Genesus Global Market Report Europe
April 2023
Simon Grey, General Manager Europe, Genesus Inc.
Record pig prices, record reduction in herd size, ever increasing animal welfare / environmental legislation and falling pigmeat consumption in Europe. Where next for the European pig industry?
A further 5% fall in production is expected in 2023.
Record pig prices across Europe are expected to continue to rise a little more over the next few months, then stabilise. With falling feed and energy prices the good news is an expected period of profitability. Hopefully that will last for some time. There are some very big holes in bank accounts to fill!
In Europe we have won the race to the bottom!
The past 2 decades in Europe have been characterised by chasing leaner and leaner pigs and lower and lower cost of production. This was all done because we were told by politicians, retailers and apparently the general public that that is what they wanted, leaner and cheaper pork. If this was true then why is pork consumption falling? Chicken has positioned itself as the lean cheap meat and has won that war.
As in the USA with the “other white meat” campaign, a marketing disaster for the American pig industry was about taking on chicken. This is impossible! Why try to compete with a lower cost product. Much better looking at taking market share from a higher cost segment by producing something that is better quality or better still just getting people to eat more healthy and tasty pork…
The result of taking on this race that could not be won is European breeds now so lean they are very difficult to manage. Sow mortalities in the 15% to 20% range are now the norm. Losing about 1/3 of all pigs from the time a sow starts farrowing to slaughter is also very common. We are seeing higher levels of cannibalism, structural failure and prolapse. We have given the welfare lobby all ammunition they need to get changes made. At current mortality and morbidity levels we are not in a position to well defend current practices.
Will Europe stop being a net exporter?
Europe currently exports about 20% of its pork production. There are lots of different estimates of production and export, 20% is about the average of all of the different estimates available. Lowest estimate is the EU’s own at 13% of production exported.
Logic says that continued contraction of production will at some point mean Europe stops being a net exporter, however this is still some time off. The challenge for the European industry is higher welfare and environmental standards bring a higher cost of production. Most importing countries today have little or no interest in these standards. This puts European pork at a cost of production disadvantage vs other exporters like USA, Canada and Brazil. Not good for a commodity product which is sold at lowest cost.
There are some anomalies that need to be dealt with. There is a clear link between lower antibiotic use and withdrawal of Zinc in nursery diets and increased mortality and morbidity. There is a direct link to more extensive systems (no gestation stalls and no farrowing crates) and higher mortality. Do the legislators care about this, it would seem not.
The is also the issue of the most environmentally friendly production being the most intensive and biologically efficient farms and not extensive, lower performing systems like free range. Once again will the legislators care about the facts, once again all indicators today are that they do not.
Sustainable!
The word sustainable is everywhere today. Sustainable energy, sustainable transport, sustainable food…………….. The first requirement to be sustainable is profit. We certainly can’t keep on pig farming without it!
Our chase to the bottom on cost in Europe has done nothing for pork consumption, ultra-lean pork has little taste. Taste is the number one factor people will buy a food.
Ultra-lean, ultra-prolific pigs have cost us a lot in terms of mortality, morbidity, cannibalism. Dead pigs are for sure not sustainable!
We need well trained and well-motivated staff to work on our pig farms. Moving dead pigs is not a motivation, being in pens of aggressive pigs to treat, or remove is not a motivation. The legislation we are facing is not going to make this part of our business any better.
Genesus is a Canadian based company. Canada has had very little of the welfare legislation that European farmers have had to deal with. Canada is not obsessed with ultra-lean pork and as Canada exports well over 60% of all of its production, has had to have pork desirable to those who import, especially the higher quality markets of South-East Asia.
The means today Genesus has a pig that is easy to manage, that lives, that does not eat its pen mates or the stock people caring for it. Seems a good start to sustainability and keeping motivated staff.
Genesus is well known as the market leader when it comes to tasty pork. When you have won the race to the bottom, there is only one direction to go…. To sell more pork we have to make it more desirable, that means better tasting. Making it lean and cheap has got us to where we are today!
