June 5, 2012

 

BPEX Export Bulletin - May/June 2012 (Week 22)

 

 

Despite the difficulties at entry, European pork exports to China rose to 116,000 tonnes in the first quarter, an increase of 111% as compared to the same period in 2011. Altogether, EU pork exports are up 9% on-year to 794,000 tonnes in Q1, providing yet another snub to the many doomsayers who predicted a sharp fall this year. In a separate development, Chinese television was in Yorkshire this week filming the preparations for the export of British pork.

 

As expected, USDA has revised its 2012 forecasts for EU pork exports upwards to 2.13 million tonnes still down 3% on last year. Global pork exports should rise to 6.99 million tonnes. The weaker Euro is giving EU exports a strong advantage against US and Brazilian pork. Still, US exports should reach a record 2.40 million tonnes. Chinese pork imports at 695,000 tonnes are also revised up but will be down on 2011. Canadian shipments are pegged at 1.18 million tonnes, Brazilian at 675,000 tonnes and Chilean at 145,000 tonnes.

 

See below major scandal in Chile.

DENMARK

 

Market

 

The heat wave in Northern Europe provides a better atmosphere on the markets. Legs and front parts are traded at unchanged prices, but the pressure on prices is relieved. Loins and bellies are selling well and are supported by strong exports to third countries, which limit the supply to Europe. Collars are sold well here in the barbecue season, while byproducts remain unchanged. On the British bacon the situation is unchanged. On third country markets stable quantities are sold to China but rumours in the market of excess supply put a pressure on prices. In Japan, sales remain good, while the market in Russia is slowing down. (Sources: Danish Crown, Tican, Europa and Food Council)

  

Danish Slaughterhouses - payments week commencing 28 May 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 - 86.9 kg)	Euro 1.482	Euro 1.482
Difference to last week	0.027	0.027
Sows (Above 129.9 kg)	Euro 1.001	Euro 1.001
Difference to last week	Unchanged	Unchanged
Boars (Above 109.9 kg)	Euro 0.868	Euro 0.868
Difference to last week	Unchanged	Unchanged

FRANCE

       

Wake up call

     

According to a recent CGAAER report published by the French Ministry of Agriculture, the poultry and pig meat industry seem to have been asleep since 2002 and have lost their competitiveness. The environmental challenge will remain the main obstacle to development. New initiatives are necessary to define a strategy based on 4 axes: communication, modernisation, production development and re-structuring of the processing part of the industry.

     

Pregnant sows in groups

     

Following the European legislation, from January 1, 2013, pregnant sows will not be left alone and will have to be reared in groups. ONEP (national organization of pig producers) is requesting the postponement of the implementation of the new law, and FNP (National Pig Federation) is regretting that the French Ministry of Agriculture stopped its support in investment relating to improved practices.

     

Casualties

     

Costs of collection of dead pig bodies on farm covered by producers and monitored by "ATM Porc" will decrease from €0.18/pig to €0.16 from July 1, 2012. For processors the contribution to rendering will move from €20/tonne of product sold to distribution to €19/tonne. The total ATM + Inaporc contribution of processors (including the Inaporc levy of €4.00/tonne) will then amount to €23/tonne.

     

Pigs

     

Prices increased in almost all the states of the EU. The "Marché du porc Breton" considers that Chinese requirements should remain good for the medium term. So, with better export activity and a higher consumption in Europe and with measured offers in most of the EU, Plérin thinks that the prices should remain firm.

     

Piglets

     

The European Market is stable. As in France, prices are under a little more pressure than at the beginning of the year, with offers being more suited to the needs of the moment. Offers are very high for the season even if they are starting to slow down.

         

Pork prices RUNGIS week commencing 28 May 2012
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0,65
Trimmings	1,41
Leg	2,27
Loin including chump	2,97
Loin excluding chump	2,52
Belly extra without trimmings	2,72

        

        

GERMANY

     

The situation on the German market ranges from surplus in supply of pigs for slaughter in some areas of the country to shortage of pigs in other regions. This development is due to reduced activity on the bank holiday Monday. The pig meat trade on the domestic market has taken up speed and particularly filets and topsides are well demanded leading to regional shortages. Apparently, reduced quantities are imported from Denmark where slaughter numbers are down. Also barbecue products are marketed well. Regarding exports speculations are that Russia might resume imports of large quantities of fat and bacon articles which might be supported by the low Euro exchange rate compared to the US Dollar. Depending on the weather conditions in the near future satisfying sales are expected. (Source: AMI)

     

Feed prices causing concerns

     

Producers are increasingly concerned about continuously rising feed prices. Crops having suffered from frost or draught damages have led to cereal prices throughout Europe rocketing. Purchasing prices for feed wheat and barley have nearly reached €260/tonne which is about €80 more than at the beginning of the year and leads to meat and egg production becoming much more costly. Currently, costs for feed account for 60% of the total costs of fattening. At the same time, pig producers have to cope with a continuous reduction of pig prices. Despite the beginning of the barbecue season slaughterers are putting strong pressure on the producers demanding significant price drops. (Source: iq-agrar)

