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AHDB Pork Weekly Export Bulletin


08 January 2016

AHDB Pork Weekly Export Bulletin - 8 January 2015AHDB Pork Weekly Export Bulletin - 8 January 2015


British Pig Executive Weekly Export Bulletin

In October, the EU exported a record volume of pork, with shipments to China double what they were in 2015. Exports to Japan also increased by 40%. These two countries represented more than half of total exports.

Defra has unveiled its food ambitions following the creation of the Food Unit on 1 January. These include mainly UK-based food promotion activities with little mention of exports. A conference is planned for next April in London.

AHDB Pork will be represented at a conference on antimicrobials/antibiotics in Washington on 21 January. US producers are bracing themselves for new regulations in 2017.

France

Limited progress
Following the meeting organised by the Minister of Agriculture, INAPORC and the Ministry have agreed on 1) prioritising contractualisation, 2) promoting the “Meat from France” logo, 3) publishing prices on cuts in the industry. FNP and INAPORC also presented a new private funding mechanism associating producers and retailers to compensate market fluctuations. Nevertheless, representatives of Culture Viande still believe the above measures are not the response to the present crisis which combines: competitiveness deficit, decrease of consumption, absence of mention of origin of meat included in prepared meals, taxes, charges and red tape.

Let’s save French livestock farming!
On the day (4 January) of the opening of a private storage facility for EU pig meat and fat, a handful of pig producers launched a new association called “Let’s save French livestock farming”. In St Caradec (Brittany) and in front of 200 farmers, these pig producers announced some actions in the coming days including one at MPB (Marché du Porc Breton) in Plérin on January 14th. The objective is firstly to exert pressure on French multiples and push them to make sure that French pig meat is massively present on the shelves of fresh and processed pork, and secondly to convince French politicians to support the legal mention of country of origin of meat included in prepared meals.

White ham
“My white ham” from Madrange is prepared with “only what is needed: pork, stock and a touch of salt, nothing else!” The “only essentials” baseline stresses that the product is prepared with natural ingredients only, without any antioxidant and without artificial preservative. The launch of this product will be supported by a strong TV campaign.

“Nouvelle Agriculture”
At the conference “Le porc dans tous ses états”, Hubert Garaud (President of Terrena) presented the situation of the “Nouvelle Agriculture” concept. It was developed a year ago with producers of the West of France in partnership with the retailer Système U. The objective is to get closer to consumers with local products and promote an ecological intensive system to “produce more and better with less”. The Bleu Blanc Coeur association (Omega 3 – linseed) is also linked to the project. As of today, there are 24 different pig meat products in the Nouvelle Agriculture range permanently available in Super U stores and two summer products. So far, 1,800 tons of pig meat have been produced by 42 producers, the objective is to reach 3,500 pigs per week.

Market data for week 1
Pork :
The base price on Monday is stable in this beginning of year. Due to offers for pork butchers higher than the demand, the market is still not very good. Nevertheless the activity is very good in this period of the year due to promotions in store that should allow to reduce a part of the unsold pork meat.
Piglets :
Last week, in Brittany, prices increased by 2 cents/kg and for post weaning, it was +1,06 €. FNP-Coop de France indices are still decreasing, for 25 kg piglets price lost 2 cents and -24 cents for 8kg.
Cuts :
Sales are higher than last week due the end of the festive period.

 

Denmark

No large feed concern
Leading Danish feed producer DLG has announced the end of its project of fusion with Swedish group Kalmar Landmän, the Swedish leader. (Source, Landsbrugavisen)

Netherlands

Liquidity issues for weaner producers
According, to economic institute LEI Wageningen, 80% of weaner producers have liquidity issues. They have lost in average €75,000 per unit despite lower costs of production and higher productivity. However, according to Wilbert Hilkens from bank ABN Amro, their financial situation should improve slightly in 2016. (Source, Boerderij Vandaag)

Payment pilot scheme
As a trial, Vion pays its partner pig ‘Star’ suppliers on a four-weekly basis since 1 January from the average during the four weeks. (Source, Boerderij Vandaag)

Germany

Farmers want more
Producers from Westphalia are demanding €6c/kg instead of 4 to supply Edeka with pigs under the Tierwohl standard.

