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AHDB Pork Weekly Export Bulletin


13 February 2012

BPEX Export Bulletin - Week 6BPEX Export Bulletin - Week 6

The joint BPEX-EBLEX-UKTI mission to South Africa commences this Sunday. The four largest British pork processors as well as trading organisations exporting to South Africa will meet importers in Cape Town and Johannesburg with the objective of kick-starting sales.
British Pig Executive Weekly Export Bulletin

South Africa imports around 30,000 tonnes of pork and 12,000 tonnes of red offal mostly from Germany but also from Ireland, Spain and France. This follows the reopening of the market at the end of 2011.

Denmark

Market

On the European market fresh legs are sold at increasing prices. Front parts are traded at increasing prices as well, whereas other types of cuts are sold at a fairly unchanged price level. Sales of backs are problematic. Prices remain unchanged, however at a very low level. Exports to the British bacon market are stable and the February contracts are entered at a slightly increasing price level compared to the January contracts. As to the markets outside Europe the situation remains unchanged, meaning stable trade. However, exports to China are still negatively affected by the Chinese New Year.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

High German pig quote

The fact that just now the pig producers in Germany get 9 Eurocent more per kg for their pigs is due to large exports of pig meat to countries outside the EU being sold at prices which are a little dull, says vice president of Danish Crown Asger Krogsgaard. The difference in prices is first of all due to low supply of pigs. Prices are going up in Europe but not quite as much as in Germany. In Denmark the market situation differs from the one in Germany. Denmark is dependent on exports to third countries, which is dull due to e.g. a late New Year in China. It is expected that the German upturn actually is good news for the Danish pig producers because it indicates that the market is going to turn. Usually the German quote is higher than the Danish quote this time of the year, and the Danish quote is higher by the end of the year.
(Source, Landbrugsavisen)

Danish breeding animals in China may be a threat to Danish pig meat exports

Karl Christian Moller, chief analyst of Danish Crown says that China?s ambition to become self-sufficient in producing breeding pigs is a latent threat towards the Danish Crown exports to China. There is an enormous potential for increasing productivity in Chinese pig production when breeding animals from e.g. Denmark are available together with Danish know-how on pig production. So exports of Danish breeding animals may increase China?s self-sufficiency and hereby restrict exports of pig meat to China. On the other hand it probably is a fact that China could find fine breeding animals elsewhere should Danish farmers refuse to export their breeding animals, says Karl Christian Moller. Through Dan Bred International Danish breeders are establishing a breeding herd in China from which they will supply breeding animals to the Chinese market. CEO Thomas Muurmann Henriksen stated that it is impossible to protect pig meat exports through a stop on exports of breeding animals. Instead China would get the breeding animals from Holland or the US.
(Source, Jyllands-Posten)

Danish farmers establish new stables and farms abroad

Danish farmers are finding it difficult to get back up from banks and authorities to develop their farms, a new Danish farming production is emerging abroad. In China a group of investors consisting of important people from the Danish farming sector is establishing a pig farm with 2,500 sows and connected slaughter pig production. Should the project on the Chinese east coast north of Shanghai go well the group has the vision over several years to establish a pig production with 500,000 slaughter pigs corresponding to a couple of percentages of the total Danish pig production. The investors in the company Scandinavian Farms include the brothers Hans Otto and Claus Ewers who run the feeding stuff company Brdr. Ewers and chairman and large investor in the Skjold group, Henrik Hougaard. The commercial pig farm is expected to be ready in spring 2013. Already within a couple of month a breeding farm connected to the project will be started - Dan Bred International being a partner. Hans Otto Ewers sees opportunities in particular in China because there is a high demand for pig meat and possibilities of running a production according to Danish standards, which are higher in efficiency than the local pig production.

In Russia, middle sized pig company with Danish shareholders is considering to double their pig production in the country. Also the company Idavang with a present production of 25,000 sows on farms in the Baltic countries and in Russia sees growth as a goal and over the latest years got the World Bank as a partner to secure capital for further growth.

In Romania, DCH International with approximately 50 investors also concluded that the present pig production of 7,000 sows and related slaughter pig production must be expanded. Today the company is the second largest foreign pig producer in the country, only surpassed by Smithfield Foods, who according to their own figures own half of the market for pigs produced in professional pig installations in the country. The Danes are producing approximately 10% of such production. Carsten Lind Pedersen of DCH International says that it is necessary to go abroad and establish farms in order to have a large scale production and a reasonable business. The company aims to grow by 30% annually over the next years.
(Source, Landbrugsavisen)

Danish slaughterhouses - payments week commencing 06 February 2012
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.347
+0.027
Euro 1.347
+0.027
Sows (above 129.9kg)
Difference to last week
Euro 0,960
-0.054
Euro 0,960
-0.054
Boars (above 109.9kg)
Difference to last week
Euro 0.827
-0.054
Euro 0.827
-0.054

France

Snacking

A recent survey organised with 1000 employees (in companies with more than 50 staff) shows that snacking 87% of active consumers eat sandwiches or biscuits or bars or other snacks during or outside their meals. 54% of respondents declare eating a sandwich or a biscuit during the day. 55% of respondent buy their snacks from vending machines. If ham and “saucisson” remain the major ingredients of the traditional sandwich, charcuterie products only hold the 4th position in the snacks offer behind catering snacks, cheese snacks, and sea food snacks. Dietetic parameters seem to push snackers away from charcuterie based meal solutions.

