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AHDB Pork Weekly Export Bulletin


11 July 2016

AHDB Pork Weekly Export Bulletin - 11 July 2016AHDB Pork Weekly Export Bulletin - 11 July 2016


British Pig Executive Weekly Export Bulletin

The immediate and welcome short term effect of Brexit has been the sharp fall of the overvalued Sterling against the Euro and the US Dollar.

AHDB has created an internal working group on Brexit and we have already exchanged with many bodies including Defra. For information, in 2015, the UK shipped 70% of its pork exports to the EU, although this is expected to fall to 60% in 2016. The great majority of offal is exported to Third Countries directly or indirectly.

In April, AHDB submitted a proposal to Chafea, the marketing agency of the European Commission for marketing activities in five Asian and Pacific countries (China, Japan, Vietnam, India and Australia) worth €1.95m over three years. The proposal was made under Section 10, which covers marketing programmes specially directed to the distressed pork and dairy sectors and should be unaffected by the UK leaving the EU at some point in the future. We should know in October if we have been successful in this endeavour, which would be co-funded for 80% by the European Commission. So far, 33 proposals have been submitted under Section 10, representing 420% of the €20m made available. For reference, the UK has submitted five single-country proposals and one multi-country proposal.

AHDB Pork, UKTI and BPCC jointly commissioned a study on consumers’ attitudes towards imported pork in China. The report is available on request from the Export Office and we will extract some key information over coming weeks for this bulletin.

AHDB hosted a large group of Ukrainian visitors, led by UKTI, five of which were involved in pig farming, including the vice-chairman of the Ukrainian pig association. Among other things, they visited the livestock show in Birmingham.

France

The charcuterie sector
Benefiting from the jump of consumption of charcuterie products out of home, the sector has grown by 1.8% in volume in 2015 to €6.4 billion turnover. Investments are stable at €200m and employment is 37,000 full time jobs equivalent. The net result before tax should be above 1.5% for 2015. A quarter of businesses in the sector showed a deficit but the decrease of prices of cuts last year eased the situation. Household purchases of charcuterie fell by 0.5% (the fourth time over the last five years) in volume and by 0.7% in value but consumption out of home increased by 9.5% to 289,000 tons. This surge in consumption is explained by a strengthening trend of bistros and restaurants including a charcuterie tray in their menus. The other positive trend is exports, and recently two processors have been approved to export to China.

Pork politics
The processors’ association FICT is refusing to contribute to the pig reserve requested by the federation of producers FBP (to support producers facing cash flow issues). FICT is also strongly opposed to the mention of the country of origin of meat ingredients in prepared meals. Nonetheless, the 5 July the EU gave the green light to a two-year test which could start in January 2017.

Antibiotics-free pork
Following the path of Broceliande (Cooperl) and Fleury-Michon, Madrange is launching for Casino a new reference of cooked ham without antibiotics. However, contrary to Coorperl and Fleury-Michon who guarantee ‘free from antibiotics from the end of the first age’ (42nd day), Madrange-Casino’s claim starts from the date of birth of the piglets. This is the first own-brand cooked ham without antibiotics on the self-service shelves, Carrefour has a fresh pre-packed reference in the charcuterie counter.

Market data for week 27
Pork:
56 TMP base price is still increasing, +1.5 cent on Monday at Plérin. The market is fluid, with the weight of carcases again at the lowest: 93.4. It is 970g less than last year at the same date.
Piglets:
No change for the market of piglets. Trade is still fluid and prices are stable or increasing a little. FNP-Coop de France indices increased by 7 cents for 25kg and +€1.26 for post-weaning.
Cuts:
According to the American Association for the exporters of meat, United States exported 722,645 tons of pork meat all over the world during the first four months of the year. It is 0.5% less than one year before. As for the European Union, China is a key outlet this year, with an increasing market of 117% at 114,482t. The other big markets for USA are decreasing, with sales to Mexico and Japan decreased respectively by 10% at 213,360t and by 15% to 127,808t. United States sales are lower also to Canada (-1%) and to South Korea (-35%).

