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AHDB Pork Weekly Export Bulletin


06 January 2012

BPEX Export Bulletin - Week 1BPEX Export Bulletin - Week 1

A wise word from Henry Kissinger for 2012: "There cannot be a crisis next year, the agenda is already full." Health certificated 7418EHC for the export of pork to Ethiopia has been made available by Carlisle. As for similar certificates, it may be used at exporters’ risk. In South Africa, the veterinary authorities have removed their requirements for trichinella testing in their imports certificates and our export health certificate 7319EHC.
British Pig Executive Weekly Export Bulletin

Denmark

Market

The trade is quiet on all markets and there is a fine balance between supply and demand. Exports of bacon to the UK are satisfactory. Exports to third country markets are stable. Exports to Russia are as usual a little lower around the turn of the year. Exports to China and Japan remain unchanged.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

Pig producers want to pay back debts

The Science Centre for Agriculture just published the recent figures from the Farming barometer. Here a strong progress can be noted as to Danish pig producers expectations for 2012. As many as 30 per cent are expecting the economy to improve compared to 2011. Lately there has been a positive development in settling prices, and it is expected that it will continue during 2012. 42 per cent are expecting a positive growth during 2012 compared to 2011, informs Finn Udesen, head of department of Science Centre for Pig Production. In particular the Danish producers of piglets have the highest expectations for the New Year as the market for piglets in Germany is anticipated to improve. The piglet market naturally depends on the number of sows which could be challenged by the 2013 requirement on loose housing pregnant sows. 27 per cent of the piglet producers asked are planning investments during 2012. They want to secure their production in the future and to meet the welfare demands. The rest probably want to use their increased growth and better economy to pay back their debts. The business results are also expected to improve significantly during 2012 according to the pig producers asked. Whereas in 2011 21 per cent were expecting to improve their business result, it is 59 per cent that are expecting so in 2012.
(Source, Landbrugsavisen)

Danish Crown wants to grow through merger

Danish Crown needs capital in order to develop competitively in the elimination race which is underway in the slaughterhouse sector. Kjeld Johannesen, CEO of Danish Crown sees the merger solution as the most obvious. Farmers cannot afford future growth themselves, and so a merger is a way of getting new capital, he says. During recent years it has been discussed to change Danish Crown into a company limited by shares in order to get capital that way, but now Johannesen evaluates that a merger is better because Danish Crown can get synergy effects and new market shares. Further, there is not a market for listing at present. Kjeld Johannesen stresses that Danish Crown is not desperate to get new capital but on the other hand the company must develop. "More opportunities emerge in the difficult European market just now, and I hope that something will happen in 2012," says Mr Johannesen. A merger would imply that the Danish co-operatively owned company no longer will be fully owned by its suppliers. Maybe 20 per cent will be owned by new owners and the farmers keep 80 per cent of the company. Danish Crown does not want to mention potential merger partners. Henning Otte Hansen, economist and senior adviser at the Institute of Food Economics finds that possibly it is businesses in Holland, Germany or Sweden. He evaluates that Danish Crown have companies in the pipeline that they are considering at present.
(Source, Borsen)

Danish Crown preparing sale of corporate bonds

Danish Crown wants to have cash money in order to be able to invest without having to press its suppliers. This is why the company is planning to sell corporate bonds worth € 135 million. It is not the first time that the slaughterhouse company will get money from selling bonds. It also happened in Denmark in 2004 and in the US in 2005. The latter bonds of € 100 million are expiring and accordingly it is relevant to get cash money once more by selling bonds – probably in the US.
(Source, Borsen)

Erik Bredholt new chairman of Danish Crown

Finally it was confirmed that Niels Mikkelsen?s successor as chairman of the Danish Crown board will be the 45 year old pig producer Erik Bredholt. For the last ten years he has been a member of the board and for the latest five years he was deputy chairman. As new deputy chairman the board appointed pig producer Asger Krogsgaard, 45 years old. Asger Krogsgaard has been a member of the Danish Crown board since 2003.
(Source, Landbrugsavisen)