Pigmeat with Casino

Casino's own brand "Terre & Saveur" will now include some pig meat produced locally in the center of France by the group of producers Cyrhio involving 150 of the 600 members of the group. The pigs processed by Tradival could represent 22% of Casino's fresh pig meat offer.

Joint venture

Two groups of producers: Porc Armor and Cofiporc joined to set up "Porc Armor Evolution" which will be the fourth largest group of producers in France with 1.8 million pigs, behind Prestor (2 million pigs), Aveltis (3 million) and the leader Cooperl with 5.5 million pigs.

Pork

France confirmed its market increase. February begins with the maximum price increase allowed in the "Marche du Porc Breton", 6 cents! Our market is still very fluid (391 000 pigs with stable weights). According to MPB, the decline announced in production could play in favour of the stability these next months.

Piglets

There is no evolution for the French market. Limited offers for stable demand pulls prices upward. This tendency is shared by FNP-FNCBV prices. 25 Kg gained 5 cents and more than 94 cents for post weaners.

Cuts

The French market is a little more dynamic with the beginning of the month. Exports are still good. Prices are higher for most cuts.

Pork prices RUNGIS week commencing 06 February 2012
Cut name Price range (Euro/kg)
Back fat, rind-on 0.75
Trimmings 1.43
Leg 2.00
Loin including chump 2.76
Loin excluding chump 2.44
Belly extra without trimmings 2.43

Germany

Market

The market for pig meat is rather quiet and particularly the demand for cuts was fairly low. Supply met the demand and sales of the different cuts were balanced. Prices remained mainly unchanged. For sows for slaughter of German origin, prices remained unchanged while imported half carcasses were marketed at 5 Cent more than the previous week.
(Source, AMI)

One in ten

One in ten sow producers in the German region of Northrine-Westphalia is giving up business. Main reason is the very low price for piglets. According to data collected in November 2011, the number of sow producers decreased to 8.008 or by 4.7% compared to May 2011. The number of producers of piglets for fattening has decreased even more significantly and fell by 10.5% to 3.031. The number of pigs in the region remained almost stable at 6.37 million. The average number of pigs for all holdings increased to 796 – an increase by 38 animals compared with the previous year. The number of sows per holding was found to be 147, 8. The number of piglets has therewith increased by 11% compared to 2010 data, summing up to 1.7 million.
(Source, topagrar)

Longer working hours

Danish Crown, according to own statements the largest pig slaughter company in Europe, is planning to expand slaughter times at its Essen/Oldenburg site. In the future, slaughter is planned to commence at 10pm on a Sunday night rather than on Monday morning 5.30am. For the other days of the week the same times for start of business will apply. Danish Crown hopes to optimize the cooling chain and therewith achieve higher quality and stability at the process of deboning. Further, an improved situation at the delivery of animals for slaughter and shorter waiting times are anticipated.
(Source, topagrar)

Westfleisch

The AutoFOM system at the Westfleisch plant n Coesfeld is back in operation since the end of January.
(Source, topagrar)

Pork Prices Hamburg Market Week commencing 06 February 2012
Cut Name Price range (€/kg)
Round cut leg 2.10/2.30
Leg (boneless, rindless max fat level 3mm) 2.95/3.20
Boneless Shoulder 2.40/2.55
Picnic Shoulder 2.00/2.20
Collar 2.30/2.55
Belly (bone in, ex-breast) 2.15/2.45
Sheet Boned Belly (rindless) 1.90/2.25
Jowl 1.30/1.50
Half Pig Carcasses U class. 2.02/2.12

Netherlands

Commercial brands in free fall

The share of national brands in FMCG is falling fast despite a high level of advertising. Their market share against supermarkets brands has dropped from 62 to 58% over the last five years and should come down to 50% over the next few years. Another report points to a rise of prices for 'A' brands of 10% in 2011. Clearly, the two are linked.
(Source, Roland Berger Strategy Consultants, Food Holland)

Spain

Chaos for Iberian pigs in Salamanca

With the price of finished products down by half, Iberian pig producers are also experiencing low prices. A producer recently paid € 8,000 for 150 gilts, a derisory price of € 53 per pig when the quoted price at the Lonja de Salamanca is € 140 to 195. Such low price shows the desperation of some producers looking to leave the sector.
(Source, Infocarne)

Some 90% of pig farms up to welfare standards by 2013?

