Improving competitiveness of the swine sector

Bartha, Andrea

Keywords: pork commerce, consumer habits, competitiveness, efficiency

The number of swine held in the country dropped to 6 million at the beginning of the 1990-ies, and has been declining ever since. The Hungarian Central Statistical Office reported that there were 3.7 million swine in Hungary in August 2008. Lack of raw material and lower prices outside the country encourage the processing industry to import pork. Even adding the costs of shipping, it is cheaper to import raw material from other countries, especially Poland. Hungarian producers have high net costs, and the difference between two producers can be as high as 80-90 forint. Countries with the lowest production costs, i.e. the USA, Canada and Brazil are gradually taking over markets earlier supplied by Denmark, the Netherlands and Germany. This means that these countries are forced lo leave these markets (Korea, Japan) due to their higher prices, and sell their products within the Community. Consequently, Hungary has to compete with these Member States.
To assess the competitive edge of a sector, one must look at all participants in the product route, and analyse production, processing, commerce and consumption. Producers should focus on efficient production methodology, reducing own costs, selecting suitable genetics, as well as feeding and animal husbandry technology. It would seem that producers could effectively strengthen their position by forming producer organisations. As for the meat industry and slaughterhouses, they need to specialise and separate cutting from dismembering. Changes in the market should be monitored regularly, as producers can gain competitive advantage by being able to react quickly. Concentration is an important issue in this product path as well. Joint representation of producers’ interest would be required in dealing with business representatives as well.
More attention should be paid to marketing in both commerce and consumption. Consumers could be provided with information in order to turn them into informed consumers. One must be aware that it is best not only to satisfy consumer demand but also to generate such demand.