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QMS (Quality Meat Scotland)


26 February 2013

QMS (Quality Meat Scotland) 25 February 2013QMS (Quality Meat Scotland) 25 February 2013


QMS - Quality Meat Scotland

Cattle

Prices and Supplies

Deadweight prime cattle prices in Scotland eased back over the course of January from their record high reached in the opening week of 2013. However, there tends to be a seasonal downswing in the market during January and deadweight prices have consequently continued to hold an 8% premium over this time last year. Auction prices have shown significant volatility over the past couple of months due to Christmas sales, thin volumes over the festive period and harsh weather in late January. Auction prices have tended to trade at a more modest 5-7% more expensive than last year.

Scottish Deadweight Prices

The trade in cull cows has held relatively stable in recent weeks. Auction prices hovered in a range between 122-125p/kg lwt during January; not dissimilar to the same period last year. Deadweight values have also remained pretty stable, trading in the mid-to-high 260s. However, they are up by around 10p/kg year-on-year.

Prime Cattle - Average Auction Price

Defra slaughter statistics for December showed that UK prime cattle supplies continued to trail year earlier levels but at a declining rate. The gap with 2011 levels narrowed to just over 2% from 5% in the previous month and more than 7% in the calendar year. The average carcase weighed 341kg in December compared with 345kg a year earlier. This is a likely reflection of higher feed costs encouraging slaughtering at a younger age plus the stifling impact of wet weather on daily liveweight gain. The heifer kill was down by more than the steer kill for an eleventh month; potentially indicating higher levels of retentions for future breeding. In reflection of falling feed costs in the autumn of 2011, which led to a rise in registrations of pure bred male dairy calves, young bull slaughterings were higher year-on-year for a third month in December as these cattle continued to reach adequate slaughter weights.

Scottish Auction Prices for Cull Cows

In contrast to an improving supply picture at the UK level, Scottish abattoirs remained tightly supplied with prime cattle. Indeed, December numbers were down 9%, compared with 8% in November and a 10% shortage in the calendar year. Similar to the UK pattern, the steer kill fell at a slower pace than heifer volumes while young bull numbers were significantly higher. In 2012 as a whole, 7% fewer steers, 13.5% fewer heifers and 12% fewer young bulls were slaughtered than in 2011.

Clean Cattle - Scottish Slaughterings 3 Week Rolling Average

At the UK level, slaughterings of mature cows and bulls exceeded year earlier levels for the fourth time in five months. This is a marked change from the first half of the year (H1) when 7.5% fewer cows and bulls were slaughtered. Consequently, the annual reduction in cow and bull throughput narrowed to 1% at the year-end. The change in trend is likely to be linked to poor forage supplies and higher feed costs, and suggests that any movement towards herd expansion due to strong producer prices has slowed.

In December, slaughterings of mature stock in Scottish plants ended the year significantly higher than they had closed 2011 with numbers rising by 13.5% to 5,200 head. This pushed the level of increase in the full year up to 3%. The increased cow kill partially offset lower prime cattle production and meant that the total volume of beef produced by Scottish abattoirs in 2012 fell by 7.5% to 169,800t.

In the 12 weeks to 23 December, consumption data from market research firm Kantar showed that almost 3% more beef was purchased by UK household’s when compared with the same period of 2011. With the average price up nearly 5%, it took an additional cash outlay of 8% to secure this volume of beef; a clear indication of strong consumer demand for beef. Within the data there was a shift in purchases towards steaks and mince from stewing cuts and roasts. However, mince accounted for 43.5% of sales volumes in the four weeks leading up to Christmas versus 37% in 2010 and 40.5% in 2011. This reflects quicker prices rises higher up the value scale as mince’s share of spending has shown more stability at around 30% of the total.

UK Vs EU27 Price (Steers R3)

EU prime cattle prices have shown stability in the early part of 2013 with steers and heifers flat and young bulls becoming slightly cheaper. However, when converted into Sterling terms, prices in the week ended 27 January were up 3% on the month for steers and heifers, and by 2.5% for young bulls as the Euro strengthened from 81p to 84.5p against the Pound. Currency movements have narrowed the gap between UK and Irish prices on the home market with steers trading at a 25p/kg premium in the UK at the end of January compared with a 43p/kg premium as 2012 drew to a close. However, one year ago this premium had stood at just 2.5p/kg. Prices in the UK became more competitive against most other EU countries in January in both Sterling and Euro terms.