Increasing exports of Danish piglets to Poland

During 2011 Polish imports of Danish piglets increased from a few thousand pieces to more than 800,000 piglets. Hereby Poland represents almost 10 per cent of Danish piglet exports. The largest Danish exporter and seller of piglets, SPF Danmark, evaluates that exports may increase by 400,000 piglets during 2012. In Poland there was a 15 per cent decrease in the number of sows so there is high demand for piglets from slaughterpig producers explains CEO of SPF Danmark, Peter Skov Madsen. Another piglet seller having big success on the Polish market is Niels Vinderslev at Randers. He tells that increasing exports to Poland have been helpful during times when Denmark's largest export market, Germany, has been more reluctant.
(Source, Landbrugsavisen)

Danish slaughterhouses – payments week commencing 02 January 2012
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.387
-0.027
Euro 1.387
-0.027
Sows (above 129.9kg)
Difference to last week
Euro 1,000
-0.027
Euro 1,000
-0.027
Boars (above 109.9kg)
Difference to last week
Euro 0.867
-0.027
Euro 0.867
-0.027

France

Pork still N°1

With 33.6 kg per inhabitant pig meat still is the favored meat for French consumers ahead of beef with 25.8 kg and poultry 24.7 kg. Fresh pig meat only represents 30 per cent of sales compared with 70 per cent for processed pig meat (charcuterie products). Today fresh processed pig meat represent 25 000 tons. These products (mainly sausages and joints) are often sold as special offers and show limited innovation, therefore sales stagnate. Pig meat is the cheapest red meat on the shelf with €6/kg on average compared with €12/kg for beef or €11.86 for lamb. French retailers are not particularly interested in new products therefore it is up to processors to invest in R&D and communication to increase attractiveness of the fresh pig meat offer in stores. CPMs represent 85 per cent of the offer in French multiples and large processors such as Cooperl, Gad, or Jean Floch. are developing an increasing number of new products: marinated cuts, precooked cuts (ribs), spiced meats and pork based prepared meals.

Deferred delivery

Following our article of 14 October 2011, the first deferred delivery market took place on 7 December in Plérin MPB (Marché du Porc Breton). The new marketing mechanism has now been used for 10 contracts, pigs have been sold to an objective price and will be delivered in January 2012.

Market data for week 52 (2011): Pork

The prices were higher in Plérin (+0.4 cents). According to “Marché du Porc Breton”, this is due to the good activity of abattoirs for promotions in January. Our exports would be good thanks to a parity more favourable euro/dollar. It remains to be seen how the slaughter for cuts will react in this context of very limited margins and pressure from the supermarket chains.

Piglets

The fluidity of the exchanges and the firmness of prices are confirmed, because of a limited offer for a demand that doesn?t change. According to FNP-FNCBV the prices are slowing down by 5 cents for 25kg and -83 cents for post-weaners.

Cuts

Promotions will start very soon. Pork chops are under 2,80 € /kg in most of the stores. This low price pulls the prices of cuts downward, especially for loin and leg.

Pork prices Rungis, week commencing 02 January 2012
Cut name Price range (Euro/kg)
Back fat, rind-on 0.75
Trimmings 1.41
Leg 2.28
Loin including chump 2.67
Loin excluding chump 2.49
Belly extra without trimmings 2.34

Germany

Market

The market for cuts is well supplied and in many cases this causes pressure on prices. Main effected cuts are hams but also chops, loins and filets. Prices for shoulders, bellies and most by-products could mostly not be maintained.
(Source, AMI)

Westfleisch denies intentional manipulation

In mid-December, the news magazine Der Spiegel had accused Westfleisch of manipulation during the process of weighing pigs. After routine inspections by the gauging office had apparently revealed modifications to the system, the AutoFOM systems at the Westfleisch plant in Coesfeld were shut down. Westfleisch denies any intentional offence and declared to be willing to fully cooperate in order to provide transparency and clarify the matter should there be any further investigations. Due to the holidays, the process of readmitting the use of the AutoFOM system has been delayed. However, alternative classification methods allow for business to be operating uninterruptedly. The impaired trust in the system however weighs heavy.
(Source, afz)