Belgium

Carrefour and Colruyt to help pig farmers
The two major retailers will add €10c/kg to the current low pig prices to help producers. Delhaize is currently giving an extra €18c. With additional help from the feed sector and exceptional subsidies, this means that €30m has been pledged. (Source, Boerderij Vandaag)

Sweden

COOL pork in restaurants?
The Swedish Agriculture Minister supports Country of Origin Labelling for all meats in food service. (Source, EU Law)

Ireland

Political tussle
The grumblings within the pig section of the Irish Farmers’ Association (IFA) continue. At stake is the € 1m package co-funded by the EU and the Irish government to help pig farmers. (Source, Irish Farmers’ Journal)

Spain

Spain to dominate EU pork supplies from 2017?
In a presentation at Space in Rennes last September, Boris Duflot of IFIP contrasted the disastrous situation of the Danish, Dutch and German pig sector with the Spanish one. The Northern European producers have, in average lost money since 2007 and many indebted producers are leaving the industry. In contrast the Spanish integrators have made money since 2007. They have lower labour costs, lower building costs and lower feed costs with a rapidly improving productivity. They have been able to keep investing in their existing and new large-scale units. The maximum size allowed in Spain is 3,500 sows. The only issue clouding Spanish skies for producers is the higher environmental costs. With increasing success at export and recovering consumption, we should take note of the perspective for the next few years of the increasing might of Spanish production. We received at the end of last year a visit from a Spanish integrator that corroborated all the above. (Source, IFIP, our comment)

Alfa buys out WH
The Mexican Alfa Group has bought the 37% of Campofrio owned by WH, the world’s leading pork processor. (Source, Eurocarne on line)

El Pozo takes a stake in Cherkizovo
The Fuertes Group from Murcia (El Pozo) has bought a 5% stake in Cherkizovo for £ 22m. Fuertes, the second largest pork processor in Spain collaborates with Cherkizovo since 2012 for turkey production and processing. (Source, Eurocarne on line)

Who is the best analyst/forecaster in Spain?
According to Mercolleida, the first prize goes to Ramón Bellosta de Leridana de Piensos (an old-fashion medium-size integrator from Lerida), in second place comes Isidre Camí of Piensos del Segre (another old-style integrator from Lerida), and third is Joan Cercós of Agropecuària de Guissona (a major co-operative). A special mention goes to Miguel Ángel Ortega of Campofrio. It must be said that integrators must bet on the future market when buying stock. (Source, Eurocarne on line)

Hungary

Towards a rise of consumption
The VHT interprofession and government are aiming for an increase of pork consumption of 5kg per capita per year by 2020. Due to the financial crisis, pork consumption in Hungary has fallen and the sector has also been hit by the Russian embargo. From memory, consumption now stands at 26kg per capita per year. The lowering of VAT from 27% to 5% from 1 January should also boost consumption. (Source, Trade Magazin)

Positivity at last
The pig population that fell below 3m in 2013 from 10m in 2009 has increased by about 15-20% as the result of the introduced measures, says Horváth István, responsible for the development programme at the Ministry of Agriculture. He also promises more accurate sow data, now that the grey market is declining. Meanwhile, the economy has turned a nasty corner. December was the 31st month of continuous growth for the Hungarian economy. GPD should rise by 2.3% and consumption by 2.5% this year; the country now has a comfortable trade surplus. Retailers led by Tesco all report rising sales, and sausages were the surprising winners for Christmas food. (Source, Trade Magazin)

New pig abattoir starts production in Boly
The Bonafarm plant with a capacity of 20,000 pigs per week, that started production recently, replaces the abattoir of Pick Szeged. Further processing will continue in the historical Szeged plant. (Source, Trade Magazin)

Exports of Mangalitza pork top 1,000 tonnes
Spain accounts for about half the total exports with Japan and Hong Kong other sizeable clients. The government aims to increase the number of sows to 45,000 with the current three genetics lines accounting for third each of the population, from the current 10,000 sows population. (Source, Trade Magazin)

Súrjany Hús in bankruptcy
The Hungarian pork processor placed in receivership in 2015 will not receive government help unlike major pork processors Gyula, Kométa and Pápa. Still, the plant has received offers from investors. The company has 200 staff. (Source, Trade Magazin)

Romania

Carrefour buys Billa
Carrefour has bought the 86-stong Billa supermarket chain from Rewe. This now makes Carrefour the leading retailer in Romania. (Source, LZ on line)

Slovakia

Cut of VAT on meat
The VAT on meat has been lowered from 20% to 10% from 1 January. This is excellent news and, as in Hungary, this will lower pork volumes going the incentive of using the grey market. (Source, various)

Sweden

Antibiotics resistance conference
This conference took place last month in Uppsala organised by the Food Safety Board. The quality of the papers (in Swedish) is not very high. There are more concerns regarding imported pork than with domestic product. (Source, Livsmedelverket)

Russia

Falling prices
According to the forecast of Nikolai Birulin, chief expert at the National Union of Pig Breeders, pork prices in 2016 will be 10-15% lower than those in 2015. The reasons of this negative forecast are lower incomes, increase of pork import from Brazil and larger volumes of domestic production. (Source, agroinvestor.ru)