UK Beef Exports

During November, UK beef exports grew on the previous month for the fifth time in a row and reached their highest level in the year-to-date. Although deliveries still trailed year earlier levels by 100t, this compares favourably with an average deficit of 2,300t in the first eleven months of 2012. Despite tight supplies restricting exports for much of 2012 and shipments in the January to November period falling 19% year-on-year, exports in the first eleven months still exceeded the total volume of shipments in 2010.

During November, deliveries to EU markets were generally lower than in the same month of 2011. However, there were significant improvements in sales to Germany and Spain, while the UK’s second largest customer, Ireland, bought 60% more beef than a year earlier. In terms of shipments to third countries, volumes were at their second highest volume in the year-to-date. Ghana and Hong Kong & China continued to prove growth markets for shipments of frozen product, but there were no sales to South Africa in November.

UK Beef Imports

The combination of tight UK supplies and a stronger Sterling encouraged trading partners to deliver beef into the UK market throughout much of 2012. As a consequence, shipments rose 1.5% in the first eleven months. However, this reflects a considerable increase in deliveries of frozen product during the spring (possibly in advance of the Olympics). Indeed, the import of frozen beef fell behind 2011 levels from September onwards. Furthermore, imports of fresh beef have generally trailed 2011 levels and fell 2.5% in the January to November period.

With tight supplies also being experienced in the UK’s major beef supplier, Ireland, imports have been rebalanced to other EU countries such as Holland, Germany, Poland and France. There has also been an increase in product coming from South America (up 13%) as increased imports from Brazil and Argentina have offset declines in shipments from Uruguay. Shipments from Oceania are relatively flat as a greater supply of Australian product has been counterbalanced by a decline in beef coming from New Zealand.

News Round Up

After being much tighter than year earlier levels for much of 2012, supplies of prime cattle into Irish export plants picked up in December. 13% more prime cattle were killed than in December 2011, compared with a 13% shortfall in the year as a whole. This turnaround continued into the New Year with numbers up by nearly 3% yearon- year in January. This change in conditions indicates that the increased numbers of cattle less than twelve months old in Ireland’s December 2011 census have finally begun to have an effect on the availability of slaughter cattle.

USDA figures indicate that the US cattle herd contracted by 1.6% in 2012 to 89.3m head. This puts the herd at a 61-year low. However, the population was above expectations as more heifers had been retained for future breeding due to strong prices in futures markets giving producers the necessary confidence to expand. Futures markets are heavily used by livestock farmers in the US to minimise downside risk in a falling market and lock in future profits when prices pick up. Meanwhile, the spike in feed costs last summer has led to seven months of declining numbers of cattle in feedlots. Consequently, as 2013 commenced, there were 6% fewer cattle in US feedlots than a year earlier with numbers falling to 11.2m head. Tight supplies of finished cattle helped push average US beef retail prices to a record high of $11.36/kg in November (£7.22/kg). However, in December they eased slightly to $11.27/kg (£7.16); an increase of 2% year-on-year.

On February 11, Russia is set to implement a long-expected ban on imports of US beef. The ban relates to the feed additive, ractopamine, which is used by producers to boost lean meat growth, but is illegal in Russia. The ban will be temporary but no official timescale has been released. It has been imposed due to the lack of efforts made by the US to prevent beef with ractopamine residues present from being sent to Russia, despite numerous requests to take action. In the opening eleven months of 2012 Russia imported 50,000t of beef from the US; an increase of 6% on the year.

However, the negative effects of Russian trade policy on the US beef industry may well be offset by a relaxation of import restrictions in its second largest customer, Japan. Since 2005, when a two-year ban on imports of beef from the US ended, only beef from US cattle aged under 20 months has been permitted to be exported to Japan due to continuing worries over BSE. However, this has now been extended to 30 months. This change comes in line with a similar relaxation of the domestic BSE-testing regime to cover only cattle over 30 months of age. Although the US exported almost 130,000t of beef to Japan in the first eleven months of 2012, shipments have fallen by around 60% since 2002 and 2003.

While many South American countries grew their beef exports in 2012, Argentina was the main exception. Exports contracted by 31% to a 10-year low as government policy aiming to keep the domestic market well supplied with affordable beef heavily restricted the ability of meat companies to sell into foreign markets. Nevertheless, Argentina did send 31% more fresh beef to Chile than in 2011 with shipments reaching 26,300t. This growth made Chile Argentina’s principal export market. Israel and Russia took second and third place with respective import volumes of 20,100t and 15,100t. 61% of deliveries to EU customers under the Hilton quota for high quality beef were sent to Germany. It purchased 13,000t at an average value of $15,000/t (£9,600), while Holland took 5,000t and Italy a further 2,850t. Though deliveries of high quality beef to the UK grew, they remained at a very low volume of approximately 170t.

