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AHDB Pork Weekly Export Bulletin


25 April 2016

AHDB Pork Weekly Export Bulletin - 25 April 2016AHDB Pork Weekly Export Bulletin - 25 April 2016


British Pig Executive Weekly Export Bulletin

UK Pork exports of fresh and frozen pork rose by 16% year-on-year in February, to 17,800 tonnes and increased by 25% in value to £18.4m. The growth was driven by a rise in shipments of sow meat to Germany (+50%) pork to China (+24%) and Ireland (+11%). Exports of offal increased by over half in February, compared to a year earlier, to 6,800 tonnes. March and April export volumes look very good too. EU pork exports were up year-on-year by more than 30% in February, to 168,000 tonnes and 23% in value. Export volumes to mainland China are up 107%, to Hong Kong 51%, to Japan 28% but down to Korea by 23%.

The Chinese market is on fire, with carcase prices at RMB 25.96/kg (£2.80/kg!). Chinese statistics report that production in the first quarter in up 5.9%. The Chinese are reporting that the number of sows has started to increase again – pig inventory is up 0.9% in March, which will mean a greater availability of pork in the first quarter of 2017 but will this increase be enough to stem current shortages in 2017? Meanwhile, the export boom continues with prices still rising. This has many consequences. For instance, most of the pork frozen under Private Storage Aid in the first part of the year will end up in China. There are already reports of shortages for a few products in Europe. Meanwhile, The China Meat Association (CMA) said the nation should stick to an open policy for the pork sector, in response to a public call to boycott imported pork products to protect the local industry. The arguments emerged in early April after WH Group, the market leader, said hog prices in China are too high and should decline by a half. Finally, we were interviewed by Reuters on the situation of the pig market in China.

Three British pork processors were represented on the British stand at the World Food exhibition in Warsaw (19-21 April), alongside English lamb. The gourmet pies and British sausages were well received and should get listings.

France

Communication campaign
Inaporc is supporting the “Le Porc Français” campaign, as part of the collective “Viandes de France” campaign aiming to get consumers to choose French pork first. Adverts will be placed in the French regional public press on 22 and 23 April, simultaneously with adverts in women’s press, culinary magazines and on TV. Altogether, 33m people should see the campaign at least twice during the spring. A web campaign is also on femmeactuelle.fr, cuisineactuelle.fr and 750g.com. Finally, POS material will be distributed to supermarket and independent butchers

Direct sales
According to IFIP, French pig producers are attracted by direct sales and today 94% of pig farmers who process their pig meat on the farm claim they would do it again. IFIP conducted a survey with pig farmers (breeder-finishers, finishers or post weaning finishers) processing their pig meat for over 10 years and found out the following:
Average cost of finishing: €2.37 per kg including 35% on feed, 25% for piglet purchase, 16% labour, 13% depreciation and 11% other charges
Average cost of processing: €5.50 per kg including 43.1% finishing costs (above), 26.7% labour, 23.1% operational charges and 7.1% depreciation and financial costs
Average turnover per pig varies from €493 to €709 per pig
Increased number of pigs processed over the years, the increase over 5 years varies from 134% to 152% for all sizes of farms sampled.

Markets
Pork: The 56 TMP price remained firm this week (up €c0.1) in a stable European context. According to “Le Marché du porc Breton”, the comeback of fluidity was confirmed in France. The average carcase weight was lower, down by 150g although remaining at the high level of 94.8kgs.
Piglets: There was no evolution on the French market. Prices are stable or slightly increasing. Offers are moderate for a stable demand. Last week, the FNP-Coop de France prices increased by €c1 for 25kg weaners and €c12 for 8kg piglets, underlining the fluidity of exchanges.
Cuts: According to “Le Marché du porc Breton”, 255.31m pigs were slaughtered in the European Union in 2015, that is 6.584m more (+2,65%) than in 2014. The increase in production was more marked at 3.6% to 22.937m tonnes as a result of higher carcase weights in several countries, for example Spain, Italy and France.
Weaners: There was no evolution on the French market. Prices are stable or slightly increasing. Offers are moderate for a stable demand. Last week, the FNP-Coop de France prices increased by €c1 for 25kg weaners and €c12 for 8kg piglets, underlining the fluidity of exchanges.