The issue in the Spanish pig sector is the difficulty of financing the necessary investment of € 200 – 300 per sow place. At the moment, only 20% of farms in Catalonia and Aragón fulfil the new requirements. However, Interpig says that 85 to 90% of farms will be by next year. The loss of smaller producers should be compensated by the growth of bigger holdings linked to the new investment. Productivity is expected to rise too.
(Source, Agrodigital.com)

Pork prices Barcelona Market Week commencing 06 February 2012
Cut Name Price range (€/kg)
Carcasses (secondary grade) 1,528/1,534
Gerona Loin Chops --/--
Loin Eye Muscle --/--
Spare Ribs 2,73/2,76
Fillets 5,38/5,41
Round Cut Legs 2,28/2,31
Cooked Ham 1,82/1,85
Rindless Picnic Shoulder 1,54/1,57
Belly 1,96/1,99
Smoked Belly with Spare Rib Section Cut off 2,39/2,42
Shoulder chap or Head Jowls 1,08/1,11
Back Fat, rindless 1,08/1,11

Italy

Positive trends

In 2010, Italian heavy pigs were paid less Danish, Dutch or German pigs despite higher costs of production. However, prices are now consistently above € 1.50 /kg and a measured optimism prevails. Exports of processed products, meat and offal are said to contribute to this rise with exports to Third Countries up 20%. Obviously, lower feed prices also have a large effect on profitability.
(Source, Rivisita di Suinicoltura)

Russia

Import quotas approved

The Russian government approved a proposal on new import quotas for meat in 2012. For pig meat there will be a common global import quota of 400,000 t fresh/chilled pig meat and 30,000 t of trimmings. The customs duty for the quota will be 0 and outside the quota the duty will be 65%. In 2011 the total import quota was 472,100 t of fresh/chilled pig meat and 27,900 t of trimmings. In 2011 the quota was divided between the EU, the US and other countries and the duty was 15% (minimum 0.25 Euro/kg) within the quota and 75% (minimum 1.50 Euro/kg) outside the quota.
(Source, Markedsnyt for Svinekoed)

Domestic pork market after joining WTO

The Ministry of Agriculture of Russia calculated that the annual amount of grants from the government to agricultural enterprises will have to be around RUB 96 billion (~ USD 3,227,171,000) after Russia joins WTO. Otherwise domestic manufacturers will not be able to survive. Agricultural enterprises involved in pig breeding will be the ones who will suffer most as the share of imported pork on the market will reach 50% and wholesale prices are expected to drop by 10%. Some of the manufacturers already point to Baltic and Polish pigs that are forcing domestic pigs out of Russian market.
(Source, Meatinfo.ru)

Import of 24 t of Canadian pork banned

Rosselkhoznadzor in St.Petersburg banned the import of 24 t of pork from Canada when the consignment was going through customs in St.Petersburg port. In the course of examination the experts detected labels with the number of veterinary certificate that did not correspond to the number of the original of the certificate. The pork is held at the port until Rosselkhoznadzor receives comments from the National Veterinary service of Canada. The owner may be held administratively responsible.
(Source, UkrAgroKonsult)

Belorussia

Development in 2011

According to information provided by the Ministry of Agriculture and Food, there were three pig breeding complexes built and nine reconstructed in 2011. About BYR 400 billion (USD 48,250,904) were spent on building and reconstruction. The money was mainly received from investors. In 2012 Belorussia plans to build further two and to reconstruct six pig-breeding complexes. The total production volume is planned to amount to 457,000 t of pork in live weight. Currently there are 107 pig-breeding complexes of different capacity functioning in the country.
(Source, Piginfo.ua)

China

Lower pork imports for 2012

Rabobank is predicting a fall of pork imports during 2012 of 18-35% from 1.2 m. tonnes to 800,000 - 1 m. tonnes. One thing is clear: one needs to take into account the new competition from Brazil to supply China with pork.
(Source, Boerderij Vandaag)

BRF plans a pork processing plant

The Brazilian concern is negotiating a joint venture with China's Dah Chong Hong (DCH) that may start around 2014.
(Source, Brazilian Meat Monitor)

Brazil

Demand pushes up prices

Strong demand around Christmas has pushed up pork prices in Brazil to last year highs. Volumes are reported to be limited.
(Source, Brazilian Meat Monitor)

Marfrig – BRF agreement

Following the competition ruling against the merger leading to the creation of Brazil Foods (BRF), the company has agreed an asset swap with Marfrig which will double its production of processed meats and will increase the market share for its Seara brand from 9 to 21%. Marfrig has been losing large amount of money and its share are languishing.
(Source, Brazilian Meat Monitor)

Africa

Pr. Hans-Wilhem Windhorst of the Agriculture Planning Institute of Vechta University (ISPA) in Germany is forecasting good demand for European pork in Africa. Despite the doubling of production between 1999 and 2009, the whole continent only produces 1.1% of World pork. He confirms that South Africa and Angola (which we are targeting) are the largest importers with 75% of total pork volumes. There is no growth of production in Central Africa. Production in Eastern African countries such as Uganda (110,000 t.), Mozambique (91,000 t.), Madagascar (55,000 t.) and Malawi (45,000 t.) is growing. In West Africa, Nigerian production representing 66.3% of the production of the region or 226,000 t. is rising. The rest is very small. South Africa production with 313,000 t. shows the largest increase in Africa but has to deal with rising population and incomes.
(Source, Fleischwirtschaft)

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