The case of BSE reported at the end of 2012 in Brazil does not appear to have had a major effect on the country’s ability to export. Indeed, in January, exports of fresh and frozen beef of 89,000t exceeded year earlier levels by 7%. Trade was assisted by a 5% fall in prices in US Dollar terms. However, the significant fall in the value of the Brazilian Real meant that the average export value increased when denominated in domestic currency. The depreciation of the Real in 2012, due to government intervention, helped drive Brazil’s annual exports forward by 15% to 945,500t. Russia was Brazil’s most important customer, purchasing 253,900t.

Sheep

Prices and Supplies

Prime sheep prices at Scottish auctions have begun the year pretty much as they left last year, trading a few pence either side of the 150p/kg lwt mark. Prices have been stuck around this level since October, although favourable exchange rate movements did give the market a boost in the opening week of February. For producers, current conditions compare unfavourably with January 2012 during which markets had cleared above £2 a kilo. At GB abattoirs, average January prices were generally in the 330-335p/kg dwt range; down from the high 350s at the start of December and the lowto- mid 360s through October and November. One year ago deadweight hoggs had been trading at 440p/kg.

Lamb SQQ Auction Price

From first principles, a look at the supply side appears to contradict the pricing situation with both prices and supplies well below year earlier levels in the final quarter of 2012 (Q4). Slaughterings at Scottish abattoirs were down by 17% year-on-year in December and by 21% in Q4. Under normal market conditions one might expect this to push prices higher, but in reality the opposite has happened with the market down 25% from last year. However, the shortage of supply has been caused by slower growing lambs due to wet weather throughout the 2012/13 season. Subsequently, carcase weights have been lighter and there has been a negative impact on quality and hence prices. For example, at Scottish abattoirs in December, the average lamb weighed 19.8kg versus 20.3kg a year earlier.

GB Deadweight R3L Lamb Price

At UK abattoirs, supplies were also tight in Q4 2012; down 2.5% year-on-year, with overall sheepmeat volumes down 4.5% as carcase weights averaged 2.5% lighter at 18.5kg. However, in contrast to Scotland, there was a 5% year-on-year improvement in numbers in December; although this translated into just 400t more lamb (2%). Nevertheless, this slight improvement in supply at the UK level as 2012 drew to a close may help explain why prices failed to pick-up seasonally.

Clean Sheep - Scottish Slaughterings 3 Week Rolling Average

This pattern of slightly better supply may well have continued into January. Indeed, both auction numbers and the size of the deadweight price reporting sample exceeded year earlier levels, and are therefore likely to have placed downwards pressure on prices. For example, GB auction numbers rose by 1.5% year-on-year to 341,500 head in the four weeks to January 30. The pick-up in numbers implies that producers are now marketing hoggs that would have originally been earmarked for sale late last year, or in some cases, even the autumn.

Although a better supplied market may now be holding down prices, it cannot fully explain the extent of the year-on-year differential. As touched on above, one factor contributing to lower prices has been poorer carcase quality. From late October through to the year-end the proportion of lambs in the deadweight sample achieving an R3L grade or better trailed its year earlier level by around 2%. However, January saw a fractional improvement; implying that quality may now be playing less of a part. By contrast, the proportion of hoggs in the lower weight category of the deadweight sample remained high by historical standards. In the week ending 2 February, 16% of hoggs were in the lighter 12-16kg category compared with 9% in the same week of 2012. Anecdotal evidence suggests that liver fluke has been a significant problem in recent months and this will have placed downwards pressure on prices by limiting a potential income stream for processors in the form of offal sales.

On the demand side, Kantar data for the twelve weeks to December 23 indicates that lamb sales remained considerably higher than a year earlier; a pattern that has been consistent since Easter 2012. Household purchases were up 7% year-on-year with leg roasting joints proving popular. Though prices were lower than in the same period of 2011, the rise in consumption appeared to be less discount-fuelled than in earlier parts of the year; indeed leg roasting joint sales rose 30% from only a 6% lower price. This sign of strengthening demand is supported by the four week figures to December 23 in which sales volumes rose despite slightly higher prices across the range of cuts.

Similar to the market for prime sheep, cull ewe prices have lacked direction since October. At the end of January, prices at Scottish auctions averaged £45.80 a head; slightly above their average over the past four months. Compared with January 2012, cull ewes have been selling for around £30 a head less. Auction volumes in January were up 16% in Scotland and by 10% in GB.

