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AHDB European Market Survey


18 June 2012

AHDB European Market Survey - 15 June 2012AHDB European Market Survey - 15 June 2012

Total EU pig slaughterings were down by almost one per cent in the first quarter of 2012 compared with a year earlier given fewer slaughter pigs on farms but with very different trends by Member State.

AHDB

EU pig slaughterings edging down

Total EU pig slaughterings were down by almost one per cent in the first quarter of 2012 compared with a year earlier given fewer slaughter pigs on farms but with very different trends by Member State. There were also considerable differences by month with March slaughterings down four per cent year on year in spite of Easter being earlier this year. In contrast, slaughterings in January and February were both up year on year but last year’s cold winter in the EU had the effect of delaying marketings.

Of the major producing Member States, only Spain, Italy and the UK recorded year on year growth in pig slaughterings. Growth was especially marked in Spain at five per cent, although this was entirely the result of higher marketings in January and February with a decline of four per cent in March. Similar monthly developments occurred in Italy with slaughterings up nearly three per cent in the quarter of a whole. Slaughterings in the UK were up mainly due to a rise of five per cent in January. Germany, the largest producer, accounting for 23 per cent of EU slaughterings, experienced a small fall in the first quarter with lower year on year levels in February and also March. This reflects reduced availability of German finished pigs as slaughter pig imports were up 12 per cent to 1.2 million.

The one per cent decline in France in the first quarter was due entirely to a nine per cent drop in slaughterings in March. Slaughterings in the Netherlands fell by seven per cent in the same month. This contributed to the three per cent reduction in the quarter as a whole despite lower exports of both weaners and slaughter pigs. In contrast, the fall in Danish slaughterings of five per cent in the first quarter was the result of similar year on year falls in each month. Increased weaner exports towards the end of last year contributing to this fall. Of the smaller producers there were marked year on year falls of nine per cent in the Czech Republic, Hungary and Sweden and six per cent in Portugal. Ireland and Romania recorded year on year growth of seven per cent and nine per cent respectively.

Forecasts from Eurostat made in April 2012 indicate that gross indigenous slaughterings in the EU-27 will show no change in 2012 as a whole in spite of a fall of three per cent in the sow herd last December. However some uncertainty inevitably surrounds the forecasts including the fact as to how some producers will react to the forthcoming partial stall and tether ban. Some slaughtering data is available for the first part of the second quarter, and given also the results of the December 2011 pig survey, this would suggest that pig slaughtering will not be up year on year in the quarter as a whole. Carcase weights in the EU edged up only slightly (by 0.2 kg) year on year in the first quarter of 2012 and pig meat production was down 0.5 per cent following an increase of almost two per cent in 2011 as a whole.

Strong growth in Chilean meat production

Over recent years, Chile has experienced rapid growth in its meat production. This has been mainly driven by poultry and pig meat reflecting steady investment in both sectors and opportunities offered on export markets given the high animal health status of Chile. For all four meats Chile has negotiated concessionary arrangements for supplying the EU. The increase in production has continued into the first quarter of 2012, making Chile an increasingly important player in terms of global meat trade. Last year, Chile exported over 100,000 tonnes of pork and was the largest external supplier of pig meat to the EU. It also exported nearly 100,000 tonnes of poultry meat and is a small exporter of sheep meat, but a net importer of beef.

The poultry meat sector remains the largest contributor to Chile’s meat production, with an output of 657,000 tonnes in 2011, up by 11 per cent compared with 2010. This growth has continued in the first quarter of 2012, with production six per cent higher than in the same period of 2011, with a particularly rapid rise in turkey production. Last year, Chile exported 97,000 tonnes of poultry meat, up nine per cent from 2010. The UK was its fourth largest market, after Mexico, China and the US, taking 9,000 tonnes. However, shipments to the UK in the first quarter of 2012 were less than half their level a year earlier, contributing to a one per cent decline in exports overall. The quota to supply poultry meat to the EU amounted to 13,050 tonnes in 2011 and increased to 13,775 tonnes in 2012.

Since 2000, Chile’s pork production has more than doubled. Growth between 2010 and 2011 continued at a similar rate, rising six per cent to 528,000 tonnes. Figures for the first quarter of 2012 showed that the rapid expansion in production continued, up by seven per cent to 134,000 tonnes. The rapid growth in pig meat production is shown in export figures, with the quantity of fresh and frozen pork exported rising by eight per cent in 2011 to 101,000 tonnes. The two main markets are South Korea and Japan which between them accounted for over 60 per cent of the total. Trade with the latter developed as Japan was looking for alternative supply sources for fresh pork in the mid 1990’s when FMD hit Taiwan and Denmark leading to Nippon Meats, one of the country’s largest processors, buying from Chile since 1997. Chile is also the largest external supplier of pork to the EU, shipping 6,900 tonnes in 2011, including 1,500 tonnes to the UK. The duty free quota to supply the EU amounted to 6,300 tonnes in 2011, increasing by 350 tonnes each year.

Total exports continued to rise in the first quarter of 2012, with volumes up by 12 per cent to 26,000 tonnes, helped by big increases in shipments to Russia and Colombia and the opening up of China to Chilean pork. This helped to offset a one third decrease in shipments to Japan, which imposed restrictions following the detection of dioxins in pork from Chile last year.

During 2011, Chilean pig prices increased in line with those elsewhere in the world, despite the increased production. In US dollar terms, the average liveweight price during the year was $1.62 per kg, 10 per cent higher than in 2010. This was reflected in export prices which increased by 16 per cent year on year to $4,000 per tonne. In the early part of 2012, prices have eased back slightly both on the domestic and export markets.

An article covering details of the Chilean beef and sheep meat will be included next week.

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