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AHDB Pork Weekly Export Bulletin


13 December 2011

BPEX Export Bulletin - Week 49BPEX Export Bulletin - Week 49

The British Pig Executive's (BPEX) Export Bulletin for the second week of December 2011 reports pig industry trends from around the world. Among the highlights are that European pork exports broke a new record with 325,000 tonnes in September, according to the European Commission. Exports were up 22 per cent so far this year, with volumes to Russia, Hong Kong, mainland China, Japan and Korea doing exceptionally well.
British Pig Executive Weekly Export Bulletin

Denmark

Market

On the European market fresh legs are sold at slightly falling prices. Other cuts are sold at by and large unchanged prices. The underlying market is not positive and it is estimated that there will be a slow-down already in one or two weeks when the Christmas trade will be finally ending. The situation on the British bacon market remains unchanged compared to later weeks. It is expected that the market will remain unchanged until Christmas. On third country markets, the situation is stable with respect to Japan and Russia. Now there are new orders to China to be delivered after the Chinese New Year but prices are reduced.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

British consumers want improved animal welfare

Demands from British consumers can overtake Danish politicians on the inside with respect to animal welfare. The chairman of Tican, Jens Jørgen Henriksen, has said that currently, there are increasing demands for animal welfare on the important British market. British consumers want the so-called 'UK pig' to be produced under better animal welfare conditions – as well as pigs reared in the British Isles. Behind is a clear ambition from supermarket chains to deliver more pork produced under higher animal welfare conditions and for British consumers, it would ultimately include non-castrated pigs. The UK being the most important market for Tican, the slaughterhouse must of course meet such demands says the Tican chairman, explaining that British consumers already are prepared today to pay a high price for pig meat. He added that the slaughterhouses must consider the demands an opportunity.
(Source, Landbrugasavisen)

Tican’s pig producers need more capital

According to chairman Jens Jørgen Henriksen, Tican’s pig producers must consolidate approximately five cents per delivered kg pig meat to the slaughterhouse in order to live up to the growth plan, meaning that within 10 years, the 330 co-operatively owners of Tican must save up approximately €75 million. Every year, a considerable number of pig producers will leave the slaughterhouse because they close down. On the other hand, the remaining owners deliver an increasing number of pigs to the slaughterhouse. It also means that within a short period, there will probably be less than 300 farmers left to build up capital. So the company is going to further discuss the final constellation over the next year.
(Source, Landbrugsavisen)

Danish Crown increases employment abroad

Today, two out of three Danish Crown employees work abroad. Over the latest six years, Danish Crown got 4,500 more employees abroad while the same number of jobs has disappeared at Danish Crown factories in Denmark. The development has continued in 2010/11, when Danish Crown got approximately 1,500 new employees abroad while the Danish workforce remained fairly intact. Since the financial year 2005/06, Danish Crown investments were also significantly higher abroad than in Denmark. Besides having the goods produced at a much cheaper price by Polish and German employees, Danish Crown also gets much closer to the foreign customers with a mix of imported Danish products and national products.
(Source, Danish Crown)

Tulip prepared for acquisitions in European processing industry

The sausage and cold cuts producer, Tulip Food Company, is in a favorable position for further expansion. Last year, the company bought a large factory in Germany but it sees more opportunities for strengthening its position in Europe. Currently, all processing companies are pressed by high prices on raw material such as meat, intestines and packaging as well as other input goods for the production. The result is that some companies are ready for a take-over, evaluates the Danish Crown subsidiary. The best strategy is to invest in a downturn if the economy of the company allows so. "Accordingly, we must use the challenge that all companies in the sector are facing to further strengthen Tulip," says CEO, Flemming N. Enevoldsen. Tulip just published its financial statement and with a business profit of approximately €35 million, it has delivered its second best result ever in its history. The annual turnover is slightly increasing and sums up to €560 million.
(Source, Landbrugsavisen)

