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Weekly Overview: Global Slow-Down in Pork Output Forecast

22 October 2012

ANALYSIS - Global pork output is likely to be cut back in order to support strong prices worldwide, according to a new report; prices have risen lately in some regions anad fallen in others. The world wheat market is also undergoing change. PRRS ('blue ear disease') outbreaks continue in Viet Nam.

one of its most turbulent years in history, with dramatically contrasting price movements among pork producing regions worldwide, according to Rabobank in its 'Pork Quarterly Report' for the fourth quarter of 2012.

The report's authors expect global hog prices to remain under pressure in the first part of the fourth quarter, followed by a price recovery towards the end of the year and into 2013. Agricultural commodity price volatility, exchange rate movements and fluctuating Chinese pork imports look set to drive the global pork market in coming years.

Contrasting price developments between pork producing regions has resulted in turbulence for the industry as a whole. For instance, US, Canadian and South Korean markets have all witnessed a large price drop, while prices have strengthened in Brazil and the EU.

China imports remain a wild card but with recent herd expansion and a benign disease environment, no large increases in imports are expected in the short term, according to the report. A key unknown for pricing in 2013 will be the impact of a weak economic environment on demand.

For the last 18 months, wheat has been a passenger on the movements of the volatile maize market but this scenario will not continue. The whole grain market has been marked by a series of global events that has changed the outlook and prospects for the global wheat market.

The first nine months of the livestock situation in Viet Nam has been quite complicated, according to Ron Lane in his report for Genesus. Livestock production, compared with the same period last year, saw breeding intentions and actual matings improve and showed positive results in the first two quarters but tended to decrease in the third quarter due to difficulty in prices (lower livestock prices and higher feed costs) and strong disease issues, especially with blue ear (PRRS). While Foot and Mouth Disease (FMD) was still controlled in most localities in September, there have been more outbreaks of PRRS in four provinces.

In the US, a Representative from California has added his voice to the push for a new bill to monitor antibiotic use on farms.

Energy and Commerce Committee Ranking Member, Henry A. Waxman has announced plans to introduce legislation to increase information on the amount and use of antibiotics in animals raised for human consumption. The bill, the 'Delivering Antibiotic Transparency in Animals (DATA) Act', will provide critical information to the FDA about the amounts and types of antibiotics being fed to livestock.

The bill will require drug manufacturers to provide comprehensive information to FDA on how their drugs are used on farms. The legislation will also require reporting by feed mills for the first time.

The British Veterinary Association (BVA) has welcomed the decision to prohibit the advertising of antimicrobials directly to animal keepers from 2013 in a bid to reduce antimicrobial resistance.

Finally, a lack of biosecurity compliance has been blamed for the spread of African Swine Fever (ASF) in the Krasnodar region of Russia; thefts of pigs and feed were highlighted by the authorities. The Ukrainian government has allocated the equivalent of $3.3 million of compensation for farmers who have suffered losses as a result of ASF.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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