Uncertainty in feed supply could lead to a further decline in pig production in Europe

As the Ukrainian conflict continues, its potential impact on global agriculture and food continues to grow. While the red MEAT trade may be affected, Erin Borror, US Meat EXPORT Federation Vice President for Economic Analysis, says feed is the biggest concern.

“In terms of red meat, RUSSIA , Ukraine and Belarus combined, I think, exported about 60,000 tons of beef to CHINA , so the red meat trade is getting interesting, but what really matters is feed,” says Borror. “ Ukraine is the third largest exporter of corn, the second largest exporter of barley, the first largest exporter of sunflower seeds and the fifth largest exporter of wheat, and Russia is the largest exporter of wheat, so there is a growing concern about feed availability.”

This is especially worrisome for Europe, as Ukraine provides 40% of corn, barley and wheat imports to the European Union. For China, Ukraine supplies about 23% of the same imports.

“In terms of feed, there is a real concern about availability, because we are not only worried about this crop that needs to be planted right now, but also about the grain in storage that needed to be exported before the end of this agricultural year, and these exports are not now leaves Ukrainian ports,” says Borror. "They're working on trying to get grain traded by rail to Europe, but basically you're looking at a product that hasn't shipped yet."

This uncertainty in the supply of feed could lead to a further decline in pig production in Europe. Borror says Europe is already reducing its herds as pork prices are under pressure after African swine fever was detected in Germany in September 2020.

“It really exacerbated the downturn in hog prices in Europe, and then there was demand in China, which practically evaporated last summer, that is, in the middle of 2021, and therefore European producers were losing money, and this was before the Ukrainian crisis began,” — Borror says.

In December, the number of pigs in Europe decreased by 3%, the number of sows decreased by 3.6%, with a sharp decrease in Germany in particular, which, according to Borror, is due to a combination of ASF and additional animal and environmental protection regulations.

In terms of feed, Borror expects the impact of the Ukrainian crisis to be significant and to last at least next year, if not the next two years.