Demand for Blackbox to be implemented nationwide

The Tönnies abattoir in Rheda-Wiedenbrück is currently running a trail among 50 farmers testing the use of a Blackbox that sends all slaughter data via a separate and protected data line to the Federal Office for Nature, Environment and Consumer Protection (LANUV), which functions as an independent control authority. Officials and producers agree on the great advantage of the Blackbox and favour the nationwide implementation in abattoirs. According to LANUV president Dr. Heinrich Bottermann, the implementation of the Blackbox would increase transparency and abattoirs not having anything to obscure could demonstrate this publicly. To ensure to not be subject to third party influence, LANUV has apparently applied for the necessary certification at the Federal Office for Information Security.
(Source, topagrar)

Danish Crown aims to triple sales to Aldi in Germany

Danish Crown has succeeded in getting a foothold with Aldi North in Germany. For a very, very long time the company has worked on delivering fresh retail packed meat to Aldi and now got a break through in Germany. Today Danish Crown is the second largest supplier to Aldi North, informs Kjeld Johannesen, CEO of Danish Crown. The Danish Crown factory at Oldenburg will deliver and the products will be Aldi branded. Danish Crown is also making an effort to get a foothold with Aldi South. Prospects are that Danish Crown is going to triple its sales to Aldi in Germany in 2012, says Kjeld Johannesen.
(Source, Borsen)

Raw ham under scrutiny

Product testing organization “Stiftung Warentest” has scrutinized the quality of raw ham in self-service packaging. Organic products as well as some of the discount products scored best. The quality of Blackforest Ham varied much more significantly than observed with Parma or Serrano Ham. While the final grades for Blackforest Ham varied between good and satisfactory, all Serrano Hams apart from one were tested “good” as was the Parma Ham, which was also checked with regards to the origin of the pig meat. No undesirable germs or residues of antibiotics were detected.
(Source, fleischwirtschaft)

Pork prices, Hamburg, market week commencing 02 January 2012
Cut Name Price range (€/kg)
Round cut leg 2.15/2.30
Leg (boneless, rindless max fat level 3mm) 3.00/3.10
Boneless Shoulder 2.40/2.60
Picnic Shoulder 2.00/2.15
Collar 2.25/2.45
Belly (bone in, ex-breast) 2.35/2.50
Sheet Boned Belly (rindless) 2.30/2.50
Jowl 1.50/1.70
Half Pig Carcasses U class. 1.97/2.07

Netherlands

Happy 2012?

Van Drie, the major veal processor expects its sales to fall in 2012 by about 10 per cent and retail pack size to shrink once again. The Netherlands already has the smallest meat packs in Europe. Marc van der Lee from Vion also thinks it will be harder to sell "concept" products and organic meat. However, the country is better placed to weather the crisis than most other EU states.
(Source, Agrarisch Dagblad, Van Drie)

Enthusiasm to end castration

In contrast to the Italians, Dutch researchers, PVE and farmers? organisation LTO are enthusiastic to end castration at the recent castration conference in Amsterdam. It would mean less labour and a potential saving of € 7 per male pig. Some 40 per cent of pigs in Holland are now left entire. The Spanish are much more circumspect and the Italians (see below) are hostile. (click here)

Spain

New secadero for Los Pedroches

The company, a leader for Iberian products, has opened a new drying plant with a capacity of 400,000 hams, a tough call in the difficult economic conditions with sales of Iberian ham down about 12 per cent and 'white' dry-cured ham 3.5 per cent over the last two years.

More woes for the Iberian pork sector

The association of small producers UPA-UCE of Extremadura qualifies 2011 as “catastrophic” due to high costs of production and low prices. Some 19 per cent of the mostly smaller producers have closed and the sector has lost 20,000 sows.

