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QMS (Quality Meat Scotland)


20 October 2014

QMS (Quality Meat Scotland) October 2014QMS (Quality Meat Scotland) October 2014


QMS - Quality Meat Scotland

Pigs

Prices and Supplies

The GB DAPP was published for the final time in the week ending September 27. At 155.1p/kg, it was 9% below its year earlier level. Moving into October, the Standard Pig price (SPP), which closely tracked the DAPP since first published in April, increased by 0.4p/kg to 155.6p/kg dwt. This increase came despite a slight strengthening of the pound and increased numbers sold, suggesting a lift in seasonal demand. Weaner prices have followed the finished pig market lower in recent months. According to industry sources, one of the drivers has been increased numbers reaching the market due to capacity constraints caused by higher sow productivity. As October began, the market for 30kg weaners cleared below the £50 a head mark for the first time in nearly 17- months, having fallen by 6.5% on the month and by 10% since the beginning of August. Meanwhile, the market for 7kg weaners has fallen by around 1.5% on the month and by 5% since early August, as prices slipped below £38 a head in the first week of October.

UK abattoirs continued to prove well supplied with pigs in August. Slaughter numbers were nearly 1% higher than a year earlier at 775,800 head. Compared to July, the weekly average throughput fell marginally. After falling for 7 straight months, the average prime pig carcase weight increased at UK abattoirs in August to 80.3kg; a 3-month high. It was also 1.7kg heavier than 12 months before, pushing prime pigmeat production 3% higher on the year. Scottish abattoirs slaughtered 22% more prime pigs during August 2014 than twelve months before. The main reason for such a large increase was the low level of last August. Meanwhile, the weekly average kill picked up by approximately 100 head on the month to 5,800 head. Pigmeat production at UK abattoirs during July exceeded its year earlier volume by 1.5%. Although the volume of sow meat produced fell by 7%, it did not fully offset the 2% expansion of prime production. Overall output totalled 80,400t; 96% of which came from prime pigs.

GB household consumption data from Kantar Worldpanel indicates that pork sales volumes increased in the 12 weeks to August 18. The boost to sales volumes came from GB households spending slightly more money buying cheaper pork. Indeed, spending rose 1% while prices fell by 4% on average, pushing volumes up by 5% year-on-year. Sales of mince and roasting joints grew considerably due to promotional offers in supermarkets, but chops & steaks were less popular than last summer. Three consecutive weeks of sharp declines have seen the EU28 average Grade E pig price slip to its lowest level since the dioxin crisis of January 2011. In the first week of October the average fell to €1.48/kg dwt (115.5p/kg). This was down 10% on the month and 20% on the year.

While prices have fallen in line with the EU average over the past month in France, Poland and Spain, they have fallen by 12-13% in Austria, Holland, Germany and Belgium. Danish prooducers have fared slightly better with prices down by 7.5%. By contrast, UK prices have risen by 1.5% in euro terms due to a stronger sterling, making British pigmeat much less competitive at home and on the continent. With UK prices falling to a much lesser extent, the margin between the UK and EU average has widened to 32%, compared with 17% in early September and 9% this time last year. In recent years, Russian demand for EU pork tended to peak in the third quarter of the year, the loss of this key export market helps to explain the large shortfall in prices relative to last year. UK pigmeat exports exceeded year earlier levels by 10.5% in July, totalling 17,700t.

Pork shipments rose by 9.5% to 16,400t while bacon & ham shipments were up nearly a quarter at 1,300t. This meant that pork accounted for 92.5% of pigmeat exports; slightly below average for the yearto- date. Most of the UK’s main pork export markets bought higher volumes than twelve months before. The highest growth was into China and Denmark – up more than 50%, while Germany and Ireland bought around 5% more and Hong Kong 9%. Holland was the exception as shipments decreased by 27%year-on-year. July saw the highest volume of pigmeat imports so far this year. Imports were up 9% year-on-year at 53,800t. Both pork and bacon & ham were up by 9% at 31,500t and 22,200t, respectively. Imports of cured product accounted for 41.5% of the total for a second month.