SPAIN

     

The Spanish pork sector      

     

New data shows that the Spanish pork sector was worth €4.8 billion at farm gate in 2011. There were 93,000 pig producers including 13,000 in extensive systems, mainly in Extremadura. Some 40.4% of the total output of 3.47 million tonnes is produced in Catalonia. Exports represent 1.36 million tonnes with 311,000 tonnes exports to Third Countries, an increase of 46%. (Source: Eurocarne)

     

Escorxador Frigorific de Osona (Esfosa) is investing €2 million in new chillers. The major Catalan abattoir that works uniquely with contract slaughter produced 238,000 tonnes of pork in its financial year, an increase of 0.3%, which means about three million pigs. The plant employs 178 staff and service charge amounts to €19.1 million for a net profit of €540,000. (Source: Alimarket)

     

Mafresa in receivership

     

Campofrio launches branded fresh pork

     

According to Nielsen, prepacked fresh meat sales are down 3% whilst processed meats sales are up 1.6%. Campofrio marketing department believes that there is place for branded pork and this will help reviving the offer. (Source: Alimarket)

     

The Guijuelo meat fair

     

The town in the Salamanca Province is hosting its 16th FIC meat fair from June 6-9. Some 100 brands of Iberian ham will be on display. The town is the undisputed capital of the Iberian pork sector with 300 companies involved locally. (Source: FIC)

        

Pork prices Barcelona Market Week commencing 28 May 2012
Cut Name	Price range (Euro/Kg)
Carcases (secondary grade)	1,759/1,765
Gerona Loin Chops	2,48/2,51
Loin Eye Muscle	3,41/3,44
Spare Ribs	2,88/2,91
Fillets	5,38/5,41
Round Cut Legs	2,42/2,45
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

          

         

ITALY

     

Peppe Zullo is a pig breeder from Puglia with a difference. He breeds the rare Cinta Senese and Nero della Daunia pigs outdoors and uses them as crosses. He then produces organic salami and dry-cured meats and serves them in his restaurant which is a blend of modern structure and a 1700 pavilion. He also produces wine, olive oil, fruits and various including rare types of herbs. Such restaurant also exists in other parts of Italy and Catalonia. See www.peppezullo.it (Source: Eurocarni)

NETHERLANDS

     

Orange and brown

     

Orange is for the Dutch football team participation to the European Cup. An extraordinary number of lines have been launched with an orange livery such as mini cooked sausages in a pot or salami snacks. Brown is for the barbecue season now in full swing. (Source: Lidl, various)

RUSSIA

     

     

Imported Pork Moscow Market (May 28):	Imported Pork St. Petersburg Market (May 28):
Leg (no bone): USD 5.45/kg	Shoulder (no bone): US$5.00/kg
Heart: USD 2.9/kg (Source, Meatinfo.ru)	Half carcasses (Brazil): US$4.15/kg
　	Liver: US$1.51/kg (Source, Meatinfo.ru)

        

        

UKRAINE

     

Stable purchasing price

     

According to information provided by the Ministry of Agrarian Policy and Food of Ukraine, as of May 25, 2012, the average purchasing price for pork was UAH18, 160/tonne, about US$2,251/tonne; a 32% increase compared to the average price as of May 25, 2011. The wholesale market price was stable as well, and amounted to UAH31.34/kg (US$3.88/kg); a 16% increase from the same date last year. The retail market price decreased during the last month and amounted to UAH41.53/kg (US$5.15/kg). Purchasing prices for pork were the highest in Luganska Oblast and Kharkivska oblast (UAH20,000/tonne or US$2,480/tonne) and the lowest in Ivano-Frankivska oblast (UAH14,000/tonne or US$1,735/tonne). (Source, PigUA.info)

     

Pork imports in 2011 decreased 20.6%

     

In 2011, Ukrainian pork imports amounted to 86,208 tonnes (20.6% less than in 2011). The biggest exporter of pork to Ukraine in 2011 was Brazil with 39%, or 33,427 tonnes of total import. Exports from Germany accounted for 22%, or 18,655 tonnes. 20% or 17,403 tonnes of pork were imported from Poland. Pork exports from Ukraine were insignificant – 12,504 tonnes in 2011 (97.7% of the volume was exported to Russia; other importers are Moldova, Georgia and Vietnam). (Source: PigUA.info)

SWITZERLAND

     

Rising exports

     

Proviande, the Swiss meat board has been successful in spearheading the development of exports of premium processed pork products such as traditional salamis and dried meats alongside the well-known dry-cured beef (Bündnerfleisch – Viande des Grisons). So far, the main market has been Germany but Proviande is planning a large presence at SIAL in Paris in the autumn. Since 2009, sales have grown from nearly nothing to 2,261 tonnes. (Source: Fleischwirtschaft)

     

Small fall of pork consumption

     

