Denmark

Market

The situation at markets for pork continues to be positive. The weather has become warmer and resulting in a demand in Europe that is marginally larger than the supply. It is a good position for implementing price increases. Third markets remain unchanged, i.e. with fine and stable sales.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

More than 12 million pigs in Denmark

According to Statistics Denmark’s latest pig count, there were 12.2 million pigs in Denmark on 1 April. It is an increase of two per cent compared to the same time last year. The number of sows is completely unchanged but in return, there are more slaughter pigs especially in the group above 50 kg. It is the group that has had the highest progress with a growth by more than six per cent. There are also more young sows, while there are fewer gilts. According to Statistics Denmark, the export of live pigs was at 8.3 million pigs in 2009, of which 83 per cent were piglets. The total Danish production of pigs was 27.7 million pigs in 2009, including exports of live pigs.

Positive expectations for Danish exports to Russia

Although the export of Danish agricultural products and food to Russia has dropped from €350 to €225 million compared to 2006, Agriculture & Food is convinced that the market will turn around. Danish food businesses have been able to meet all requirements set by Russia. It has established trust and a positive relationship with the Russian importers and authorities, which can be further improved during the next years, CEO in Agriculture & Food, Claus Soegaard-Richter, assesses. Especially the Danish pork has been successful in Russia. 10 per cent of the aggregate Russian import of pork comes from Denmark. It is not least the food safety that makes the difference because the Russians are very focused on this issue. The Danish pork producers have been particularly good when it comes to the combination of food safety, veterinary preparedness and price, says Mr Soegaard-Richter. The Danish export of pork to Russia represents more than €135 million but according to Mr Soegaard-Richter, the export should increase further. If the Danish pig meat producers want to realise the large potential that lies in Russia, the companies need to cooperate with the Russians through long-term contracts, assesses Claus Soegaard-Richter. Denmark’s most important competitors in the market are Germany and Brazil, which together account for half of Russia’s pig meat imports.
(Source, Berlingske Tidende)

France

Partnership for organic pork

The demand for organic food does not weaken in France, but the meat industry in general and the pig meat industry in particular are a bit behind. A new venture was launched last month by the two processors Orléans Viandes and Sicaba and the three groups of producers Cirlhyo, Copalice and Agrial in order to organise the supply of organic pig meat and boost the market. So far, the three groups only represent 13,000 organic pigs per year but the injection of €1.2 million in the project by Agence Bio will certainly have an impact in the regions involved: Limousin, Auvergne and Bourgogne. There are many issues that need to be dealt with in order to organise a reliable supply: irregular supply and quality, processing tools not adapted to niche markets. The project includes in store marketing activities with specific POS material.

Pork mince

Maître Jacques, pig meat processor based in Brittany (near Rennes) is investing in third and fourth processing of pig meat and pig meat products. The company is now investing (€1 million) in the production of a new range of pork mince: plain, with cheese or with tomato sauce. Fat content is limited to five per cent and the retail price is below €10.00 per kg, one 200g tray costs less than €2.00 to the shopper.

Pigs

The negotiations of tomorrow, in Plerin, promise to be long. On the one hand, offer remains hardly sufficient for the demand and the European market is rising. On the other hand, it is difficult for retailers because the consumption is not good.

Piglets

No evolution to be noted; the market remains steady and good.

Cuts

Only the price for legs remains good, the consumption being considered as very average.

Germany

Market

Prices for half pig carcasses have slightly increased on the wholesale markets; sales of cuts were inconsistent. Main cuts demanded were barbecue cuts such as collar or bellies. Sales before 1 May did not reach expectations and at the beginning of the week some orders were reduced or even cancelled.
(Source, AMI)

Slaughter numbers

While EU pork production has suffered in 2009, there are now indicators showing the consolidation of the sector. According to the EU Commission, the decrease in pig numbers has significantly slowed down and EU production is expected to slightly increase again in 2010. For Germany, AMI expects an increase in pig slaughterings by 2.5 per cent to 57.8 million.
(Source, fleischwirtschaft)

Animal welfare

Following the discussions about the castration of piglets, animal rights activists are now targeting the tail docking issue. The ministers of agriculture aim at setting recommendations for the handling of tail docking in piglets. As millions of piglets are imported to Germany every year from neighbouring countries, the German ministers consider this a European problem rather than a German issue and therefore, the ministers’ conference plans to develop guidelines together with interested EU partner countries such as Denmark or Holland.
(Source, afz)

The Netherlands

Meat promotion the highest traffic generator

The meat category remains the best to generate store traffic according to Laurent de Groof from GfK. For example, a thirty per cent cut on the price of mince brings a 5.7 per cent increase in store visits. This goes a long way in explaining the brutal price war on meat taking place since 2006 in the country.

Spain

Bacon: the big winner

Once again the products considered healthy and with the best perceived value have acted as an engine for the domestic consumption for processed meat; bacon led with a 16.1 per cent more volume traded than in 2009, well above the 2.1 per cent sector’s growth. Behind, are the turkey cold cuts and cured chorizo, which grew by 3.1 per cent in volume.

