The wholesale prices for pork in Latvia jumped on average by 30% as of mid-2017, as compared to the same level in the previous year, according to Andrey Zhdan, general director of Latvian major pork processor Forevers.
This growth has brought relief to the meat industry, where the prices were steadily falling for more than two years after the introduction of food embargo by Russian government in August 2014, according to Zhdan.
The prices for pork at some point had reached the ten-year lows and forced farmers to cut pig population at their farms, he estimated.
Exports to Russia previously accounted for 77% of the Latvian pig production, with the country exporting a total of 16,300 tonnes (t) of live weight of pork worth LVL14 million ($28 million) in 2011, according to information shared by Latvian Statistic Bureau. Latvia pork export, however, was subjected to numerous veterinary restrictions, before being completely banned within introduction of food embargo.
Impact of ASF
Pig population in Latvia was constantly shrinking from the peak of 390,000 heads reached in 2010 due to oversupply crisis. This figure dropped to 336,000 heads in 2016, according to Statistic Bureau, as numerous low-effective pig farmers have been forced to leave the market.
Although, the final count on pigs in the country in 2017 is yet to be estimated, it is believed it kept falling, in this case, however, due to efforts of the Latvian Food and Veterinary Service (FVS), which was forced to cull nearly 21,000 heads of pigs due to the African Swine Fever (ASF) outbreaks.
FVS said that it had to cull only 14,000 pigs in total due to ASF in the period between 2014 and 2016, so 2017 was definitely the worst year for the country in terms of fight against the disease.
Edvins Olszewski, the spokesperson for FVS, recently revealed that ASF last year was confirmed in 196 subdivisions of 73 districts of the country. This is much more than in 2017, but what more importantly is that ASF started affecting industrial farms.
In this context ASF became the main driver of growth for the domestic pork prices in 2017, FVS said earlier in a release. It is not known how the situation could change in 2018. The press-service of FVS was not available for comments about the forecasted dynamic of ASF spread in Latvia in the current year and what impact it may bring to the domestic market.
Pledged expansion
Despite the ASF challenge and the rise in wholesale prices it is likely that Latvian meat industry will see some investments allocated into new capacities in 2018. Forevers has promised to invest Eur 22 million into the project aimed to increase its meat processing capacities by nearly 50%.
According to Zhdan, the construction of the new meat processing plant is slated to be started in 2018 and completed by 2020. This is the first major investment pledged for the Latvian meat industry since the beginning of oversupply crisis in 2014.
The company, however, so far keeps most details about behind the curtain. Sanita Liepiņa, the official spokesperson of Forevers refused from sharing additional information on the expansion in response to request of GlobalMeatNews.