Prospects for the development of EU agriculture

10.02.2019

Changing consumer preferences will shape the structure of agricultural markets by 2030. It is expected that the production of pig meat will gradually decrease (-0.2% annually).

Production

Overall production efficiency will continue to grow as fertility and feed conversion rates improve due to advances in genetics and improved technology. By the end of the survey period, against the backdrop of declining domestic demand, the production of pig meat in the EU should be somewhat reduced (-0.2% annually)

Trade turnover

It is expected that global demand for imports of pig meat will grow, however, at a slower pace than in the previous decade. It is predicted that during the survey period, the increase will be 0.7% per year (+724,000 tons in total), reaching 8.7 million tons by 2030. Significant growth is most likely in the two main EU trade partners in Asia: in the Philippines (+155,000 tons) and in Vietnam (+112,000 tons).

If the demand for European pork increases markedly in China, amid the problems caused by ASF, the outlook for 2019 will change, as prices and production will rise in the EU. On the other hand, if the ASF outbreaks in the EU continue, especially if any of the leading exporting countries are affected, trade flows from the EU can drop significantly.

It is assumed that the embargo on imports from the EU of pig products to Russia will continue until the end of 2019. At the same time, even if the ban is lifted, the country’s ambitious goals of self-sufficiency and its declining purchasing power will lead to a reduction in EU imports. The percentage of Russia’s self-sufficiency has already increased from 79% in 2013 to 91% in 2018. Moreover, starting in December 2017, Russia also imposed a ban on the import of Brazilian pork, on the grounds that meat contains growth factor ractopamine. All this despite the fact that in 2017, 90% of all pork imported to Russia came from Brazil. Thus, in 2018, Russia is practically self-sufficient in this regard. Part of this last ban was lifted only in November 2018 – five Brazilian exporters were allowed to resume deliveries. At the same time, the largest players are still out of the game. In the United States, pig meat production is growing rapidly, and therefore, its availability for export is growing. Given the competitive US prices, it is expected that the US will increase its share of world exports, slightly surpassing the EU.

Production in Brazil will grow even faster than in the United States, however, this growth will mainly saturate the domestic market, and Brazil’s participation in world trade will remain at the current level. EU exports are expected to grow slowly, reaching nearly 2.7 million tons by the end of the review period. This will amount to almost 30% of the total world trade in meat of pigs, despite the fact that the US share will reach one third.