Russia

The ASF situation
Rosselkhoznadzor has published the results of their ASF monitoring for the first quarter of 2016. During the period in review, there were 15 outbreaks of the disease registered in Russia, 9 of them in domestic pigs. During the same period in 2015 18 outbreaks were registered. (Source, fvsps.ru)

Pork prices increased
Last week, Russian prices for live pigs increased by 4.1% compared with the previous week, half-carcase prices were up by 9.6%. As of 18 April the average price for live pigs of the first grade was RUB105 per kg (£1.10 per kg). (Source, pigua.info)

New breeding complexes for Ariant
Ariant Agricultural Holding, the largest agricultural holding in the Ural Region is planning to launch nine new pig-breeding units. Three will be in the Yemanzheliyskiy region with 20,700 sows and six will be located in the Uvelskiy region with 19,900 sows. Total investment in the project is RUB10b (£105m). (Source, acexpert.ru)

Ukraine

Pigs population update
According to the State Statistic Service, on 1 April the pig population in Ukraine amounted to 7,285,300 head, 2.6% fewer year-on-year. (Source, agroperspectiva.com)

Pork export results
According to data published by the Union of Pig-breeders, total pork exports in March 2016 totalled 89.1 tonnes, five times less than in February. The main reason for the decrease is the Russian ban on Ukrainian pork. Total volume of pork exported in the first three months of 2016 was 810 tonnes. (Source, piua.info)

Switzerland

More meat than meet the eye
Although Swiss statistics show a fall of meat consumption over the last two years, this fall has been matched by a marked increase of trans-border household purchases. This is now estimated at 8-10kg per person. (Source, Neue Zürcher Zeitung)

Poland

Profitable meat processing
A comprehensive study by Jadwiga Dro?d?, the Institute of Agriculture Economy, shows a return on equity of Polish red meat primary and secondary processors of 17.3% in 2015 (up 1.7% on 2104). This very good performance on international standards, higher than poultry and grocery in Poland, is largely due to the good export performance of the Polish meat sector. (Source, Gospodarka Mi?sna)

Mexico

Update on access
Speaking to Spanish exporters, the news of the opening of the Mexican pork market looks premature. The Mexican Authorities (SENASICA) approved the Spanish establishments, which had been visited at the end of 2014. However, a final agreement on the veterinary certificate is still missing. SENASICA and Spain are negotiating a model on the basis of the EU certificate. A final agreement should be concluded in the next few days and, with 12 abattoirs now approved, in one month the first shipment may leave Spain to Mexico. The first 5 years (therefore until 2021) will be used as, “probation, period”. During this period, four additional Spanish slaughterhouses will be audited. In the event that these additional audits have a positive outcome, Spain can start to export from every establishment proposed by the Spanish Authorities, without additional visits from SENASICA. Offals are also under negotiation. Access for France, Germany, Italy, Poland, Romania, Portugal and Belgium lags some way behind. The same procedures as Spain, with, probation, period and approved plants will apply. (Source, UECBV)

China

Update on farm support
Last week we reported on the removal of subsidies for pig farm investments as a factor to the fall of the Chinese sow herd. However, we must mention support for the planned establishment and start-up funding for boar studs to provide semen for the farms within a 100km radius of the studs. With a reliable semen source for AI, the onus for farmers will shift from keeping their own boars to using the genetics provided by these boar studs. (Source, The Pig Site)

Producers’ demographic contribute to the shortage
The age of Chinese pig farmers is relatively high and more individual farmers may exit the industry. Most of farmers are 40-50 year-old middle aged couples; their education levels are low and farm genetic levels are poor. With the push for modern breeding and standardisation, more and more individual and small farmers will exit the industry actively or passively as they grow old. (Source, CNAgri)

World

Shakeup of shipping
In a bid to target savings on Asia routes, four big container operators, including China Shipping Group and France’s CMA CGM, announced plans to form Ocean Alliance, a new shipping group that will rival the dominance of Denmark's Maersk Line and Mediterranean Shipping. (Source, LZ)

More world exports
USDA is forecasting an increase of world pork exports of 7.6% this year, up from 7.2% in 2015 and 7.0% in 2014. World production should decline by 1% this year to 109.3m tonnes, led by the fall of Chinese production. (Source, USDA)

Netherlands

Promotion of pig farming producers’ organization COV
Producers’ organization COV is donating €50,000 for the promotion of pig farming. The industry has limited funding, particularly in these difficult times, against the might of the animal welfare lobby but is effective. Campaigns include Varkens in Zicht, Stap in the stal, Weekend van het varken, where the public is invited to visit producers and Klasseboeren where visits are organized for school children. (Source, Boerderij Vandaag)

Germany

Tönnies expands
With the takeover of Tican, Tönnies will increase its market share and the integration of Tican will keep the firm busy this year. In 2015, the company slaughtered 18.2m pigs and 1.2m cattle. The company will modernise its Legden beef abattoir in 2016 and its Kempten and Wilhemshaven sites. It is also planning for a new beef abattoirs. Brørup just benefited from an investment of €14m. Tönnies is also busy with ventures in Russia and Serbia. Finally, there may be some Spanish abattoirs worth buying this year, as some insolvencies are expected. (Source, AFZ)

Gausepohl buys Feinkost Menzl
The small processed meat company based in Versmold employs 36 staff. (Source, AFZ)

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