Denmark

Perspective on Danish farm debt
An Irish report on Danish farm debt throws an interesting light on this important and characteristic feature of Danish farming. Most farms in Denmark are heavily indebted, with the debt carried over from generation to generation due the inheritance system. The indebtness is rising but Danish banks are very reluctant to call for their due as they fear heavy losses and write-offs if farms are sold considerably below book value. They prefer instead to offer additional loans to farmers. The high cost of debt servicing means return of capital is very low and the value of assets is also low. Interestingly, the land value in Denmark has collapsed from €36,000/ha in 2014 to €10,000, showing that the system is under strain. However, despite the current financial difficulties, the great majority of farms are technically insolvent, because Danish banks will keep propping up the system. (Source, various)

Spain

New abattoir for Lorca
Grupo Alimentario de Lorca has started to build a new meat complex with a slaughter capacity of 1.5m pigs and 25,000 cattle. (Source, Eurocarne)

Ukraine

Difficulties for producers
Speaking this week to Ukrainian producers, they say that their poultry colleagues are much more profitable They still have to deal with new outbreaks of African Swine Fever (ASF) from backyard farms (the latest on 30 June in Khybalkivka, Kulykivskiy region of Chernihiv Oblast and 4 July in Lisove Talnivsky region in Cherkasy Oblast) due to poor sanitary controls, the effect of the closure of the Russian market and low prices, due to subdued consumer demand. (Source, own, various)

Russia

No end in sight for ASF
In June, over 20 new outbreaks of ASF were registered in Russia among domestic pigs. The outbreaks took place in Kaluga, Briansk, Oryol, Moscow, Lipetsk, Novgorod and Saratov oblasts. On 4 July, more cases of ASF were registered in Riazan Oblast. (Source, Agro2b.ru Meat Info Russia)

China

Prices are sliding down
While still high, pig prices are on the way down. Carcase prices are RMB 26.16/kg (£2.95/kg), a high figure, due to the recent devaluation of Sterling. (Source, CNAgri)

New Hope plans
The company intends to invest £900m over the next few years in order to boost its production capacity. In particular, £550m is earmarked for 11 large pig projects. These projects, typically with a production capacity of 500,000 slaughter pigs per year, should bring the overall production of New Hope to 4.91m pigs by 2020. There are located in Liaoning (1), Hebei (3), Shandong (2), Sichuan (4) and Guangxi (1). However, it is not yet clear how firm or realistic these plans are. New Hope produced 870,000 slaughter pigs in 2015. (Source, CNAgri)

Pollution scandal
A 10,000-pig farm in Jiangsu Province built on a toxic refuse dump has sparked fear and anger in the media and population. The farm was built over 14,000 tonnes of mostly chlorobenzene, stored in drums buried underneath the site, which has been linked to cancer deaths. Local vegetable production was ‘sold on’ and not consumed locally, but the authorities had not acted on the issue with the owner, appearing the local mayor and villagers with payments. (Source, Beijing Youth Daily)

Spanish Meat opens an office in Beijing
The new office which services China and Southeast Asia will provide support to Spanish meat exporters. Also, Interporc will attend IFE in Guangzhou. (Source, Cde Comunicación)

Brazil

Export boom
For the first six months of the year, Brazil exported 301,000 tonnes of pork products, a rise of 55% on the first quarter of 2015. (Source, Eurocarne digital)

Mexico

Granja Carroll expands
The Mexican pig producer has announced a US$ 550m investment in pork production. This includes 14 new pig production units and the building of an abattoir. The group intends to double its pig production to 2.6m head per year and employ an additional 2,300 staff. (Source, Eurocarne digital)

Grupo Norson starts exports to China
The company owns a joint venture with Shuanghui. The plant, approved for export, is located in Hermosillo, in the state of Senora. (Source, Eurocarne digital)

Columbia

Consumption increases
Pork consumption is expected to jump up by 15% this year to 8.6kg per capita. Production rose by 25% in 2015, according to Asoporcicultores. (Source, Eurocarne)

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