Campofrio remains the leader

The market is led by the Group Campofrio with a 144,000t production in 2009, in a market where more than one hundred companies operate. The main companies following the leader are El Pozo (89,500t), Casa Tarradellas (80,630t), Grupo Argal (40.751t) and Ind. Carnicas Loriente Piqueras (33.223t). The best performing companies were Argal, Embutidos Montsa y Hemosa, which avoided the Spanish internal crisis and raised their benefits by higher exports, with growth of 13.8 per cent, 22.0 per cent and 89.08 per cent, respectively.

Processed meat exports

Exports of processed meat products in 2009 reached their highest level and highest growth rate rising to 17.2 per cent in volume to 99.930t. In value, however, there was a fall of 1.8 per cent down to €440.4 million, which shows the price reduction which the national manufacturers have had to make in order to maintain their share on overseas markets. Embutidos Fermin, is the first company with facilities for the slaughter of Iberian Pork, approved by the US and Canada.

Ukraine

New pig fattening complex

The new pig fattening division of livestock complex CJSC APK-Invest located in Grishino village (Donetsk region) was launched at the end of April. Its capacity allows the production of up to 50,000 pigs per year. The first animals were brought to the new complex this spring. Currently the total capacity of all CJSC APK-Invest pig farms is 200,000 heads of slaughter pigs per year. Also, CJSC APK-Invest began the construction of a further livestock complex in Donetsk oblast with a production capacity of 100,000 slaughter pigs per year which makes APK-Invest unique on the Ukrainian market.

$25 million loan for Hlobyno?

The International Finance Corporation (IFC) is considering a loan of $25 million to Hlobyno group (Poltava region) as loans or investment capital. Future investments should increase the group’s production capacity up to $100 million. The number of pigs may grow from 90.000 to 400.000, sausage production from 1,700 tons per month to 2,500 tons per month. This project will be considered by the Board of Directors of IFC on 14 May. Hlobyno is one of the largest producers of sausage products in Ukraine. The group members are Hlobynskyi Meat Plant, OJSC Hlobynskyy butter-making plant, LTD Hlobynskyi beef and dairy complex, Hlobynskyi pig complex Ltd and Hlobynskyi Rayagrobud.

Russia

Cherkizovo Group increases sales volumes

Sales volumes in the pork division of Cherkizovo Group in the first quarter of 2010 increased by 79 per cent to 17,505 tons of live weight, compared to approximately 9,780 tons in the first quarter of 2009. Prices increased by six per cent from $2.20 per kg live weight in the first quarter of 2009 to $2.33 per kg of live weight in the first quarter of 2010 (excluding VAT).

Belarus

Belarus'changes pork import quota distribution terms for 2010

Ninety per cent of the quota for the period of the first seven months of 2010 on imported fresh, cooled, frozen and trimmed pork will be distributed (proportionally to the average volumes imported during these two years exclusive of pork originating from and imported from Russia and Kazakhstan) by the Ministry of Agriculture of Belarus’. Ten per cent of the quota will be distributed between the economic operators that had not been involved in pork import during 2008-2009 and declared their demand on it for internal manufacturing processes before 1 April 2010. The Ministry of Agriculture of Belarus’ states that the Customs Union Commission granted the Republic of Belarus the right to import 30,000 tons of fresh, cooled or frozen pork in 2010.

USA

Higher pork prices...

Hog prices have surged to an all-time high this week after US producers slashed their herds in response to high feed costs and low pork prices in 2008-09 and even reached the symbolic US$ 56-58 cents per kg live weight. Even the price of sow meat matches pork prices and the price of adult boar meat is up from 16 to 25 cents per kg. "We haven't seen the true impact of higher pork prices on demand yet," said Christopher Hurt, an agricultural economist at Purdue University in the US. "That's still to come as the retailers raise their prices." Smithfield Foods, the largest US pork seller, said: "Over time, higher raw material costs will translate into higher retail prices for pork products." Many small-medium US meat processors are bleeding red ink from high raw material costs that they often can't pass on to customers. Some good news for US livestock producers is that buoyant "red meat" exports, particularly to Mexico, keep supporting high prices. Low exchange rates have helped somehow but these are now tilting upwards.

...due to lower supplies

The most recent combined US and Canada hog inventories are now pegged at 75.623 million head, 2.7 per cent lower than a year ago. In addition, Canada’s breeding herd is 5.6 per cent lower than the previous year and an indication that Canadian hog producers remain very much in a liquidation mode. The combined US and Canadian sow inventories are now estimated to be 7.064 million head, 4.2 per cent smaller than a year ago and eight per cent fewer than in 2008. That kind of decline in the overall breeding herd helps explain the overall tight hog supplies currently seen in the US market.

China

Prices and imports rising

At 409,000 tonnes for the first three months of the year, pork imports are up 18 per cent. Local prices are expected to rise from their current low level for the rest of the year. Current inventories stand at 440 million head, down 1.6 per cent from one year ago.

May 2010