 

A large part of the increase in pork imports came from France as shipments more than doubled year-on-year to 4,900t. Meanwhile, there were also increases of a fifth in shipments from Denmark (the largest supplier) and Spain while Belgium delivered 10% more pork. However, there was a more modest increase of 4% in imports from Holland while 15-20% less pork came in from Germany and Ireland. During July, the principle suppliers of cured pigmeat to the UK - Denmark and Holland, delivered 13% and 10% more year-on-year respectively, with shipments rising to 10,500t and 7,500t. There was a much smaller increase of 3.5% in the volume of bacon & ham imported from Germany, pushing volumes up to 2,800t.

News Round up

Feed wheat prices in North East Scotland increased at the end of September and into October.On October 8th, wheat traded at £109/t; up £8 from 2 weeks earlier but still marginally below its early September level. Meanwhile, feed barley prices have been more stable, fluctuating between £95 and £98 per tonne in recent weeks. While strong grain production at the global level has maintained downwards pressure on the market, the current price level has encouraged some additional buyers to enter the market. There have also been some worries over wheat yields in South America and Australia due to wet weather in the former and a dry period in the latter. Compared to this time last year, prices are around 25-30% lower. Continued reports of high soyabean production across the world have placed soyameal prices on a downwards trend of late.

Hi-Pro soyameal traded for £318/t on October 4th, down from £340/t in late August and at its lowest level since mid-to-late July. In the same week last year the price averaged £394/t; prices have therefore fallen by a fifth in the past 12 months. A more confident Scottish pig sector was reflected in the June census data. Indeed, the Scottish sow herd is reported to have expanded by 5% year-on-year in June 2014 to 30,200 head. However, since this followed three years of significant declines, the herd was still 22% short of its June 2010 level. In addition to an increased sow herd, there were more fattening pigs on Scottish farms than 12 months before as numbers increased 3% to 279,500 head. This was mainly down to a 16% increase in pigs weighing over 80kg liveweight; indeed, there were 1% fewer pigs between 20kg and 80kg. Meanwhile, the number of pigs under 20kg on Scottish farms rose by 2% to 88,600 head.

The English June census indicated that the sow herd contracted by 5% to 329,000 head; a loss of 17,000 sows. Meanwhile, gilt retentions reportedly fell even faster, down 7% to 70,000 head. The number of fattening pigs was 2.5% lower than a year earlier, at 3.542m head.The English June census indicated that the sow herd contracted by 5% to 329,000 head; a loss of 17,000 sows. Meanwhile, gilt retentions reportedly fell even faster, down 7% to 70,000 head. The number of fattening pigs was 2.5% lower than a year earlier, at 3.542m head. In Northern Ireland, the provisional June census results reported a 3% expansion in the country’s female breeding herd with numbers reaching 43,900 head. Within these figures the number of gilts being used for breeding was up by 4% at 6,600 head, suggesting that producers have remained in expansion mode. Meanwhile, a 10% rise in fattening pigs to 475,900 head suggests that productivity has picked up markedly and mortality has fallen back. It may also imply that fewer slaughter pigs have been exported live and/or more have been imported.Teagasc performance data for the Irish Republic’s pig sector showed an increase in productivity of around 5% between 2010 and 2013.

The number of pigs born per sow per year rose by 5.4% from 23.9 to 25.2 while the volume of meat produced per sow rose by 5.2% to 1.984t from 1.886t in 2010. The slightly lower increase in meat production was linked to increased mortality due to larger litter sizes. The average farm in the sample added 52 sows over the period, taking the average herd to 706 sows. Spanish slaughter data shows that supplies exceeded year earlier levels in June. There were 2% increases for both throughput and pigmeat production as numbers reached 3.129m head and production totalled 257,200t. Carcase weights were similar at 82kg. During the first half of 2014 (H1), slaughterings rose by 2% to 21.137m head; a 4-year high for H1. However, production volumes rose by less than 1.5%, as carcase weights averaged nearly 1kg lower at just over 83kg. During H1 2014, Denmark exported 551,200t of fresh and frozen pork. This was 2% higher than in H1 2013. Helping to increase sales volumes was a 2% decline in the average price of shipments to €2,250/t (£1,775/t). Sales revenues were up fractionally at just over €1.241bn (£980m). Exports to other EU Member States accounted for the same 72% share of shipments as they had 12 months before.

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