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AHDB Pork Weekly Export Bulletin


06 May 2013

BPEX Export Bulletin - Week 18BPEX Export Bulletin - Week 18

The British pork sector is heading en masse to China next week with three groups catching planes. The main event will be Hofex, the largest food show in Asia, where 17 meat companies including major exporters, pork further processors and some premium pork suppliers will be hosted in the large British Meat pavilion. A record 48 British food exporters will be there, the event is supported by a comprehensive marketing and PR programme. A blog of the event will be broadcasted on a daily basis.
British Pig Executive Weekly Export Bulletin

A second group of six companies will attend SIAL in Shanghai on the joint BPEX-EBLEX pavilion. The show is now the largest in China and an important meeting point for traders of porcine fifth quarter products.

The third group comprising BPEX and Defra staff will head to Beijing for discussions with the Chinese authorities regarding certification issues with a particular regard to market access for pig trotters. A meeting in Kenilworth this week, well supported by technical and sales staff of major processors, veterinarians and traders discussed the various issues in relation to pork exports to China, in preparation for the visit.

In view of the increased level of marketing activity in China, BPEX has published a new Chinese-English buying guide for pig offal and variety meats.

France

Aurélien butcher shops

Fresh air is blowing on the French butchery sector. Cooperl is launching new-look butchers shops following the purchase of Defi Viandes holdings, a network of butchers shops in north east of France. The shops will be decorated in modern vibrant colours and offer a broader range of services: different packaging, cooking tips and tight traceability from local suppliers. Sales are split in to three categories: fresh meat (50%), deli catering (30%) and snacking-roasting (20%). A large range of oven-ready meals will also be on display. Cooperl Arc Atlantique will use the first shop, in Redon, as a test concept which it hopes to develop in cities with over 15,000 residents. Recruitment of additional employees will take time and investment, resulting in the concept coming to fruition in 2014.

GAD

Administrators appointed to pig processor GAD are investigating all options to save the company, with an annual turnover of €453m. Potential leads, both in France and abroad, are being pursued with a deadline for offers on 17 May. To date, the closure of one of their two abattoirs has not been excluded. The group employs 1,500 people at the Josselin and Lampaul sites, 80 employees in St Nazaire and a further 50 head office staff in St Martin des Champs, Brittany.

Markets

Pigs: Significant supplies at Plérin last Thursday were sufficient to meet current demand. However, the export market is still not very strong and therefore the base price eased by €0.035, no significant improvement is predicted over the coming days.

Piglets: In Brittany, offers are sufficient for demand. However, this is not the case in all the regions of France. Prices are dependent on the local market.

Cuts: The market was better at the end of last week due to the improved weather in some regions of France. School holidays have started which has resulted in the market improving in holiday destinations. However, wholesalers haven't seen any improvement in sales and the export market remains stable.

Pork prices RUNGIS week commencing 29 April 2013

Cut namePrice range (Euro/Kg)
Back fat, rind-on 0.60
Trimmings 1.36
Leg 2.47
Loin including chump 3.04
Loin excluding chump 2.65
Belly extra without trimmings 2.96

Denmark

Strong year for DCH International

Strong year for DCH International

The Danish farming company DCH International has had yet another year of strong growth in Romanian pig production. The company now has 8,000 sows in Romania, as well as 1,800 in Canada. The company is now among the largest pig producers in Romania as well as being one of the largest Danish farming companies operating abroad. Higher production and strong pig prices have resulted in their turnover increasing by a third during 2012 to nearly €40m. In a recent press release, the company reports turnover was €1m ahead of budget. Profit is reported to have virtually doubled since 2011.
(Source, Landbrugsavisen)

Markets

European markets remained unchanged. Currently, export demand for legs and loins is good. Bi-products, shoulders and fore-end cuts are moving but the market is described as weak. The UK bacon market remains stable as do third country export markets.

