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Weekly Overview: Mixed Fortunes in Global Pig Meat Markets

07 May 2013

ANALYSIS – The additional costs of compliance with EU sow welfare rules is being blamed for short pig supplies and high prices in Spain, while the slump in US pig meat exports is attributed to the Russian ban on meat imports from animals given ractopamine. Under pressure from retailers, Dutch producers are moving away from castrating boars. Among the leading processing companies reporting results, those from Brasil Foods and Atria showed marked growth, while Tyson Foods displayed some optimism following what was evidently a challenging quarter.

In a review of the pig meat market in Spain, Genesus reports that there have been fewer pigs than in previous years and prices are lower every week and lower than other years in the same week. This also explains why prices are at a five-year high. These effects are largely attributed to the required adaptation to EU animal welfare regulations and high feed.

In the US, pork exports in March were down 18 per cent from a year ago in both volume (163,004 metric tons) and value (US$469.5 million), reports the US Meat Export Federation. Trade was hampered Russia closing its market to meat from pigs (and other animals) that had been given the beta-agonist, ractopamine as well as larger domestic supplies in China and South Korea and weakened demand in top markets Japan and Mexico.

The practice of castrating male pigs in EU varies markedly between member states. Only around half of male pigs in the Netherlands are now castrated. This compares with about 98 per cent in 2006, a change prompted by pressure from Dutch retailers explains this difference.

In France, Germany and Denmark, the proportion of entire boars is still only five per cent, 10 per cent in Belgium and in Sweden, 20 per cent, according to an EU official.

Several pig meat processors have been in the news in the last week, reporting quarterly results, which reveal a mixed picture for the industry globally.

Brasil Foods reported soaring profits. The Brazilian meat, poultry and dairy processing giant, ended the first quarter of 2013 with net revenue of R$7.2 billion, increase of 13.8 per cent over the same period of 2012. Net income grew by 134 per cent, reaching R$359 million.

Also on a roll is Finnish meat processing group, Atria, which reported improved sales and profits for the first quarter compared with the previous year.

Meanwhile, Tyson Foods, based in the US, reports that it expects a strong second half of the year after weathering the challenges of the second quarter.

In the UK, Cranswick has acquired the whole of the issued share capital of pig rearing company, East Anglian Pigs Limited.

In the French region of Brittany, administrators appointed to pig processor, GAD, are reported to be investigating all options to save the company.

Finally, in China, Tianli Agritech, Inc., a leading producer of breeder hogs, market hogs and black hogs, headquartered in Wuhan City, has announced that it has started to sell its branded black hog products through retail outlets locally.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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