ANALYSIS - The upward trends in US pork exports would have been even more pronounced if feed prices had not risen so dramatically since 2008, according to industry analysts, and it was a technological advance that has supported this increase in pig meat output. Sales of high-welfare pork in the UK have achieved a record. In South Korea, the government is proposing to cull part of the breeding herd in order to overcome the collapse in pork prices while in France, the agriculture ministry is working on plans to support the country's struggling pig meat sector.
High pig feed prices lead to reduced pork output, right? That is a fine theory but it does not fit with the record pork exports of the US in the fourth quarter of 2012.
In their latest CME report, Steve Meyer and Len Steiner explain that the answer to this conundrum lies in the trends rather than in snapshot production levels such as quarterly pork output.
The pork output trend in place as of Q4-2007 was upward but the two analysts believe it was no coincidence that the trend - for pork and other meats - shifted abruptly in early 2008 when the maize price broke through $4.00 per bushel on its way to $7.00-plus that summer, where it has remained since.
At the end of 2008, the rate of growth of output for all four major animal protein species changed dramatically. Although pork appears to have recovered to its pre-2008 trend line, according to Meyer and Steiner, this is linked to a major technological development. In 2007, vaccines were launched to control porcine circovirus (PCV), widespread uptake of which increased the numbers of pigs that made it market.
They highlight that here, production economics and animal welfare were both impacted positively.
As a result of vaccination, there was a surge in pork output in Q4-2007 which, Meyer and Steiner believe, would have continued had it not been for high feed costs.
In summary, they say, the trend for pork production given the continued use of circovirus vaccines would have had a similar slope but at a higher level, had feed prices not escalated as they did.
In a related development, the US National Pork Producers Council is calling on the government to postpone implementation of proposed changes to Mandatory Country of Origin Labelling (COOL) until the World Trade Organization has fully addressed the issue.
In South Korea, the government has plans to cull up to 100,000 sows and gilts to help stabilise pork prices, which have fallen by nearly one-third in just seven months, according to the agriculture minister.
Russia's Prime Minister, Dmitry Medvedev, is reported to be angry that retail pork prices remain high in spite of the country's membership of the World Trade Organisation (WTO).
In France, the Agriculture Ministry has set out a three-pronged attack to restore confidence in the country's pig meat sector, following discussions with industry representatives.
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