Danish Slaughterhouses - payments week commencing 29 April 2013
SlaughterhouseDanish CrownTican
Slaughter pigs (70.0 – 86.9 kg)
Difference to last week
Euro 1.466
unchanged
Euro 1.466
unchanged
Sows (Above 129.9 kg)
Difference to last week
Euro 1.026
unchanged
Euro 1.026
unchanged
Boars (Above 109.9 kg)
Difference to last week
Euro 0.850
-0.044
Euro 0.850
-0.044

Netherlands

More boars

In 2006 boars represented only 2% of Dutch production. This has now risen to about 50% says Gé Backus, the EU coordinator on castration. In France, Germany and Denmark, the percentage is still only 5%, in Belgium 10% and in Sweden 20%, he declares. The push by Dutch retailers explains this difference.
(Source, Boerderij Vandaag)

Marks & Spencer lands in Holland

The British retailer is opening two stores in The Hague and Amsterdam as well as six Simply Food outlets in petrol station forecourts. Marks & Spencer’s international network is expanding rapidly thanks to new franchise agreements.
(Source, Boerderij Vandaag)

Loss of influence of the Dutch farming lobby

Dutch farmers have lost influence in decision making in Brussels, according to analyst Rinus van Schendelen from Erasmus University. Lack of support from Dutch MEPs on farming issues over ‘green’ issues and the small number of Dutch MEPs in the Farming Commission in the European Parliament are blamed.
(Source, Boerderij Vandaag)

Dutch welcome lower feed prices

The cost of feed to pig farmers is now the lowest for four years and is providing a boost to Dutch pig farming.
(Source, Boerderij Vandaag)

Belgium

Attack on German low wages

Belgium has now joined the French in attacking the German system of imported low cost labour. Minister Vande Lanotte complained of unfair competition to the European Commission.
(Source, Boerderij Vandaag)

Germany

Pork Prices Hamburg Market Week commencing 29 April 2013
Cut namePrice range (€ / kg)
Round cut leg 2.25/2.45
Leg (boneless, rindless max fat level 3mm) 3.10/3.25
Boneless Shoulder 2.45/2.65
Picnic Shoulder 1.95/2.15
Collar 2.65/2.75
Belly (bone in, ex-breast) 2.40/2.55
Sheet Boned Belly (rindless) 2.25/2.50
Jowl 1.60/1.75
Half Pig Carcasses U class 1.98/2.06

Spain

Pork prices Barcelona Market Week commencing 29 April 2013
Cut namePrice range (€ / kg)
Gerona Loin Chops 2.48/2.51
Loin Eye Muscle 3.38/3.41
Spare Ribs 2.98/3.01
Fillets 5.33/5.36
Round Cut Legs 2.73/2.76
Cooked Ham 2.50/2.53
Rindless Picnic Shoulder 1.75/1.78
Belly 2.46/2.49
Smoked Belly with Spare Rib Section Cut off 2.89/2.92
Shoulder chap or Head Jowls 1.13/1.16
Back Fat, Rindless 0.78/0.81

Sweden

Falling production

In 2012, Swedish pig slaughterings fell by 10% or 300,000 head to 2.6m head. The owner and editor of GrisPortalen, Lars-Gunnar Lannhard reports young farmers taking on farms are not interested in pig production as one driver behind the decrease. At the same time, high grain prices have put pressure on existing producers margins. PigPortal’s statistics show the downward trend has continued during the first quarter of 2013 with slaughterings falling to 633,013 head, throughputs in the corresponding period a year ago totaled 683,822 head.
(Source, Landbrugsavisen)

Belarus

New slaughter laws

Commencing on 1 May 2013, the slaughter of animals in Belarus can only be carried out in specially equipped slaughter facilities. However, capacity at the facilities currently available is not enough to meet demand. This may lead to a shortage of meat, including pork, on the domestic market. Farmers hope the government will delay the implementation of the new law until more facilities are opened in the country. Producers will also be required to pay for the service which may lead to higher prices for meat.
(Pigua.info)

USA

Smithfield to be split?

