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AHDB Pork Weekly Export Bulletin


19 January 2012

BPEX Export Bulletin – Week 3BPEX Export Bulletin – Week 3

Rabobank is resolutely optimistic for the pork sector for 2012 regarding prices. According to its forecasts, the fall of EU sow numbers should lead to a fall of production of 3.6% and tightening supplies. Consumption should be down by 1%.
British Pig Executive Weekly Export Bulletin

Data from the European Commission shows that Third Country exports are up 21% to 2.66 m. tonnes. For the first time, China & Hong Kong became the largest market with 29% of exports, ahead of Russia with 27%. Other important markets include Japan (7%) and Korea (6%). European Commission, Rabobank and Gira are predicting a fall of exports this year. They have done so over the last five years but the dynamism of EU exporters has confounded these pessimistic predictions.

Denmark

Market

An unusually low demand is characterizing the European market. It means that the demand is low for legs and loins and the result is declining prices. Sales of shoulders and trimmings for the industry remain unchanged. The bacon contracts on the British market will be renewed at unchanged to slightly declining prices. Exports to Russia are fairly quiet after the turn of the year. The markets in China and Japan remain unchanged compared to last week. >
(Sources, Danish Crown, Tican, Danish Agriculture and Food Councal)

Ongoing optimism in spite of decreasing pig quote

The decrease of the pig price of 14,7 Eurocent per kg over the latest month has not made AgroMarket analysts change their evaluation that 2012 will be a year with high pig prices. The declining prices during January were expected. A decline must be expected when the Christmas trade is fading out. It is expected that it will pass fairly quickly. One must go as far back as 2001 to find a January quote as high as the present and so the forecast is also optimistic for the quote for the remaining part of the year says chief economist Klaus Ravn of AgroMarkets. Even if the Danish slaughterhouses lowered the pig quote five times since the peak of 1,467 Euros per kg in December to now 1,320 Euros, Agromarkets expects that still there are some positive tendencies in the fact that at present the slaughterhouses have no backlog of pigs waiting to get slaughtered. So AgroMarkets stick to its previous announcement that a peak in pig prices at approximately 1,667 Euros per kg can be expected this summer.
(Source, Landbrugsavisen)

Rabobank forecast

As briefly mentioned above, the Dutch Rabobank has prepared a report on the European meat market in 2012. According to the report European pig producers can expect positive earnings in 2012 after five years of negative business results. The EU production of pig meat is expected to decrease by 3.6 % in 2012. The strongest fall is expected in Southern and Central Europe while the Northwestern part of Europe is expected to strengthen its market position both in 2012 and over the next years. Further, Rabobank is expecting slightly falling feed prices but warns against high uncertainty with respect to feed prices as supply of grain may quickly come under pressure should the harvest turn out to be bad. Regarding consumer demand it is expected that there will be increasing demand for cheap products as a result of the difficult economic situation. While exports are expected to be affected by a reestablished production of pig meat in South Korea and China and an increased production in Russia problems with diseases in both Russia and China may well affect the production negatively resulting in a only moderate decline of EU exports.
(Source, Markedsnyt for Svinekoed)

Danish Slaughterhouses - payments week commencing 16 January 2012
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0 – 86.9 kg)
Difference to last week
Euro 1.320
-0.027
Euro 1.320
-0.027
Sows (Above 129.9 kg)
Difference to last week
Euro 0.946
-0.054
Euro 0.946
-0.054
Boars (Above 109.9 kg)
Difference to last week
Euro 0.813
-0.054
Euro 0.813
-0.054

France

2012

The implementation of the animal welfare standards from 1st January 2013 will have a negative impact on French production which, consequently, is likely to decrease this year. The French industry will probably focus on 3 items this year:

  1. Strengthening labelling for French pig meat,
  2. Launching a national communication campaign
  3. Boosting innovation

Consumption is not expected to increase and exports are threatened by the Brazilian activity on Chinese market.

The challenge for French processors

French processors of pig meat suffered in 2011 and should the average pig price reach €1.4/kg as hoped by MPB (Marché du Porc Breton) and retail prices decrease down to €2.29/Kg as seen on French shelves recently, their financial situation is not likely to improve. The retail price of shoulders at €1.69Kg does not leave any margin to processors when slaughtering and cutting costs are included. The French pig meat industry suffers from competition within and outside Europe, its position has been weakening for years and the arrival of non-castrated pigs on the market is seen as an additional threat on the industry.