Though auction numbers have opened 2013 stronger, slaughter data for Q4 2012 showed that 4% fewer ewes were slaughtered year-on-year at the UK level. That prices fell sharply at the beginning of Q4 when supplies were tight, and then remained stable in January despite the pick-up in kill volumes points to a lack of demand for cull ewes.

Heavy Lambs: GB Vs French Price

Irish prices for heavy lambs have moved in a similar fashion to the UK market. Compared with the end of December, Irish prices are marginally higher, but remain 24% below year earlier levels. In France and Spain, producers have seen significantly lower returns from the marketplace with prices down by a respective 2.5% and 5% on the month and by 8.5% and 16.5% on the year. By contrast, German producer prices rose by 6.5% in the four weeks to January 27, and, at €5.22/kg dwt (440p/kg), this was 5% higher than one year ago.

While domestic factors can partially explain current market conditions, the UK sheepmeat market is also heavily dependent on trade patterns, and hence exchange rate movements. In Q4 2012 Sterling averaged 6% stronger against the Euro yearon- year and this placed significant downwards pressure on UK farmgate prices through the requirement for prices to be reduced in order to keep UK sheepmeat competitive in key European export markets. However, the Euro strengthened significantly against the Pound through January, settling at around 86.5p in the opening week of February and may well have driven the increase in auction prices in the week to February 6. The factors driving this step-change have included an improvement in Euro Area economic data which suggests that activity may have bottomed out and has begun to pick up; plus a large repayment of emergency European Central Bank loans from the continent’s banking sector which, through the removal of Euros from the system, pushed up their value.

UK Lamb Exports

In terms of export volumes, the latest available data from HMRC is for the month of November. UK exports totalled 8,500t; down 16% year-on-year. This followed on from respective declines of 16% and 18.5% in September and October. Around one-third of domestic production was shipped overseas in November compared with 36% a year earlier. This implies that tight supplies limited the volume of lamb available for export while the exchange rate and a weak EU economy in the autumn pulled back on the demand side. Export volumes in the January to November period fell 7.5% year-on-year despite having been 1% higher at the end of June.

A significant factor behind the overall decline in lamb exports is France, the UK’s principal customer. In September and October shipments trailed 2011 volumes by more than 20% and provisional figures for November show a 40% shortfall. Deliveries to other EU markets were generally lower than in the same month of 2011; although Portugal and Holland did purchase significantly more. Non-EU markets took some of this slack in November, buying 26.5% of the total tonnage compared with an average of 11% in the first ten months. Monthly deliveries of 1,600t to Hong Kong exceeded their entire 2011 total, while Norway bought 450t in November compared with 480t in the whole of 2011. While extra demand from overseas may help support the market price, the shipments to Hong Kong were frozen cuts at the cheaper end of the value scale. Furthermore, since they have essentially offset some of the decline in exports of higher value product to the EU, they may have had only a weak impact on the overall market.

UK Lamb Imports

Once again in November, the combination of tight supplies of home produced lamb, higher domestic retail sales, and the greater availability of competitively priced lamb in the global market place continued to push imports higher. Deliveries rose 30% on the year to 7,000t. Increased slaughterings in New Zealand allowed it to ship more lamb to the UK and imports duly increased by 26.5% on the year to 4,300t. In addition, the average cost of lamb imported from New Zealand fell by nearly 20% from a year earlier. This combination of higher imports at lower prices continued to place considerable downwards pressure on UK farmgate prices. In terms of other suppliers, both Ireland and Australia continued to have a greater availability of sheepmeat to export, while November imports from France, Spain and Uruguay also exceeded 2011 levels.

News Round up

In the first eleven months of 2012 the EU produced 514,750t of lamb. This was 17,000 fewer tonnes (3%) than in the same period of 2011. Excluding UK production from the total, the shortfall narrows to 6,250t (2%) with production summing to 306,700t. More recently, combining October and November production data shows that, at the EU level, supplies remained tight and were down 3% yearon- year. However, once UK figures have been excluded, production actually rose by 2%. Increased lamb volumes in Ireland, Italy and Greece more than offset declines in Spain and France.

A link between France and Bulgaria has been set up to essentially ‘off-shore’ some of France’s lamb production. The agreement will see French ovine genetics exported to Bulgaria where lambs can then be produced and slaughtered more cheaply. The meat will then imported back to France for sale at a cheaper retail price than if the full chain of production had been located in France.