Unlike beef, poultry and fish, pork consumption fell by 1.7% in 2011 to 24.9kg/person. Pork remains the main meat consumed in Switzerland with nearly 50% of total meat consumption. Self-sufficiency for all meat remains around 80% but little pork is imported, mostly for manufacturing. "Meat tourism" with Swiss citizen shopping for cheaper meat in border towns, remains rife. (Source: Flesichwirtschaft)

CHINA

     

Pressure on margins

          

High feed prices and prices down 15% on last year are taking their toll with producers. For example, Tianli Agritech a major pig producer group reports gross margins of 22.3% in the first quarter of 2012 against 41.7% in the first quarter of 2011 with a fall of net quarterly profit from £1.1 million to £0.5 million. The company also reports lower gilt sales as farmers forego purchasing replacements due to the pressure on margin. (Source: Agra Europe)

     

Decreasing pig meat prices expected in China

     

Rabobank's price forecast for Chinese pig meat reports of price falls of up to 20% this summer compared to last year. The result of the fall in prices combined with high costs would result in market exit of many small pig producers. Exit of small producers will not affect pig supply significantly, as many major producers at the same time expand their production, estimates Rabobank. Higher domestic production and falling prices could mean that China's imports of pork, which rose sharply in 2011, may decline as the year progresses, writes Agra Europe. Imports have also declined in the first quarter, and imports in March were 50% below imports in December 2011. (Source: Markedsnyt for Svinekoed) 

     

     

New low for pig slaughter

     

Some 683,000 pigs were slaughtered in the first quarter, 10% down on last year. Large numbers of pig farmers went out of business last year worth 10,000 sows. Producers blame excessive regulations that impede them competing against imports. This fall is putting pressure on processors, with the main player HK Scan reporting a loss (see bulletins passim). Meanwhile, imports are up 8% to 13,100 for January and February with Denmark providing 40% of the pork and Germany 36%. (Source: Agra Europe)

USA

     

Difficult year for pig producers

     

Chris Hurt, economist at Purdue University expects US pig producers to remain in the red for the rest of 2012 despite the easing of feed prices with losses of US$5/pig in the first half and US$3-4/pig in the second half. Meanwhile, internal demand and exports are flat but frozen stocks are near record-high. (Source: various)

     

Iowa success     

 

The State with the largest pig production in the country is going from strength to strength. For instance, in 1970, it produced 24.3% of all US pigs and this rose to 30.3% in 2011 with 1.03 million sows and 18.6 million growing pigs. North Carolina and Minnesota come distant second and third with respectively 13.1 and 11.9% of production. Iowa benefits from a competitive pork chain including feed mills and a dense network of 14 abattoirs, including some of the main players Cargill, Tyson, JBS and Farmland with a capacity of 112,000 pigs per day. The State imported 20.8 million weaners mainly from Canada and neighbouring states in 2010. Production is increasingly concentrated and located mainly in the North Eastern counties. (Source: Fleischwirtschaft)

Brazil

     

Aurora reopens abattoir

               

Coopercentral Aurora Alimentos reopened the Joaçaba abattoir which closed in 2009 as a result to the financial crisis. Some R$40 million has been invested to double capacity to 2,200 pigs per day and the meat is destined for export markets. (Source: Brazilian Meat Monitor)

Chile

     

Major scandal for the Chilean pork sector

     

The giant Agrosuper pig enterprise with 500,000 pigs had serious technical deficiencies that created a major stench which engulfed the local town of Freirina in Atacama region in Northern Chile which counts 6,000 inhabitants. The scarce local water resources were also polluted. The local population took the law in its own hands in a violent protest and wrecked the installations and the abattoir. The pigs were left without water and food for three days last week and their sheer number made it impossible to move them. The Government declared a health emergency and ordered the closure of the plant. Sows will now be culled and 3,000 pigs per day are now transferred to another plant. Agrosuper, a major pig and poultry concern, was granted a permit in 2006 to build this farm at the edge of the Atacama Desert. The farm was held as a model for pig farming, but one that failed badly. Another similar project exists in the region that may now be reconsidered (Source: Mercopress, our comment)

The Philippines

      

Imports blamed again

        

Producer's organisations are blaming imports for the 20% fall in two years in backyard pig farming. The number of backyard pigs has fallen from 9.78 million to 7.8 million heads between 2009 and 2012. We say that 114,000 tonnes of the 169,000 tonnes imports were offal with a 5% tariff. Thus, most of the remaining 55,000 tonnes would be imported under the Minimum Access Volume quota agreed under WTO. (Source: Asian Pork, our comments)

Australia

      

Domestic and international demand increases pig production in Australia

        

The Australian Minister for Agriculture, Joe Ludwig expects growth in the domestic pig production due to increase in both domestic and foreign demand over the next five years. It is expected that per capita meat consumption in the country will rise. Also, Mr. Ludwig expresses expects pork exports in 2016-17 to reach a level of approximately 36,000 tonnes per year. (Source: Markedsnyt for Svinekoed)

     

     

US$1 = EUR0.80 (Jun 5, 2012)