 10 per cent drop in pig numbers would threaten the EU’s position as a pork exporter.

“There are expectations that the changes in 2013 will make the EU a net importer of pork,” a spokesman for the German Farmers’ Association said.

The EU exports pork to countries such as Russia, Hong Kong and China. Exports in 2011 were worth about 4.6 billion euros (three billion pounds), according to European Commission figures. Germany and Spain are the EU’s top two pork producers.

Shrinking herd, rising prices

Stewart Houston, chairman of English pig farming group BPEX, said the new welfare regulations would lead to a fall of between five and 10 per cent in the EU’s pork production.

“There are only three countries that are 100 per cent compliant now, and that’s Luxembourg, the United Kingdom and Sweden,” Houston said. “What it means is that some (pig farmers) will change and some will exit the industry.”

He said some farmers would struggle to get planning permission and implement changes that cost about 300 pounds a sow before the end of the year.

Moreover, high cereal and soy costs mean there is little incentive to do so, Houston said, adding that preliminary BPEX figures showing a three per cent drop in the European sow herd between 2011 and 2012 indicated the change was already underway.

Danish Agriculture and Food Council analyst Karsten Flemin said the new rules could curtail EU pork exports, but may not lead to an increase in imports.

“The reaction from politicians and consumers will influence how much EU production will drop, and if we are going to get imports to the EU from countries not fulfilling the EU (welfare) standards,” he said.

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