European industry depends on recurrent BSE crises to pull demand from beef Another BSE scare in France last weekend [June 9-10] sent fresh tremors through the EU pigmeat markets. This disturbance is the latest in a quick succession of unpredicted upheavals puzzling traders who used to appreciate the sector's regular supply and price cycles. The latest scandal, again involving meat from an infected animal allegedly being sold into the food chain, appeared almost identical to events last autumn which forced up pork prices because consumers suddenly switched away from beef. However, Brussels food and farming policymakers are more conscious of an earlier, more traumatic disruption. In 1996, with BSE in Britain, pig farmers across Europe anticipated a permanent demand shift in their favour and began a dramatic increase in production. After a supply squeeze as some stock were retained for breeding rather than slaughter, the EU kill surged from a quarterly rate of 50 million head in late 1997 to nearly 57 million the following year. Although consumers did buy less beef and more pork, the change was less radical than pig producers expected. The result was a huge pork surplus and a price collapse. It was not until summer last year that the EU pig industry and pork market seemed to be moving backs towards equilibrium. Then the problem in French beef suddenly stoked up pig producers' confidence again. Memories of the market imbalance five years ago account for the nervous tone of recent commentaries from Brussels analysts. The latest Eurostat pig sector survey report notes EU output will fall 0.5% this year but points out: "Even so, pigmeat production remains at a fairly high level by comparison with previous years." And it emphasises the pig herd is still bigger than in 1997. Total herd numbers in the EU, at 202.8 million head, are historically high, indicating how easily the sector could return to overproduction. The implied warning is of persistent instability. In effect, the EU pig industry now depends on recurrent BSE crises to keep pulling demand back from beef. {{M/E MEAT }}