New pork complex in Tyumen Oblast
According to Olga Romanets, the Director of Investment, the Tumensky pig-breeding complex in Nizhnetavdinskiy region, Siberia, will cost RUB 6.5 billion (£ 59m) and will produce 24,500 tons of pork annually mainly for local consumption. (Source, meatinfo.ru)

Australia

Pork consumption is rising
Pork consumption is expected to rise from 25.1kg in 2013-14 to 26.5kg in 2019-20 according to statistical body ABARES (Agriculture Commodities Vol.5, 1 March 2015). The market is supplied by 800 pig farmers in Australia with 8 sows or more, with the majority producing under APIQ standards (Australian Pork Industry Quality assurance programme). Roasts and chops are the most popular items and account for half the volume sold at retail. Prepacked items include ribs and pulled pork. The processed products market is in good health with a rise of 1.4% in value (year-on-year to August 2015). The best performing sub-categories are continental sausages and bacon, and the worst performing include cooked frankfurter-style sausages and formed meats. (Source, Retail World)

Craig Mostyn is expanding
The Western Australian company slaughters 12,500 pigs per week or about 10% of Australian output. This represents an increase of 20% on 2014. Some 20% of the pigs will be free range by June and the majority of the free range pork is marketed in the eastern states. (Source, Farm Weekly)

USA

COOL repealed
Faced with heavy retaliatory WTO-backed action by Canada and Mexico, Congress repealed Country Of Origin Labelling (COOL) legislation on 18 December, a move backed by both sides of the Chamber. (Source, NCBA)

Use of antibiotics in pig production
According to an USDA report, some 51% of weaner producers indicate they do not use antibiotics other than for treatment of disease, 23% use antibiotics for non-treatment purposes. Some 38% of fatteners say they use antibiotics only for disease treatment, 40% use antibiotics for performance purposes and 22% say they do not know. Stacy Sneeringer who presented the report, notes, that research shows the extent to which antibiotics benefit production efficiency has declined over time. Before the 1980s, those products improved overall production efficiencies by 10% or more. By the early 2000s, that advantage had declined to 1 to 3%. The reasons for this trend, she says, include improvements in housing, equipment, biosecurity, other types of disease prevention and overall management, which allow animals to perform closer to their full potential without the use of antibiotics for production purposes. (Source, USDA, Drovers’ Network)

Pork industry faces another tight margin year
According to Purdue University Extension economist Chris Hunt, pork production is expected to rise by 1% during 2016. The global market place is casting a dark shadow on the US pork industry, with weak income growth in some countries that buy US pork and a strong US Dollar that encourages more pork imports and stimulates pork production in competitive countries. (Source: Agweek)

More on Chipotle
The discovery of a third outbreak of e-coli in a Boston outlet raises more questions than answers. The strain is a rare one and all cases including another one involving nanovirus poisoning (that now includes a criminal investigation) are not proven to be linked to Chipotle. Still, Chipotle has ruffled many feathers with its claims of GMO-free and antibiotics-free food and is the subject of an intense negative PR campaign. Further to attacks by the US pork sector, Chipotle was the subject of a vicious article in the Wall Street Journal. (Source, various)

China

Forecast for sow herd
Following a massive fall of 14.23% in 2015, it is predicted that the inventory of reproductive sows will reach 40.37 million heads in 2016 (+1.92%). (Source, CNAGRI)

Shanghui opens new factory
Shanghui Group has opened a new factory in Zhengzhou with an investment of £ 80m. The plant specialises in the manufacture of US-style products: bacon, ham and sausages with a capacity of 100 tonnes /day. (Source, CN Agri)

Philippines

Towards EU FTA

EU Trade Commissioner Cecilia Malmström and Philippine Secretary of Trade and Industry Gregory Domingo agreed on 22 December to start negotiations for an EU-Philippines free trade agreement (FTA). The Philippines is the EU's 6th largest trade partner in ASEAN and ranks 44th worldwide. In 2014, the EU exported to the Philippines goods worth €6.8 billion (13% food), while the EU imports from the Philippines amounted to €5.7 billion (12.5% food). This made the EU the Philippines' fourth largest trading partner. (Source, European Commission)

Healthy EU exports
The Philippines have doubled its imports of pig meat during 2015 from 122.000 tonnes in 2014. It is expected that this trend will remain the same this year. (Source: Mercolleida)

Nigeria

Not many abattoirs in Nigeria
According to the Registrar of the Veterinary Council of Nigeria, Dr Marcus Avong, there are only three “standard” abattoirs in the country. Avong told the News Agency of Nigeria (NAN) in Abuja that the facilities were located in Lagos, Borno and Nasarawa states. (Source, Daily Post)

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