Mikkelsen steps down as chairman of Danish Crown

Niels Mikkelsen has announced that he is resigning as chairman of Danish Crown and leaving the board of directors. Mr Mikkelsen was chairman of Danish Crown and Vestjyske Slagterier for 16 years and has participated in a significant growth period for Danish Crown. The board of directors is likely to appoint deputy chairman, Erik Bredholt, as a new chairman.
(Source, Danish Crown)

Danish slaughterhouses – payments week commencing 5 December 2011
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.468
Unchanged
Euro 1.468
Unchanged
Sows (above 129.9kg)
Difference to last week
Euro 1.054
Unchanged
Euro 1.054
Unchanged
Boars (above 109.9kg)
Difference to last week
Euro 0.921
Unchanged
Euro 0.921
Unchanged

France

Farm charcuterie

The development of direct sales is an opportunity for pig producers. Processing and marketing a carcass takes between 15 and 20 hours, depending on butcher/sales skills. Thus the processing of 80 to 100 pigs per year is a full-time job. The selling price must be carefully calculated and some basic information is required: the carcasses weigh between 100 and 150kg and represent 78 per cent of live weight. Gross carcass weight varies between 65 per cent and 75 per cent, depending on the range of products processed. Drying time is between four and five weeks for sausages, two to three 3 months for saucissons (dry thick coarse sausages), six to nine months for ham. The weight loss is between 30 and 40 per cent. Experts say the minimum size of a processing room is 60 square metres and the cost is approximately €1,200 per square metre. The necessary budget for equipment is between €50,000 and €60,000.

Herta committed

Recipes to produce Knacki sausages use less salt (1.8 per cent compared with 2.0 per cent until now), also the fat content of these sausages is reduced from 25 to 24 per cent. Other products of the Herta range will see their salt content reduced (ham, bacon, lardons). Finally, the cooked ham leader (19.1 per cent market share in value and 14.6 per cent in volume) will now be presented in recycled trays. 23 million recycled trays will be used over the first 12 months.

Pork

Our base price lost 0.8 cents yesterday. Demand is still low, even if the sales seem a little higher because of the supplying of stores at the beginning of the month.

Piglets

Firmness is still a reality of the present day. Offers remain limited and lower than needs of the moment. The FNB-FNCBV indices lost 15 cents for a 25-kg weaner and €2.54 for an 8-kg animal last week.

Cuts

It is no great surprise that the beginning of the week is very calm for the abattoirs. The beginning of the month and the opening of stores on the Sundays before Christmas are good for the market. At the same time, retailers maintain the pressure on prices. Prices slow down for hams and loins but are good for shoulders.

Pork prices Rungis, week commencing 5 December 2011
Cut name Price range (Euro/kg)
Back fat, rind-on 1.05
Trimmings 1.56
Leg 2.38
Loin including chump 2.88
Loin excluding chump 2.54
Belly extra without trimmings 2.54

Germany

Market

Quotations on the wholesale markets remain mainly unchanged. Large numbers of half carcasses are sold at unchanged prices. Filets are sold at slightly increased prices and so are loins and ham meat for Schnitzel production. Relatively large quantities of hams, chops, collars and bellies are marketed without difficulties at mostly unchanged prices.

Customers react to increased prices

Customers are reacting to the often significantly increased prices for meat and cold cuts by considerably reducing their consumption of these products. This is the result of a recent research undertaken by GfK Consumer Index. While prices for fresh meat increased by nine per cent during October, sales increased by seven per cent only due to reduced demand (-1.4 per cent). On cold cuts, prices increased by four per cent, sales by one per cent and the volume sold decreased by 3.1 per cent.
(Source, afz)

Pork prices, Hamburg, market week commencing 5 December 2011
Cut Name Price range (€/kg)
Round cut leg 2.35/2.50
Leg (boneless, rindless max fat level 3mm) 3.20/3.35
Boneless Shoulder 2.65/2.80
Picnic Shoulder 2.15/2.35
Collar 2.30/2.45
Belly (bone in, ex-breast) 2.45/2.60
Sheet Boned Belly (rindless) 2.45/2.65
Jowl 1.60/1.85
Half Pig Carcasses U class. 2.05/2.15

