October 2, 2012

                                                                                             

BPEX Export Bulletin - September 2012 (Week 39)

  

    

This week's export news

 

Traders at the Intermeat show in Duesseldorf in Germany report a continuous undersupply of the European pork market. The current high price level is said to be maintained.

 

 

Denmark

 

Market

 

On the European market, fresh legs are sold at unchanged or slightly increasing prices. The market for shoulders and production meat is under pressure and prices remain unchanged or are slightly declining. As to other cuts the price level remains unchanged. Exports to the British bacon market remain unchanged and the situation is stable. With respect to markets outside of Europe, the activities are fine in Japan, China and Russia. (Sources: Danish Crown, Tican, Danish Food Council)

 

Bacon sales up

 

Since 2004, Danish Crown more than doubled their sales of bacon. Between 2009 and 2011, the growth rate was 25%. Exports to Sweden grew by 59 % while sales on the domestic market were up by 28%, informs CEO of Danish Crown, Kjeld Johannesen. In Europe, Danish Crown is close to becoming market leader in bacon, he says.  In fact, the group's Oldenburg site in Germany, where the major share of production is located had problems to meet the demand and production capacity at the site will be increased to as much as 10,000 tonnes. (Source: Borsen)

 

Farmers send more animals for slaughter

 

Presently, all over the world millions of farm animals are sent to the slaughterhouses. According to a statement from the Dutch Rabobank, it will contribute to general price increases on food products of up to 14% next year. For a short time, there is going to be an abundance of meat while farmers get their animals slaughtered in order to reduce the feed bill. But next year, the herds will be reduced to a level that there will not be sufficient animals to meet demand and so prices will explode, says Nicholas Higgins of Rabobank. According to the Rabobank analytic, the main effect will be noticeable for bacon and other pork cuts as a pig population can be re-established fairly quickly and accordingly, it is more manageable to cut in times of crisis. According to Karl Christian Moller from Danish Crown, the financial crisis and increasing costs coupled with problems to obtain financing from the banks has pushed the development during a long period of time. The development is being enhanced by new animal welfare regulations in the EU and the increasing feed prices over the latest months. We see that producers in the US, Canada and Europe are now reducing their stocks considerably he evaluates. Moller expects the decline in production to result in price increases of 5 to 10% on meat. The slaughterhouse group expects that the highest price increase will be on poultry followed by pig meat and beef. (Source: Berlingske, Maskinbladet)

   

Danish Slaughterhouses - payments week commencing 24 September 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 – 86.9 kg)	Euro 1.654	Euro 1.654
Difference to last week	Unchanged	Unchanged
Sows (Above 129.9 kg)	Euro 1.265	Euro 1.265
Difference to last week	0.027	0.027
Sows (Above 129.9 kg)	Euro 1.095	Euro 1.095
Difference to last week	0.027	0.027

   

   

France

 

Corsican charcuterie

 

With 300 producers, Corsica is suffering from a lack of pig production. Only 10% of charcuterie sold on the island comes from Corsica when consumers (mainly tourists) believe all "Charcuterie Corse" is locally produced. Jean-Félix Giorgi based in Frasseto, is a producer, processor and retailer of genuine Corsican charcuterie (pâtés, saucissons, hams). He is leading an initiative designed to protect and develop local production by creating a Corsican Label Rouge. His hams come from pigs reared outdoors ( 8 animals per hectare), they are cut and salted cold, smoked for a week and they dried for a minimum of six months before being matured at 10°c and 80% moisture for up to 18 months. Today, industrial production of Corsican Charcuterie represents 11 000 tonnes compared with the 1 000 tonnes locally produced.

 

Pigs

 

In spite of the German increase of the end of last week, there was no confirmation in the small increase in French prices seen last Thursday. The market remains good, due to a better demand of the third countries. With the start of October, in view domestic consumption should be better. At the same time, no change on the supply side which remains limited.

 

Piglets

 

The French market remains fluid and regular, with few exchanges. FNP-FNCBV prices continue to progress: +4 cents for 25 kg and +73 cents for 8 kg.

 

Cuts

 

While the end of the month approaches, sales are calm in France, especially since household freezers still contain cuts bought during promotions a few weeks ago. A recovery of the demand is expected soon.