Continental Grain, a major shareholder of Smithfield is pushing for the company to be split in to three businesses to remedy current underperformance. It mentions negative profitability of pig production over the last five years, volatility and the undervaluation by Wall Street of pig production against pork processing. Smithfield judged the report “inherently flawed”.
(Source, various)

Pork exports down

USA pork exports are tumbling says USDA. They are down about 34% to 8,800 tonnes per week from more than 12,000 prior to Christmas. In particular, sales to Mexico, the USA’s largest market have fallen sharply.
(Source, USDA)

Canada

Maple Leaf in the red

The major Canadian pork processor posted a surprising loss of £9.4m on a quarterly turnover of £490m, down 4%. Michael McCain, the CEO, blames high cereal prices, the fall of the Yen and the closure of the Russian market due to ractopamine.
(Source, Reuters)

Loblaw goes for loose house sows

The major Canadian retailer has announced it will move towards the supply of pork from farms operating loose house systems.
(Source, Reuters)

Russia

Putin promises support until 2016

A director of a Belgorod meat processing company complained to Russian president Vladimir Putin that the animal breeding sector has been losing money since Russia joined the WTO. Putin said that the state will provide financial support to agricultural enterprises to at least 2016. In 2013 the money allocated from the federal budget will be RUR180b (over US$5.7b) and that financial support will be provided by the local administrations.
(Source, Furazh.ru)

Siberian Agrarian Group invest

The Siberian Agrarian Group is going to build a large pig-breeding complex in Tiumenskaya oblast. The construction will start in May 2014, estimated capacity of the complex will be production of 24,000 tonnes of liveweight pork. Total investment of RUR5b (US$159.5m) has been committed by SAG to the new complex.
(Source, Pigua.info)

China

Zhengbang’s major project

The Jiangxi agriculture conglomerate has started a project on a huge farming complex in Hunan. This will include an automated pig farm with a modern filtration unit, an AI station, breeding farms and 10,000 acres of crops. The farms aim to hold half a million pigs.
(Source, Asian Pork)

Henan Shuanghui boosts throughput

The major processor increased its pig throughput by 50% in 2012. It has earmarked £540m for investment in 2013. This will include a new plant to produce packaging, a new processing plant in Anhui and a 500,000 head finishing pig farm. The company aims to increase its turnover by 30% to £5.7b this year with a 52% increase in pig slaughterings. The company has also lofty overseas investment ambitions and has set up an international division. The company is convinced that meat consumption will continue to grow from its current 44kg per capita.
(Source, Asian Pork)

Please note: Chinese prices have not been published for week commencing 29 April 2013 due to the May Day holiday in China.

Australia

THE AUSTRALIAN PROCESSED MEAT MARKET

According to Mintel data, the whole processed meat market is growing constantly with a value estimated at £750m in 2007 to a forecast £1,957m in 2016. For instance, sales grew by 11.9% in 2011 in value terms. Volumes are growing by about 2% per year. Australian intake is still less than half the European consumption per capita. This increase is backed by the strong rise of the GDP and the population, which is predicted to reach 24m by 2016. GDP rose from £327b in 2012 to £970b in 2012 and is forecast to rise to A$1,295 by 2017.

More than 90% of processed meat products are sold chilled with canned and frozen products representing less than 10%.

The main players are Primo Small Goods with a market share of 24.4%, followed by Hans Continental Smallgoods with 17%, George Weston with 14.8%, Bertochi Smallgoods with 4.8% and Dorsogna with 4%. Other significant players include Heinz, Hormel, Inghams and Patties.

BPEX has commissioned a report on the promising Australian market as an outlet for British pork, in the knowledge that frozen pork is used for further processing. BPEX will also attend Australia Fine Foods in Sidney from 9 to 12 September. For further detail, contact BPEX Export Department.

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