“Minus zero” instead of “plus zero” for the meat sector

The number of meat processing enterprises has dropped from more then 500 to 350 within a few years, while concentration has continued in the sector. – Major changes have taken place in the Hungarian meat sector in recent years – says Tamás Éder, chairman of the Hungarian Meat Association. As a result of an increase in imports, Hungary has turned into a net importer of livestock and meat products, from a net exporter. This is one of the reasons why processing enterprises have managed to survive. Last year’s drastic rise in fodder prices has lead to an almost 50 percent rise in the price of swine, while processing enterprise have only been able to increase their prices by 5 percent. The above price rises have also resulted in a growth of illegal meat processing activities and a drop in domestic demand. Apart from these negative trends, the strength of the HUF has also had an adverse effect on export, leading to decline in the meat sector. However, total gross production of the meats sector will still be well above HUF 300 billion this year. The supply of pork is expected to drop somewhat in the EU in the last quarter of the year, which is expected to result in higher prices compared to the end of 2007. Profitability continues to remain low in the meat sector. In the words of Tamés Éder, the sector achieved “plus zero” last year and it is expected to close this year with “minus zero”. As many enterprise are unable to reduce costs any further, they choose to specialise. On the other hand, illegal enterprises account for 30 percent of total sales. Domestic consumption was down by 5 percent in the market of legal meat products last year.