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AHDB Pig Market Weekly


03 January 2014

AHDB Pig Market Weekly - 2 January 2014AHDB Pig Market Weekly - 2 January 2014

Latest figures published for November indicate a small tightening of pig supplies.

AHDB

November slaughterings down, production up

The number of clean pigs slaughtered in the month totalled 826,500 head. This was a 1% decline compared with the same month in 2012. A large part of this change was a result of a 5% fall in the number of pigs slaughtered in Northern Ireland. Throughputs in Great Britain were almost in line with the previous year’s figures. Adult slaughtering, including sows and boars, came down by 10% year on year. The difference in the sow market this year reflects the relative fall in feed prices compared with autumn 2012.

At 80.2kg, there was some stability in the average carcase weight in November compared with the previous month. However, this was 2% higher than the same month in 2012. Therefore, in spite of the decline in clean pig throughputs, pig meat production actually increased by 1% compared with November 2012 to total 69,100 tonnes.

Fewer German pig farms

According to provisional results from the November census, the number of pigs in Germany was 1% lower than a year earlier. The number of breeding pigs was down by 3%, although there were just 2% fewer in-pig sows and gilts. This represents some recovery from the May census, when the breeding herd was down by as much as 6% on the year. Despite this, improved productivity meant that the number of piglets was actually up by 1%, while the total number of fattening pigs was less than 1% below 2012's level. Nevertheless, these figures suggest that supplies may remain tight in the EU's largest pig market through the early part of this year. However, as was the case last year, this could be mitigated by higher imports of Dutch slaughter pigs.

The figures also show another sharp fall in the number of German farms keeping pigs. Overall, there were 7% fewer pig farms in the country but there was an even sharper fall in the number of breeding farms. These were down by 13% to 10,800, around half the number four years before. In particular, the number of farms with less than 100 sows was sharply down, with many having chosen not to convert to loose housing. This was partly offset by some expansion among larger farms.

UK pig prices

Due to yesterday's bank holiday, pig prices for week ended 28 December are not yet available. However, in the previous week the DAPP remained stable, with only a marginal correction to stand at 171.41p/kg. The average price remained more than 10p above its level a year earlier. This stability continued the trend of recent weeks, with the market remaining well balanced as the Christmas marketing period came to an end. At 180,200 head, slaughterings were back from the previous week's peak but remained close to the level seen a year earlier, as was the case for much of 2013. Carcase weights also fell back, as is normal at this time of year, with the average reaching its lowest level since July at 78.75kg.

With the weaner market relatively quiet, the average price for a 30kg animal fell back by over £2 to £55.36 per head. Prices have fluctuated around this level for the last couple of months, so this may not reflect a significant change in the market, given the low volumes traded. The average price for a 7kg weaner increased slightly to £43.33 per head.

Lower Dutch and Danish exports

Total Danish pork exports in the first nine months of last year reached 814,600 tonnes. This was 2% down compared with the same period in 2012. The fall was largely a result of lower trade in the early part of the year. Tight supplies in Denmark, partly due to a further rise in weaner exports, contributed to the latest trade situation. More recently, shipments from Denmark have stabilised and a 2% year-on-year increase in pork exports was recorded in September. The year to date figures showed small declines to all the key destinations, with Germany, the primary buyer, purchasing 1% less compared with the January and September period in 2012. Exports to Poland and Japan came down by 4% and 6% respectively. Pork trade with the UK also declined, by 11% on the year (and as much as 19% in the third quarter). In addition, bacon shipments to the UK declined by a further 18% year on year.

The situation in the Netherlands was similar, whereby exports between January and September came down by 7% on a year earlier. Again increased live pig exports contributed, this time particularly slaughter pig shipments. Italy received 17% of the total volume of pork shipped from the Netherlands and exports to this country declined by 6% on the year. This mainly reflected lower consumer demand in Italy during the first nine months of the year. Other main markets also suffered from lower demand and, therefore, exports to Germany and the UK declined by 16% and 14% respectively. The value of Dutch and Danish exports fell at a slower rate compared with volumes. In the first nine months of the year, the value of pork exports to the Netherlands and Denmark totalled €1.1 billion and €1.9 billion respectively.

UK herd figures revised upwards

In the final figures from the June Agricultural Survey, the UK pig herd figure has been revised upwards. This is largely the result of a change in methodology in Northern Ireland, which has improved the coverage of its figures but means they are not directly comparable with earlier years. The revised UK figures show a smaller fall in the female breeding herd, down 1% to 421,000 head.

Maiden gilt and fattening pig numbers were up more than in previous estimates, by 6% and 9% respectively. However, the increase in fattening pig numbers, which was mostly in England, has not been supported by higher slaughterings in the months since June. Since most of these pigs would have been finished by November, this suggests that the increase was a statistical anomaly rather than a genuine increase in the herd size.

Defra announces details of English CAP implementation

Defra has recently released the result of its consultation on CAP reform, which gives the government’s response regarding the inter-pillar transfer, some aspects of direct payments and rural development. A further response will be issued in early 2014. Highlights of the report include:

  • The amount of funding transferred from farmers’ direct payments to Pillar 2 (rural development) will be 12% and not 15% as initially planned. A review will be held in 2016 into the demand for agri-environment schemes and the competitiveness of English agriculture with the intention of moving to a 15% transfer rate in 2018 and 2019, the final two years of the CAP period.
  • Direct payments rates for the uplands and lowlands are to be equalised.
  • The minimum 5% level of reductions will be applied on basic payments over €150,000. Defra will not apply the option to offset salary costs.
  • Defra will adhere to the standard EU measures on Greening.
  • The list of ineligible activities under the active farmer test will not be extended.

The report of the consultation is available by clicking here.

December Pig Market Trends out now

The December edition of Pig Market Trends (PMT) was published just before Christmas. As well as the usual summary of developments in the UK and EU pig markets and the global feed market over the last month, the latest issue includes more detailed articles on:

  • Trends in competitor meats. Sales of pig meat in the consumer market depend on a range of factors, including the performance of alternative meats such as chicken, beef and lamb. This article looks at the recent performance of other meats and prospects for next year.

  • Seasonality in the pig market. Pig prices vary seasonally, both in the UK and the EU, but the seasonal pattern seems to be changing in recent years. Prices are increasingly firm in the second half of the year, driven by export markets. This article examines these changes.

  • Understanding EU prices. Every week, several representative pig prices are published across Europe but these prices are not directly comparable. This article analyses how prices really vary across the EU when they are converted to a consistent basis.

  • EU consumption trends. Fresh pork consumption has eased back in most of the key continental markets of the EU in 2013. On the other hand, consumption of processed pig meat products has held up better. This article looks at recent developments in the main EU markets.

  • Out of home trends. There was a huge uplift in the number of traditional roast dinners eaten out of the home over the summer, despite the hot weather. In this article, you can read more about this and other trends in the foodservice market.

DOWNLOAD REPORT:- Download this report here

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