Pork

Our base price lost 1.2 cent yesterday in Plérin. Offers were low. According to "Marché du porc Breton", this tendency is due to a very moderate demand, because of the seasonal lull in our consumption. Added to this is that we don’t know the orientation of the European market in the short term.

Piglets

The French market remains very fluid and firm. Prices are stable. No evolution is expected in the short term due to a limited offer. On the other hand, the fatteners are very prudent. According to FNP-FNCBV the prices are slowing down by 5 cents for 25 kg and -84 cents for post-weaners.

Cuts

It’s the third week of the month, the end of the promotions.... Export is slowing down. The breast is the only cut which sells well, thanks to the Chinese New Year. If the parity Euro/Dollar works in our favour, it is hoped that orders will be sufficient to help our French market.

Pork prices RUNGIS week commencing 09 January 2012
Cut name Price range (Euro/Kg)
Back fat, rind-on 0,75
Trimmings 1,34
Leg 2,36
Loin including chump 2,67
Loin excluding chump 2,42
Belly extra without trimmings 2,36

Germany

Market

The market for pig meat is very quiet. Prices for half pig carcasses remained stable but cuts were sold at slightly lower prices than last week. Hams however are marketed with no difficulties due to "Schnitzel" promotions taking place. Sow meat of German origin lost about 8 cents/kg, Danish products were sold 5 cents/kg below last week's prices.
(Source, AMI)

Vion

The public prosecutor's office in Düsseldorf is examining allegations of fraud against Vion. The company is accused of having re-labeled from various European countries of origin as meat of German origin in order for higher sales prices to be achieved. Centre of the investigations is a cutting plant in Hilden where allegedly large quantities of non-German meat have been re-labeled. Vion strongly rejects these allegations and the management has expressed surprise but stated to be willing to nevertheless "fully support the investigations". Vion refers to frequent internal and external, independent revisions never having resulted in any complaints. According to Vion, 80% of the Hilden site's large customers are supplied with EU-meat of both German and various other EU origins which is labelled according to origin. Importantly, products are sold at a single price, regardless of origin. The re-labeling of products would therefore not even lead to higher sales prices being achieved.
(Source, Lebensmittel Praxis)

Westfleisch

Westfleisch does expect the work with the AutoFom system to resume at the end of January. Following allegations of manipulation at the weighing of pigs, the system at the Coesfeld site had to be shut down temporarily. According to Westfleisch, all checks undertaken by the Max-Reuter-Institute Kulmbach are now finished and the report confirming the permitted resumption is awaited shortly.
(Source, fleischwirtschaft)

More pigs

According to data published by the Federal Statistics Office, the number of pigs kept in Germany totaled approximately 27, 42 million at the beginning of November 2011.This is an increase by 2.5 % or 666.100 animals compared with the results from a counting in May 2011.Compared with 2010 figures, numbers increased by 1.9% or 517.400 animals. The number of pig farms however decreased by 6 % to 30.900 within 12 months.
(Source, allgemeine fleischer zeitung)

Pork Prices Hamburg Market Week commencing 16 January 2012
Cut name Price range (€ /Kg)
Round cut leg 2.00/2.20
Leg (boneless, rindless max fat level 3mm) 2.80/3.00
Boneless Shoulder 2.20/2.40
Picnic Shoulder 1.90/2.05
Collar 2.10/2.35
Belly (bone in, ex-breast) 2.20/2.35
Sheet Boned Belly (rindless) 1.90/2.20
Jowl 1.35/1.45
Half Pig Carcasses U class 1.88/1.98

Netherlands

Farmers want to invest

Despite the current financial difficulties, some 42% of pig farmers plans to invest this year, 58% do not. Some 49% of pig farmers expect an improvement of margins in 2012.
(Source, Boerderij Vandaag)

Vion takes over Eastman Gel

The gelatine manufacturer supplies Eastman Kodak. The concern was founded in 1817 in the USA under the name. Vion-Rousselot is the world leader in gelatine production.
(Source, Boerderij Vandaag)

Competition for Sonac

The Dutch rendering sector now counts a new player with Noblesse Proteins based in Wijster (Drent). Sonac has a near monopoly of Dutch rendering.
(Source, Boerderij Vandaag)

New title for farming paper

The main Dutch farming paper Agrarisch Dagblad has been renamed Boerderij Vandaag. (Farming Today)

Spain

Export-led recovery

Booming meat exports are leading the Spanish recovery. ICEX, the Government export body reckons that between January and September, these were worth € 2.7 billion (+18.3%), with pork products representing 60% of volumes and 54% of value.