Farmgate prices have continued to cool in New Zealand at the beginning of 2013. On February 1, 19kg South Island carcases traded at NZ$4.62/kg (245p/kg dwt). This was 4.5% lower than in the first week of the year and 30% below year earlier levels. In December, prices had fallen by 3%.

In Q4 2012 New Zealand slaughtered more than 4.5m lambs; an increase of 10.5% year-on-year. However, most of this rise came through in October and November, with December slaughter data showing that throughputs were only 1.5% above year earlier levels. During 2012 nearly 19.8m lambs were killed compared with less than 19.1m in 2011; a rise of 4%.

During 2012, Australian lamb exports grew by 18% over 2011 levels, reaching 188,600t. This was a record volume and was driven by the combination of higher slaughter numbers and slightly heavier lambs which pushed production 13% higher to 443,500t, while sharply lower prices helped strengthen demand. The Middle East imported nearly 50% more lamb from Australia than it had in the previous year with volumes rising to 51,800t. There was also growth into the second and third most important markets of North America (up 8% to 41,350t) and China, Hong Kong & Taiwan (up 17% to 34,600t). Figures for January 2013 showed a further increase in Australian lamb exports. Volumes rose by 45% year-on-year to 15,200t as extremely warm and dry weather pushed producers to sell lambs into the market and increased production left a greater volume of lamb available for export. The Middle East showed substantial growth with a 49% increase over the first month of 2012. In particular, Bahrain bought more than 1,000t of carcases compared with barely any lamb a year earlier (although this may well have replaced the live trade which has been suspended). In addition, January shipments to the US grew more than 70% on the year to 3,350t. The majority of this lamb was primal and leg, whereas the Chinese market (up 70% to 2,700t) tended to buy meat from the shoulder and the breast & flap.

During November, Uruguay slaughtered 189,400 sheep; an increase of one-quarter when compared with the same month last year when 151,100 had been killed. However, in the first eleven months of 2012 abattoir throughput rose by a more modest 4% to 962,700 head. Increased production allowed Uruguay to export more sheepmeat. As a consequence, export volumes rose by 10.5% year-on-year over the eleven month period to 12,250t. Neighbouring Brazil was Uruguay’s largest market, accounting for more than 40% of sales.

Pigs

Prices and Supplies

In January, prime pig prices followed a similar trend to the previous two years, softening due to seasonally weak demand. Having opened 2013 at 160.4p/kg, the DAPP closed January at 157.7p/kg dwt. However, prices have cooled at a slower pace this year and the year-on-year premium has widened from 9% to 12%.

Pigs DWt Adjusted Euro Spec Average - GB

Defra slaughter data for December showed a significant increase in slaughterings of prime pigs at UK abattoirs. Over the course of the month 769,400 pigs were killed; up 3.5% year-on-year. This helped push total throughput in the calendar year above 10m head for the first time since 2002. Slaughterings rose by nearly 2.5% in 2012, with total UK pigmeat production expanding by a similar margin to reach 824,600t.

30kg Weaner Pigs - GB

Prime pig slaughterings steadied in Scotland during December at just under 27,000 head. However, due to the closure of slaughtering facilities in Broxburn, overall numbers were less than half of year earlier levels. In the year as a whole, prime pig throughput declined by 7% to 585,000 head but remained higher than in 2010.

Clean Pigs - Scottish Slaughterings 3 Week Rolling Average

Data from Kantar for UK household pork consumption in the 12 weeks to December 23 showed a 7.5% decline year-on-year. This sharp decrease was due to significantly higher prices at the retail level as cash spending on pork was in fact up slightly. The average price per kilogram of pork rose 8.5%. However, the figures improved towards the year-end with volumes down 1% year-on-year in the four weeks to December 23. In terms of specific cuts, only pork loin roasting joints showed growth, and this came despite higher prices. Sales volumes rose almost one-fifth in the twelve week period.

In the week ended February 2, weaner prices slipped back for the first time in five months to £46.32 a head. Uncertainty surrounding the prospects for finished pig prices in the spring has held the market for 30kg weaners relatively stable for the past two months. However, five months of growth reversed the sharp fall of summer 2012, adding £7.50 to their price. Consequently they are now nearly £2 a head (4%) more expensive than at the same time last year.

Cull sow prices retreated considerably in December and January with a 17.5% decline from an average deadweight value of 111p/kg in the week to December 2 down to 91.7p/kg in the week ended January 27. The decline through December came despite lower abattoir throughput, indicating that the heavily export-oriented sow market was weakened by sluggish EU demand. However, a weaker Sterling now looks to have turned the market with prices rising to 94.2p/kg dwt in the week ended February 2. Nevertheless, sows still traded 13% cheaper than in the same week last year.

