Pig sector in Hungary: Room for modernization and growth - Contribution from the Netherlands?

Despite the six years old strategy, the Hungarian pig population is still counting only around 3 million pigs in 2018. One of the reasons of the stagnant level is that the pig industry in the EU was in a crisis between 2014 and 2016. On the other hand, the Russian animal health restriction measures and the Russian import embargo - which entered into force in August 2014 - caused a considerable drop in demand, which led to a persistent low level of buying-in prices. On top of this, African swine fever now hinders foreign sales and growth. According to the Central Statistical Office, the number of sows is less than 180,000 today. This figure includes the 10,000 mangalica pigs – a unique Hungarian and protected breed, with a thick, woolly coat (see picture). The meat(products) are considered as a delicacy.

Despite the stagnation of Hungarian pig population, the Hungarian government angles the sector’s revival and modernization, as pork consumption and pig breeding has a tradition in Hungary. The decreased 2016 VAT reduction on pork meat from 27 to 5% was extremely successful, the competitiveness of businesses increased as well as the national pork meat consumption. The price reduction resulted in substantial savings for consumers too. The VAT cut led to a growth in foreign demand for Hungarian pork in recent years, but African swine fever has now broken this process.

On a conference held in Szekszárd (October 2018) in the topic of The Vision and Perspective of the Hungarian Pig Sector József Popp, professor of the University of Debrecen presented the general tendencies of pig keeping, and also placed the European and the Hungarian processes in this context. He highlighted the major obstacles for the Hungarian pig sector’s growth. All over the world, the pig sector is focusing on concentration, specialization and economies of scale – he said. However, this is not the case in Hungary. He also highlighted that in Hungary the ‘biggest’ Hungarian slaughterhouses are considered large, but compared to operations in other EU countries this is not really the case, since their volume does not even count as an entry level in the EU. (appr. 1 million pigs per year in 1 shift).

As an outcome of the roundtable discussion, the speakers (major Hungarian pig breeders and slaughterhouses) agreed that there is no anticipation for a change in the number of domestic pigs within the near future (2.8 to 3 million). It is also underpinned by the fact that all the three major Hungarian slaughterhouses are planning only a moderate expansion. The leaders of the Hungarian slaughterhouses agreed that swine fever is not expected to cause long-term price pressure, but in the short term, it will result in price depression. There is a general understanding that homogeneity and quality are becoming increasingly important in improving slaughterhouse productivity, resulting in the fact that slaughterhouses will also having a strong responsibility in long-term determination of quality parameters. According to Minister Nagy of Agriculture, pig breeders should use more and foreign (Dutch) genetics to improve the quality of pig farming. To be continued.