Production
Before the war started, the Ukrainian swine industry also remained on a long downward trend. The sector was restructuring from household to industrial production with market exit of inefficient farms of both types. Uncertainty in the early days of the war resulted in the inability to procure inputs or sell market pigs. However, the industry avoided the massive inventory slaughter similar to the one experienced by the cattle sector. Swine producers were not as dependent on daily sales as Ukrainian dairy farmers. Some 2022 hogs were sold at higher weight, and some were shipped to war-unaffected regions for finishing. However, the swine inventory decrease accelerated in 2022.
Partially this declining trend was driven by historical trends and partially by war-related factors. A limited number of swine producers in the eastern and northern regions of Ukraine suffered from direct war losses. Some farms were destroyed entirely. However, the majority of producers concentrated in the traditional production pockets in central and western Ukraine were not impacted directly.
Ukraine’s State Statistics Service resumed publication of production indicators in early 2023. The 2022 decline in the number of sows was smaller than expected, and so was the decline in production and slaughter. The 2022 PSD numbers were updated to match the official statistics. Due to the pork price hike, 2023 pig production was higher than expected, with animal inventory comparable to the 2022
number. A significant pork price increase in neighboring EU countries was the main driver of Ukraine’s increased production. Significant import decreases that followed the EU’s production drop created a good opportunity that the Ukrainian pig farmers used. The majority of Ukrainian industrial pig producers are vertically integrated farrow-to-finish operations. During 2023 there was an inflow of small operators specializing in finishing operations only. Those farms had limited production experience and were attracted by high pork prices.
No reliable public information is available on the 2023 year-end animal inventory. Some shreds of evidence suggest that the industry did not expect such a significant pork price hike in 2023 and does not believe that it will last in 2024. In fact pork prices declined in the late months of 2023 and early 2024. The number of sows in early 2024 is likely to be similar to 2023, with a comparable animal inventory and production outlook. The industry is generally happy with the current sales level and income. No significant investments into new swine inventory are reported.
African Swine Fever
The number of officially registered African Swine Fever (ASF) cases increased in 2023. The outbreaks were registered in both wild boars (10 cases) and production facilities (37 cases). Most cases were reported from Central Ukraine, the areas unaffected by the war. Ukrainian industry is afraid that this increase may result in a bigger wave of outbreaks in the near future.
ASF remains the largest threat to production. Private households are the most vulnerable to ASF due to a lack of knowledge about the disease and rudimentary biosecurity practices. Large industrial farms are less prone to disease spread but often suffer from nearby outbreaks when the eradication zone covers their production facilities. The government of Ukraine implemented compensatory programs for households, but industrial farms have to rely on expensive commercial insurance tools in cases when they are available.
Trade
Due to ASF’s presence in the country, the export of live pigs is practically impossible. Ukraine imports a minimal number of live pigs to maintain the genetics programs at large industrial farms. Almost all imported pigs come from the large EU genetic centers. After a drop in 2022, live pig imports recovered in 2023 to six thousand heads. Trade in live pigs is not expected to be significant in 2024.
Production
Ukraine’s pre-war pork production did not cover the domestic market needs. After the war started, both industrial farms and private households increased animal slaughter. However, after the initial pork production spike, the industry slowed down production in the remaining months of 2022. Increased pork imports covered the market needs. Imports were intensive despite currency devaluation and logistical problems. The situation changed in the spring-summer of 2023 when EU pork market prices increased, making imports unaffordable and resulting in a collapse in import volumes. This situation then drove
domestic market pork prices increases. Ukrainian producers reacted by increasing the pig inventory and, consequently, some slaughter recovery. 2023 pork production is expected to be slightly below the 2022 number. Due to the industry’s concerns over decreased consumption, 2024 production is expected only to increase insignificantly.
Consumption
Ukraine’s pork consumption decreased significantly in 2022 despite increased imports. All war-related factors that negatively impacted beef consumption would be applicable to pork consumption. This includes significant population outflow, a substantial drop in disposable incomes due to a GDP decrease, and a large number of internally displaced persons who lost their jobs.
Increased pork prices became the most important factor besides the war-related ones. Despite higher pork prices the subsequent consumption drop is the primary industry concern and the source of 2024 production pessimism. A consumption drop was independently confirmed by Ukrainian retail chains, which reported from 12 to 20 percent drop in pork sales.
Pork remains one of the three major animal proteins Ukrainians consume and plays an essential role in the Ukrainian diet. Although no official updated information on pork share in the total meat consumption is available, industry sources believe that it dropped from more than a third in 2021 to roughly a quarter in 2023. Retailers also noted increased poultry consumption due to 2023 pork price growth.
Trade
Exports
Ukraine is an ASF-affected country, which limited exports to very few export destinations willing to accept the risks. Additional war-related logistics costs make exports even more problematic. Before the war started, some Ukrainian industrial producers worked on creating ASF-free compartments, which some importers would be able to recognize. As of 2024, this process remains a work in progress. The 2023 exports were sporadic and limited. No situation change is expected in 2024.
Imports
Pork imports in 2022 remained strong due to declining swine inventory and pork production decrease that started in the summer of 2022. Pork imports were also facilitated by the small business support package adopted by the Ukrainian Parliament in the spring of 2022. This package provided small businesses with Value Added Tax (VAT) breaks, and unexpectedly, pork import operations were eligible. The Parliament has canceled the breaks later in 2022, but substantial imports had already taken place. 2022 imports were the highest in the last nine years.
Imports from the EU countries dominated the Ukrainian market, with Denmark, Netherlands, and Poland being responsible for almost 80 percent of it. Affordable prices, zero import duty tariff rate quota, and geographical proximity were the main factors contributing to this situation. Imports from other destinations must transit the EU territory and thus be EU transit compliant. This makes other imports more expensive as only a few countries/facilities are eligible, and a premium price is usually paid for EU-compliant products.
The 2023 European pork production crisis resulted in a significant pork price surge making Ukrainian domestic production more competitive. 2023 imports collapsed by 70 percent to almost 19,000 metric tons, which is the lowest number in the last five years.
The 2023 import structure did not differ much from the 2022 one. It shifted toward cheaper products as demand concentrates in the lowest market segment. Minced pork, trimmings, and offal (both chilled and frozen) for further processing constitute almost three-quarters of all imports.