UK Vs EU Price (Grade E Pigs)

The recent cooling of the GB producer price has helped improve competitiveness both in the home market and on the continent. In Sterling terms, the premium for a British Grade E pig over the EU average of 142.7p/kg stood at 10p/kg at the end of January; its narrowest since early November. When looked at in Euro terms, due to exchange rate movements, GB prices are at a seven-and-a-half month low of €1.81/kg dwt. While prices have fallen back around 2% over the past month in Germany, France, Holland and Ireland, Spanish and Italian producers have gained around an extra 4% for their pigs.

UK Pork Exports

UK pork exports exceeded year earlier volumes for a fourth consecutive month in November. Shipments, which totalled just over 14,000t, were up 13% year-on-year. In the first eleven months of the year deliveries rose by 6%. Growth in exports had been more modest earlier in the year until shipments to China and Hong Kong began to pickup in the summer. The opening of the Chinese market after several years of negotiations has added around 2,000t to UK pork exports per month.

UK Pork Imports

During November, UK pork imports surpassed year earlier levels for the second month in succession. 33,500t was imported; a 3.5% increase yearon- year. This volume was also a 17- month high and the largest November import figure in 5 years. Nevertheless, deliveries in the January to November period were still down 6% on the same period of 2011.

News Round up

Feed wheat prices firmed in the second half of January with a tonne costing £220 at the farm gate in North East Scotland, and around £230/t delivered in central Scotland. Although higher than they opened 2013, prices remain below the levels reached at the end of November and beginning of December. Compared to this time last year the price of feed wheat has risen by approximately one-third (£60/t). As well as pushing up prices of domestically produced wheat, tight supplies have forced imports higher and a weaker Sterling has raised the cost of importing wheat in recent weeks. However, upward revisions to estimates of global production have kept prices below their December peak. In terms of soyabean meal, Chicago futures have returned to levels last seen in the spring of 2012 as prospects for harvests in Brazil and Argentina continue to look strong and US production is now thought to have been less affected by the summer drought than had initially been assumed. Nevertheless, higher Chinese imports have been underpinning the market and a weaker Sterling against the US Dollar has raised the cost of imported soya.

Figures presented to EU farm ministers in late January showed that as of January 15 just ten member states were fully compliant with the ban on sow stalls. A further five member states were at 98-99%, including Holland and Italy, while Poland, Denmark and Spain were at compliance levels of 93%, 94% and 96% respectively. Although the latest data looks much better than at the beginning of December, major producing nations such as Germany, France and Ireland were still lagging well behind despite having 12 years to prepare for the change. French compliance stood at 72%, Germany at 73% and Ireland at 82%. The EU is due to begin issuing official warnings to non-compliant countries at the end of February. In terms of the proportion of overall EU sow numbers, around 75% were thought to have been housed suitably in January, leaving more than 3m in sub-standard conditions.

Spanish pig slaughter data showed a 4.5% decrease in numbers and a 5% decrease in production volumes during November 2012. 3.64m pigs were killed by Spanish abattoirs in November, producing 302,900t of pigmeat compared with the 318,800t produced from 3.81m pigs in the same month of 2011. In the January to November period, slaughterings totalled 39m head and this produced 3.24mt of pigmeat.

The suspension of US beef exports to Russia due to commence on February 11 will also apply to pork. The temporary ban applies to both carcase meat and manufactured pork products and has been imposed because the US has neither been able to ensure that exports remain free from ractopamine residues, nor present any evidence that it has attempted to resolve the issue. The US delivered 94,500t of fresh and frozen pork to Russia in the first eleven months of 2012; an increase of 40% on the year. This was just under 6% of total US export volumes of 1.668mt.

The pig sector in Korea is now beginning to get back to normal following the major outbreak of FMD two years ago which led to the mass culling of pigs and decimated the country’s pork production. The Korean government subsequently suspended protectionist trade measures and imports of pork flooded in to replace the lost domestic output. In 2011, imports needed to increase by two-thirds to nearly 500,000t to balance the market. However, as domestic production began to recover in 2012, the import requirement fell sharply as the year progressed. Indeed, in Q4, volumes were down 13% year-on-year and only 3% above their Q4 2010 level. The annual total of imports, at 381,000t, remained more than 30% above 2010 levels.

February 2013

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