German pork production continues to contract as sentiment towards profitability and risk from African Swine Fever (ASF) remain. The 2023 May census preliminary figures report a continued decline in all metrics, with herd figures reaching lows not seen since 1990 and a significant drop in the number of pig farms.
The Federal Statistical Office (Destatis) census report from May 2023, compared to November 2022, shows a 652,000 decline in pig stock (3.1%), a drop of 1.7% in fattening pigs, 5.2% in piglet population and 3.2% in young pigs. The drop in fattening pigs is less severe, protecting supply capacity more than would be indicated by the overall stock decline. However, the decrease in new pigs indicates that the declining trend in the pig population will continue, and the pork production capacity will be hit further and more significantly in the coming months.
In the same report, pig farming decreased by 1,000 farms over six months, a drop of about 6%, indicating a continued aversion of German farmers to the pig trade. These sentiments are driven by the lacking profitability due to increasing animal feed and fuel costs and the ongoing risks associated with the spread of ASF. There are also some regulatory pressures from the government’s push for higher-quality pork and better husbandry conditions; the government recently adopted an act on a mandatory state animal husbandry label and amendments to the federal building code to facilitate the conversion and improvement of animal housing.
The decrease in pig stock and the consequential decrease in pork supply has led to the highest prices recorded on the Mintec Benchmark Price (MBP) for Pig ddwt grade S exw DE at €2.62/kg as of 19th July 2023. Supply will continue to decline until German farmers perceive pig farming as profitable. However, the prices required to support farmers are yet to be reached as lower demand counteracts a price increase. The demand shift is due to the German consumer appetite changing to a lower average consumption of pork meat per capita, according to multiple market sources. Therefore, the German pork market is shrinking from both a supply side and demand side aspect.
