The closure of a major meat processing plant in Germany due to an outbreak of Covid-19 could put pressure on European pig prices, claims farm levy body AHDB.
“The plant reportedly processes in excess of 100,000 pigs a week and it seems it will be closed for a few weeks, although this is unclear,” said AHDB senior analyst, Bethan Wilkins.
“Tonnies, which owns the plant, is apparently confident the pigs can be diverted elsewhere. However, it seems likely increased tightness in slaughter capacity will put downward pressure on prices in the coming week at least.”
She said Germany was central to the European pork market and any price pressure in the country was likely to have repercussions in other member states.
“Countries that export live pigs to Germany for slaughter may well face some difficulties, if these supplies prove difficult to divert,” added Ms Wilkins.
“For the UK, the sow market may face pressure, with most of these carcasses exported to Germany.”
She said suspension of the plant’s approval to export to China was also a longer-term concern.
“Access to China is important as it maximises carcase values, particularly at a time where EU demand is challenged by limitations on the foodservice industry,” added Ms Wilkins.
“Other plants may need to increase their exports in order to maintain volumes overall.”
She said reports indicate China has already increased inspections of imported meat, and the European market was not immune to this.
Ms Wilkins added: “Although it is highly unlikely people can contract Covid-19 from food or packaging, according to the World Health Organisation, caution over imported meat may well be another challenge facing suppliers to the Chinese market this year.”