Pork prices Barcelona Market Week commencing 02 January 2012
Cut Name Price Range (€ /kg)
Carcases (secondary grade) 1,483/1,489
Gerona Loin Chops 2,36/2,39
Loin Eye Muscle 3,41/3,44
Spare Ribs 2,83/2,86
Fillets 5,83/5,86
Round Cut Legs 2,58/2,61
Cooked Ham 1,97/2,00
Rindless Picnic Shoulder 1,60/1,63
Belly 1,96/1,99
Smoked Belly with Spare Rib Section Cut off 2,39/2,42
Shoulder chap or Head Jowls 1,33/1,36
Back Fat, Rindless 1,36/1,39

Italy

At least clarity on castration

According to well-known pig specialist Marcello Marchiesi of the Martini group speaking at the Amsterdam conference, Italy will apply for derogation to the 2018 rule to end castration as there are no technical solutions yet available to replace castration in the production of heavy pigs for the production of dry-cured products. Spain and some French producers could join this demand.

Russia

Several consignments detained at Russian border

According to information provided by Rosselkhoznadzor, on 30 December 2011 the experts of the service examined a lot of frozen pork fat from Finland (18.56 tonnes) and detected violations in shipping documents. Packaging also did not meet the requirements. During examination of three lots of frozen pig carcasses delivered from Holland (more than 25 tonnes) Rosselkhoznadzor experts discovered that the details of the refrigerator indicated in the veterinary certificate for the lot did not correspond to the details indicated in the Register of Enterprises posted on the Rosselkhoznadzor website. Rosselkhoznadzor expects the veterinary service of Holland to provide explanations. In the meantime the lots are held at customs. In both cases Rosselkhoznadzor consider holding the owners of the lots administratively responsible for these violations. Earlier, on 27 December, Rosselkhoznadzor experts detained a consignment of frozen pork and pork fat (19.9 tonnes) delivered from Germany because part of the identification tags on the consignment contained the name of an enterprise that was not indicated in the veterinary certificate. The part of consignment in which the violations were detected was returned to the manufacturer.
(Source, meatinfo.ru)

ASF outbreak in Smolensk Oblast

On 23 December 2011, forest rangers in Smolensk Oblast found corpses of 5 wild boars. Lab tests proved that the animals died of ASF. The corpses of the animals were burned and materials were sent to Rosselkhoznadzor for confirmation of the results.
(Source, e-meat.ru)

New pig breeding complex launched in Altayskiy Kray, Russia

A new pig breeding complex was launched in Rebrihinskiy region, Altayskiy Kray by the company Altair-Agro. Current capacity of the complex is 14,000 pigs per year but according to administration of the region, the capacity will reach 48,000 pigs or 2,800 tonnes of pork in live weight per year as a result of implementation of the biggest investment project in the region. Total amount of the investment project is 600 million rubles (USD 18,700,000).
(Source, furazh.ru)

Paraguay

FMD outbreak

Paraguay confirmed a new outbreak of FMD in a northern province, just four days after lifting the state of emergency imposed in the region in September when the outbreak of FMD in the country led to the slaughter of some 1,000 animals. Now, authorities ordered the slaughter of about 150 cattle in the San Pedro department, some 250 miles north of the capital Asuncion.
(Source, Business World Online)

Switzerland

Boar taint selection

Suisag have started genetic selection for low boar taint. In Switzerland, general anaesthesia by isoflurane is compulsory since 2010.

Brazil

A fast changing country

The rapidly growing middle classes are definitely eating more meat. The number of people in the AB class has grown from 26.4 million in 2005 to 42.3 million in 2011, from 62.7 million people to 101.6 million for C class whilst numbers for the DE class have dropped from 92.9 million to 47.9 million. Poultry consumption has grown between 2000 and 2011 from 28 to 47 kg, beef from 35 to 39 kg and pork from 10 to 14 kg.
(Source, various)

Japan

Consumption concerns

Consumption was down 3.2 per cent year on year at the end of November. Also, the huge public debt will find difficulty in refinancing within three to five year with the Japanese public. This should lead to major increases in taxes with VAT climbing from 5 to 20 per cent, further dampening consumer demand. Although food sales are rather inelastic, some trading down looks unavoidable.
(Source, various)

The Maldives

Shariah law

The government revealed its plan to completely ban alcohol and pork in the Maldives following the demands made by religious protestors. There is some will to impose stringent Shariah law on the Islands. This does not fit well with the demands of the tourism industry, the major source of revenue for the country.

January 2012

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