Netherlands

Extra pigs for Vion

In response to strong demand before Christmas in the second part of December, Vion is asking producers to send a lot more slaughter pigs.
(Source, Agrarisch Dagblad)

Farm in receivership

Low weaner prices have led the 4,500 sows farms of Verhaijen Bros to be placed in receivership.
(Source, Agrarisch Dagblad)

Topigs exports

The company has completed the shipment of 1,003 breeding pigs to China from its Canadian nucleus in a joint venture with Huanshan in Shandong province. The gilts will be marketed in the Hubei, Shanghai, Jiansu and Jilin provinces.

Italy

New PGI for dry-cured ham

The Prosciutto Amatriciano from Lazio has been awarded the Protected Geographical Indication label from the European Commission, the 12th type of Italian dry-cured to be awarded this distinction.
(Source, Suinicoltora)

Changes in pig production: two-speed Italy

In 2000, the average pig producer in Italy held 45 pigs. In 2010, this has risen to 369. The average is highest in Lombardy with 1,840 pigs, Emilia-Romagna with 1,054 and Piemonte with 924. It remains incredibly low in Valle d’Aoste with eight pigs, Liguria with pigs, Bolzano 11, the South with 48 pigs and the islands with 39 pigs.
(Source, Suinicoltora)

Big fall in pig holdings

In 2000, some 193,000 farms held pigs in Italy. Ten years later, there are only 26,000. In the South, the number of pig farms has fallen from 96,000 to 7,700, in Central Italy from 46,000 to 4,600 and the North East from 24,000 to 4,100. In proportion, the reduction has been more limited in the specialised large-scale region of the North with 2,600 farms left in Lombardy, 1,200 both in Emilia-Romagna and Piemonte.
(Source, Suinicoltora)

Sector difficulties

Recent price increases and lower feed cost have alleviated the worst effects of the crisis. Good home and export demand for dry-cured products leading to Christmas is sustaining pork prices for the time being despite the severe economic crisis and the tax increases.
(Source, various)

Spain

Meat production is expanding

According to the Ministry of Agriculture, meat production has grown by 3.4 per cent in the period January to September against the same period of 2010 to 4.219 million tonnes. Pork production represents 60 per cent and rose by 3.7 per cent.

Russia

Kazakhstan will supply pork to Russia

A pig breeding complex of KZT2.5 billion (US$16,932,000) was launched in Zhambyl in Kazakhstan. The manufactured products will be sold not only inside the country but exported to Russia as well. The capacity of the complex is 2,000 tonnes of meat per year. As of now, 17,000 pigs were brought to the complex. It is equipped with the most advanced technologies allowing the manufacture of high quality meat. Strict veterinary control will also take place at every step of pig-breeding – from the birth of a pig to its slaughter. The complex also has technologies for manufacturing biogas. Currently, 5,000 cubic metres of biogas are manufactured and used for the needs of the complex. Speaking of statistics, as of 1 November 2011, the total number of pigs in all kinds of farms and households was 1,872,400. At the same date in 2011, the number totalled 1,907,500 pigs.
(Source, Kazakh-Zerno)

New outbreaks of African Swine Fever

Rosselkhoznadzor registered new outbreaks of ASF in the process of testing meat samples taken from dead wild hogs found near Kholokholenskoye village in Tverskaya oblast.Measures have been taken to localize the infection and prevent its further spread. In Saratovskaya oblast, the outbreak was registered in a private pig-farm. All animals in the farms were slaughtered. Disinfection barriers were constructed at the entrance to the farm.
(Source, Furazh Online)

