Pork prices in the deep valley - beef prices in the heights - How does that fit together? At the end of Sep 2021, pig prices dropped to 1.25 € / kg (in a wide range from 1.20 to 1.30 € / kg), while at the same time the R3 bull prices fell to 4.16 € / kg in a narrow range from 4.15 to 4.21 € / kg show further increasing tendencies. What's behind it? The reasons for the low pork prices are relatively easy to uncover: With an EU self-sufficiency rate of around 125%, a functioning third country export is necessary. With the appearance of ASP in Germany, decisive sales volumes on the world market have collapsed. This is particularly true of the Chinese market, which has purchased large quantities of less valuable pork cuts at attractive prices. Business in China also became increasingly difficult for the other EU exporting countries, as pig prices in China halved within half a year due to an improved supply situation.A lack of sales opportunities on the world market lead to massive supply and price pressure in the EU internal market. The end is not in sight. Declines in production in Germany are more than offset by growth in Spain. EU beef production has been declining for several years. The EU's beef foreign trade shows a slight increase in exports in a large number of countries with small proportions. The exception is Great Britain with 30% , which gets its declining demand from Ireland. With a share of 9%, Israel is the next largest recipient country, whose imports, which have increased by 36% in 2021, come mainly from the south-east EU countries. The EU imports usually come from the South American countries Brazil, Argentina and Uruquay with an import share of approx. 80% or 180,000 t or just under 2% of EU consumption. Germany is one of the beef importers.The effects of the ASF-related meat supply crisis in China are not limited to the pig sector. In addition to the tripled pork imports of around 5.5 million t, China has also more than doubled its beef imports to 3.5 million t. The closest Australian and New Zealand farmers can only deliver to a limited extent because they are still busy rebuilding cattle after the previous years of drought. The USA exports around 1.55 million tons of beef and imports 1.35 million tons . The exchange with Mexico and Canada close to the border plays an important role. The South American countries come first as high-performance beef suppliers. However, the additional quantities demanded by China cannot be provided so quickly in a short period of time. Brazil, with a global trade share of around 25%, has increased its beef exports by almost half a million in the last 3 years.t increased, but that was only possible at the expense of a considerable inventory reduction and losses in replenishment. The result is that Brazil has overused its cattle herds and the necessary supplies are currently inferior. Argentina pulled the export brake in good time with the help of export tariffs in order to guarantee supplies at reasonable prices in their own country. Exports have decreased by almost 20%. The result is a global beef shortage . International prices have risen significantly. Beef courses have doubled in South America, Australia, and New Zealand . In the USA and Canada , prices are at a high level. The sharp rise in freight rates due to the scarce availability of containers, a lack of skilled workers due to Covid and the rise in energy prices are also driving up prices. For the EU , the possible purchase quantities are considerably smaller.Imports to date have fallen by more than 20% compared to previous years. Even the duty-free import quotas are only used to a small extent. The comparatively longer production time in beef production ensures that the market situation will not change so quickly. The market adjustment of pig farming is possible in the short term, but ASF and the weak third country exports remain effective on the market for the time being. Little relief can be expected from the demand side.