Grupo Jorge takes over Mafresa

Some 51% of the shares of the indebted major Iberian pork producer have been bought by the Aragonese group via its subsidiary Campodulce Curados. Grupo Jorge operates two major pig abattoirs in Aragon and a string of subsidiary companies with a turnover of € 298 million (2009).

Pork prices Barcelona Market Week commencing 16 January 2012
Cut name Price range (€ /Kg)
Carcases (secondary grade) 1,450/1,456
Gerona Loin Chops 2,21/2,24
Loin Eye Muscle 3,11/3,14
Spare Ribs 2,73/2,76
Fillets 5,38/5,41
Round Cut Legs 2,31/2,34
Cooked Ham 1,87/1,90
Rindless Picnic Shoulder 1,57/1,60
Belly 1,96/1,99
Smoked Belly with Spare Rib Section Cut off 2,39/2,42
Shoulder chap or Head Jowls 1,13/1,16
Back Fat, Rindless 1,16/1,19

Ukraine

Three new pig-breeding complexes for Odesa Oblast

In 2012 there will be three new pig-breeding complexes built in Odesa Oblast with a total capacity of 63,000 pigs. These sites will be built within the framework of the "Animal breeding in Odesa Oblast" project, implemented by the local authorities. One of the complexes will be built in the Ivankivsky region (24,000 pigs), another one in the Tarutynsky region (27,000 pigs), and the third one in the Ananiivsky region (12,000 pigs). Furthermore, the project includes the reconstruction of the "Artsyzka Myasna Compania" pig-breeding complex with a capacity of 24,000 pigs.
(Source, Pigua.info)

Meat-processing company promises to boost pig-breeding in the Crimea

According to the General Director of meat-processing complex "Skvortsovo" Vitaliy Polischuk, his company may increase the number of pigs in the Crimea up to 83,000 animals by 2013 if the local authorities create favourable conditions for it. Mr. Polischuk shared his observations that the number of pigs in farms and households in the Crimea have been decreasing recently (71,716 animals in 2008; 61,720 animals in 2011), while the number of pigs in premises belonging to "Skvortsovo" has been constantly rising. The company is planning to breed 48,000 pigs in 2012 and 83,000 pigs in 2013. Prerequisites for the implementation of these plans however are the allocation of land for growing of feeding stuff and the construction of new breeding premises by the Council of Ministers of the Crimea.
(Source, http://e-crimea.info)

Market

As of Jan 13, 2012, the average purchasing price for pigs of the first and the second categories was USD 2,152/t. Compared to the price at same date last year this is an increase by 22%. Wholesale pork prices were USD 3.78/kg and average the retail price was USD 5.42/kg.
(Source, Pigua.info)

Kazakhstan

Pig numbers down

As of January 1st 2012 the Statistics Agency of Kazakhstan counted 1,223,300 pigs in different kinds of pig-breeding complexes, farms and house-holds in Kazakhstan. When compared to the figure of 1,356,100 pigs on January 1st 2011, the number of pigs decreased by 9.8% or 132,800 pigs. The pig population mainly decreased in the northern oblasts of the republic. (
(Source, Kazakh-Zerno)

USA

Smithfield Foods welfare move

The company has pledged to phase out sow stalls by 2017. At the moment, less than one third of its sows are loose housed.

Brazil

Brazilian pork for the USA

USDA has agreed to certify that abattoirs in the state of Santa Catarina, comply with American sanitary standards after the agency recognized Brazilian inspectors as capable of approving pork for export. However, the US has called for more federal meat inspectors in the Brazilian pork industry. The USDA decision means that raw pork, along with cooked and canned pork, can all be exported as long as they go through federal inspection. As the US exports as well as imports pork, it is not expected to be a big market for Brazilian exporters. However, the US seal of approval will make it easier for Brazil to export pork to the really big importers like Japan and Korea. "The opening of the US market is good news," says Brazil's Minister of Agriculture, Mendes Ribeiro Filho. "Now the next step will be Japan and Korea. The Russian embargo made things difficult for us. With a US stamp of approval we move on to a new stage." Santa Catarina is the only Brazilian state that is officially free of foot and mouth disease. A list of approved slaughterhouses and meatpackers in the state will be published shortly.

South Africa

An outbreak of Classical Swine Fever has been detected in Mpumalanga on 6 January and reported last Friday.

January 2012

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