By Philip Clarke
DELAYS by supermarkets in passing on falling pig prices to consumers have led to a deeper and longer downturn than necessary in the pig cycle.
“Fifteen years ago, consumers would have benefited much quicker,” claimed Knud Buhl, of Danish slaughter body Danske Slagterier, at this weeks EuroTier 98 livestock show in Hannover. “But the concentration of supermarket power means that normal competition has been set aside and price falls are passed on later and later.”
The problems were also exacerbated by concentrations on the supply side, he added.
“Previously, pig production was carried out on smaller farms and it was easier to switch in and out,” said Mr Buhl. But, with more capital intensive units, things had to get a lot worse economically before producers reacted.
It was also becoming increasingly difficult for the EU to export its way out of a crisis.
The USA was rapidly expanding its pig industry. Danske Slagterier estimated its exports would increase fourfold to 800,000t by 2002, while the EU would only manage a marginal rise to just over 1m tonnes.
“The US, unlike the EU, is not restricted by environmental and animal welfare legislation,” said Mr Buhl. “They also have free access to biotechnology and antibiotics.”
But with pigmeat at last getting cheaper in Europes supermarkets, EU pork consumption was expected to increase by 500,000t next year (though this would have knock-on effects for beef producers, as total meat consumption would not go up).