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Weekly Overview: Producers Call for Support

11 September 2012, at 11:13pm

ANALYSIS - Pig producers across the world have been expressing fears about their future as feed prices remain high, and there have been calls for government help, which has already been forthcoming in China and the US. In an interesting development in Ireland, pig meat sample testing has begun with the aim is to provide assurances about its origin. Following the emergence of the variant H3N2 influenza virus in people and pigs in the US, producers in Canada and Australia are being warned to be on the alert for outbreaks in pigs and people in their countries.

In a report from Genesus last week, China was described as 'the pork powerhouse of the world'. Ron Lane, Senior Consultant for Genesus China, justified the comment by explaining that more than 51 per cent of the world's population of pigs are raised in that country. The signs are that, with feed prices rising, producer profits are falling; the government is taking action.

The inventory in July 2012 - breeding stock was around 49.54 million and total numbers of around 460.75 million - is similar to a year previously.

Profit margins continue to show declining returns, according to Mr Lane. Current profit margins are showing ranges from break-even to losses from RMB40 to RMB110 (US$6.35 to $17.46) per head in some major pork production regions of China. Average profit for 2011 was estimated at RMB500 ($79.37) per market pig.

Price/profit predictions for 2012 include: pig price of RMB16.6 ($2.63) per kg liveweight; average price of corn at RMB2,500 ($396.83) per tonne; pig and corn ratio of 6.93:1 and average profit of RMB350 ($55.56) per market pig.

The National Development and Reform Commission (NDRC) started a new round of frozen pork purchasing and storage in August, apparently with the aims to bring pork reserves to about 100,000 tonnes and also to stabilise the price. As mentioned before, the high summer temperatures that causes lower consumption of pork along with over-production, keeps the market price low. By buying the pork, the NDRC hopes to stimulate some market pig price increases.

Beijing Orient Agribusiness Consultant Co. predicts that the import of US pork will grow by 29 per cent this year. Last year, there were 620,000 tons of pork imported into China, of which, 480,000 tons came from US suppliers.

A global shortage of pig meat is being predicted by the UK's National Pig Association (NPA). The world's pig farmers are warning of a shortage of bacon and pork next year because pig-feed has become unaffordable following disastrous growing and harvesting weather. Governments are becoming increasingly concerned.

Around the world, pig farmers are selling their herds because they can no longer afford to feed their pigs. As well as the China's move to put pig meat into cold storage, the US government has introduced a pork-buying programme in a bid to keep its pig farmers in business.

Pig industry leaders from across the European Union met in London last week to explore ways to ensure pork remains the world's most affordable red meat, reports NPA. They reported that pig herds are being sold because prices are not rising fast enough in supermarkets to cover the cost of record-high pig-feed costs.

"It usually takes at least six months for higher production costs to filter through to shop prices — but pig farmers simply haven't got that long," said NPA chairman, Richard Longthorp.

In an interesting development in Ireland, sample testing has begun as part of the 'DNA-certified' programme for pig meat. The aim is to expose misleading labelling and provide assurances to producers and consumers about the origin of pig meat.

Meanwhile, Irish farmers are reported to be losing patience with retailers over pig prices. Irish Farmers Association (IFA) President, John Bryan, said that retailers that fail to address escalating production costs by not returning higher prices to producers are threatening farm viability.

Mr Bryan has also said in the last week that a major national effort is required to assist the farming sector to recover and get back on track following the worst weather on record over the summer.

Concern is growing in several countries about a possible new flu epidemic, following the emergence of the variant H3N2 influenza virus in people and pigs in the United States. In Canada, the food inspection agency is reminding pig producers to take appropriate biosecurity measures to protect the health of their animals and people who may have contact with them. The death of 40 pigs in a flu outbreak in southern Queensland, Australia, has sparked concern.

And finally, turning to news of African Swine Fever, another village pig herd in the Krasnodar region of Russia has been culled following an outbreak there in August.