   

Pork prices Rungis - Week commencing 24 September 2012
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0,85
Trimmings	1,85
Leg	2,56
Loin including chump	3,29
Loin excluding chump	2,99
Belly extra without trimmings	2,83

  

  

Germany

 

Market

 

The further price increase on the Hamburg market was widely accepted. Demand has remained stable and most available products are sold ok with meat for processing being marketed easiest. However, the high price level leads to smaller volumes being ordered. Profit margins are rather small. (Source: AMI)

 

Popular ham

 

Sales of Blackforest Ham continue on their stable upwards trend. In 2011, a total of 8.3 million hams were sold on the domestic market and abroad. Sales though retailers and discounters account for 85% of hams sold in Germany. (Source: Lebensmittel Praxis)

   

Pork prices Hamburg Market Week commencing 24 September 2012
Cut name	Price range (Euro/Kg)
Round cut leg	2,15/2,25
Leg (boneless, rindless max fat level 3mm	2,95/3,20
Boneless Shoulder	2,50/2,65
Picnic Shoulder	2,15/2,25
Collar	2,75/2,85
Belly (bone in, ex-breast)	2,30/2,45
Sheet Boned Belly (rindless)	2,25/2,45
Jowl	1,45/1,60
Half Pig Carcasses U class.	2,10/2,20

Netherlands

 

Final decision to shut down Broxburn site

 

Vion will close down its Broxburh site in Scotland. Some 1,700 staff will be affected. Already three months ago, Vion announced plans to close down the site because of poor economic performance over many years, and negotiations have not led to a satisfactory solution. The company rejected an offer from the Scottish Government to buy and lease back the facility. Potential cost savings of GBP 4 million were apparently not enough to save the company. It is no more than four years ago that Vion bought the Scottish meat company, and since then invested significant amounts in the plant. As recently as in September last year, Vion announced its plans to hire 250 new employees.  (Source: Landbrugsavisen)

      

        

Russia

 

Salmonella in imported pork

 

According to Rosselkhoznadzor, Salmonella was detected in pork originating from the Netherlands, Spain and the USA. Further, traces of Ractopamine were detected in the US pork. (Source: www.fsvps.ru)

 

Imported Pork Markets (September 25)
Moscow	St.Petersburg
Shoulder (no bone): USD 5.5/kg	Loin (with bone): USD 5.1/kg
Heart: USD 2.9/kg	Heart: USD 2.7/kg
(Source: Meatinfo.ru)

 

   

Spain

   

Pork prices Barcelona Market Week commencing 24 September 2012
Cut Name	Price range (Euro/Kg)
Gerona Loin Chops	1,703/1,709
Loin Eye Muscle	2,48/2,51
Spare Ribs	3,41/3,44
Fillets	2,88/2,91
Round Cut Legs	5,38/5,41
Cooked Ham	2,05/2,08
Rindless Picnic Shoulder	1,63/1,66
Belly	2,20/2,23
Smoked Belly with Spare Rib Section Cut off	2,63/2,66
Shoulder chap or Head Jowls	1,23/1,26
Back Fat, Rindless	1,08/1,11

   

  

Ukraine

  

More Brazilian pork

  

During the first 6 months of 2012, the import of pork from Brazil increased by 3.6 times summing up to 64,100 tonnes, this made Ukraine the biggest buyer of Brazilian pork. During the same period of time Russia imported 55,380 tonnes. (Source: ProAgro)

Production up

 

During January-August 2012, the production of fresh pork in Ukraine decreased by 7.2%  to 112,000 tonnes compared to the same period in 2011.The production of frozen pork decreased by 8.2% compared to January-August 2011 results and totalled 4,700 tonnes. (Source: PigUA.info)

  

Price increase expected

  

According to the forecast of Ivan Tomych, Head of the Union of Agricultural Cooperatives, the prices for pork on the Ukrainian domestic market may increase by 10-20% in the first six months of 2013 due to increasing costs for animal feed. The prices are expected to remain stable until 2013 since the producers have cheaper feed in stocks. (Source: PigUA.info)

  

  

US$1 = EUR0.78 (Oct. 2, 2012)