Bashkiria will manufacture more pork

Agroholding Razguliay is starting the project of constructing modern agricultural complexes manufacturing and processing meat in several regions in the republic of Bashkiria. The total capacity of the complexes-to-be-built is 70,000 tonnes of pork per year in live weight. The estimated cost of the project is RUB13 billion (US$417.2 million).
(Source, Piginfo.ru)

Russian pork prices as of 5 December 2011
Imported pork prices at Saint-Petersburg (Russia) market:
Half carcasses (no bones): US$4.66 per kg
Heart: US$3.05 per kg
(Source, Meatinfo.ru)

Brazil

JBS unveils new strategy

JBS has unveiled a new added value strategy to increase its margins in Brazil. So far, it had treated the business purely as a supplier of commodity products. It is going to spend 15 to 20 million real (BRR) on advertising and launch 500 new products including burgers, sausages and frozen ready meals. Some fresh meat will also be branded. The company will only promote two brands from 2013: Friboi and Swift, with the latter slightly more upmarket. JBS faces a tough challenge with Brazil Foods, whose brands Perdigão and Sadia are well established and benefit from BRR600-milion marketing expenditure.
(Source, Brazilian Meat Monitor)

Russian developments

Russia was due to send a veterinary mission to Russia following the costly suspension of 85 Brazilian plants and ministerial visits to Russia have taken place. Brazil was exporting 39 per cent of its beef and 44 per cent of its pork. This has now fallen to, respectively, 27 per cent and six per cent. Regarding poultry, Russia accounted for about three per cent of exports. We believe that the ban may have something to do with the energy dispute as Brazil is becoming rapidly more than self-sufficient on oil and gas and does not need any more Russian gas.
(Source, Brazilian Meat Monitor)

China

Zhongpin’s expansion

The company has immense ambitions as shown by the table of current projects.
(Source, Asian Meat)

Province – Locality Start of production End volume (tons) Investment (US$ million) Product, volumes (tons)
Hebei – Tangshan End 2012 102,000 $49 Fresh pork, 60,000
Frozen, 20,000
Processed, 22,000
Jilin – Nong’an End 2011
Also logistics and R&D
125,000 $61.5 Fresh pork, 70,000
Frozen, 25,000
Processed, 30,000
Jiangsu – Taizhou End 2011 130,000 $63 Fresh pork, 80,000
Frozen, 20,000
Processed, 30,000
Henan – Changge End 2011
Also R&D
50,000 $58.5 Processed, 50,000
Tianjin End of 2011 36,000 N/A Processed, 36,000

Chinese sausages

The growth is concentrating on the chilled and ambient sector as sales of frozen sausages seem to have reached a plateau. Some 44 per cent of sausages are made with pork, 33 per cent with chicken, followed by other meats and fish. A survey shows that consumers are concerned with the quality (59.5 per cent), followed by flavour (56.5 per cent) and hygiene (39.5 per cent).
(Source, Asian Meat)

Korea

Implementation of the Free Trade Agreement

This was discussed at a meeting last week attended by UECBV. The lengthy plant approval process for pork exports from the EU was highlighted as an issue needing to be resolved.

Pork imports up

By the end of October, the country had imported 428,000 tonnes of pork (+78 per cent) with the US providing 136,000 tonnes, Canada 69,000 tonnes and Chile 35,000 tonnes; Spain, Germany and Denmark exported 73,000 tonnes.
(Source, Agra Europe)

The Philippines want to export pig meat to South Korea

After having finalised negotiations on exports of poultry to South Korea the Philippines want to start exporting pig meat to South Korea. The first time round, the Filipino authorities want South Korea to send some inspectors to the Philippines in order to have the Filipino pig meat approved. The Philippines also want to be approved exporter of pig meat to Singapore, Malaysia and the Middle East – with Filipino guest workers as primary target group.
(Source, Markedsnyt for Svinekoed)

Thailand

Major processing project

The Thai-German Meat Product Co. is planning a new processing plant in Bangpakong with a capacity of 15,000 tonnes of sausages, bacon and ham. The project due to be completed in 2014 will cost US$32 million.

December 2011

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