July 11, 2012

               

BPEX Export Bulletin - July 2012 (Week 27)

In the first quarter, EU exports continued their relentless progression (to the chagrin of many forecasters) with a rise of 12.5% to 672,800 tonnes made of 412,200 tonnes of pork and 260,600 tonnes of offal. Exports to Russia (28,300 tonnes), Belarus (24,600 tonnes) and the Ukraine (14,900 tonnes) are progressing well whilst exports to Mainland China (43,600 tonnes) have tripled in a year.

    

As expected, shipments to South Korea fell to 50,900 tonnes. Statistics reveal an interesting but unexplained rise in value of offal to Greater China with prices to Hong Kong up 45%. This does not tie up with the lower prices reported by traders, even taking into account currency movements. As discussed in bulletins passim, prospects are positive for the rest of the year with Chinese demand expected to pick up and the weak Euro giving European pork the edge against US and Canadian pork. Also, weak domestic demand will push export of European pork. In an interview to Porc Magazine, Vincent Chatellier of INRA agrees with the fundamental tenet of increased EU exports. However, he warns that the rise of world demand for pork will lead to higher soya prices.

    

The annual EBLEX Beef & Lamb Export Conference that took place on June 26 put Africa in focus with presentations on the Ghanaian and Angolan markets. Fast rising population, growing wealth due to petrol and other natural resources and a growing middle class mean that demand for protein will continue to outstrip production. The continent is expected to double its population from one to two billion over the next 30 years.

    

The British Embassy in Dublin is organising a Taste of Britain event during the Shop exhibition (26-27 September). Exporters interested to participate could contact Vicki Caplin at the Dublin Embassy: tdvdublin@fco.gov.uk

  

        

BELGIUM

   

China approval

      

Five Belgium pig abattoirs are now approved for export of pork to the Chinese mainland. The protocol was signed in 2009 and many missions have taken place since to secure this agreement. (Source: Boerderij Vandaag)

   

   

DENMARK

  

Market 

      

The European markets remain unchanged. There is a stable demand for legs and front parts and fine demand for backs, collars and tenderloins. Sales of trimmings and byproducts that accelerated during the fine weather at the beginning of June are now back to normal level. The British bacon market is stable. On third country markets there are fine orders to Russia, while China is slowing down due to large amounts of domestic slaughtering. The market in Japan remains stable. (Sources: Danish Crown, Tican, Danish Food Council).
          

Byproduct competition

           

The dog and cat food manufacturer, Arovit Petfood must compete with China on pig byproducts such as pig's trotters and ears. Increased exports of these products have caused prices to go up to the extent that for this year Arovit Petfood is expecting a deficit of €12 million. Prices for the commodities that Arovit Petfood manufactures as canned products have increased by 50%. (Source: Jyske Vestkysten).

              

2013 regulations

       

According to Agra Europe, EU commissioner Dalli expressed at a meeting of Ministers in the EU that the implementation of the new 2013 EU regulations on loose housing pregnant sows is going well. "The information we have indicate that all regulations will be observed by the end of the year", Dalli is quoted. However, other sources draw a less optimistic picture of the situation referring to the fact that countries such as Greece, Slovenia, Poland, Finland, Austria, Italy and Cyprus are expecting to be just part of the way to the goal by the end of the year, whereas Bulgaria and Ireland yet have a long way to go and are supposed to have no more than 40% of the farms changed to loose housing systems. The Commission is still missing data from Portugal and France on how far in the process they have got. According to Agra Europe the Commission once again has stated that no exemptions will be granted from the new regulations, and that all meat which comes from stables that do not meet the new regulations prospectively will be considered illegal meat. (Source: Markedsnyt for Svinekoed)

         

Frost free drinking water at night

                 

Researchers of Aarhus University studied sows' drinking behaviour and circadian rhythms. The study shows that there is a significant increase in daily water consumption after farrowing, when milk production started. 70 to 75% of their daily water intake will take place between 8am and 8pm. The rest was consumed on an average of two visits to the drinker between 8pm and 8am regardless of the climatic conditions. According to current legislation outdoor sows must have access to frost free drinking water 24 hours a day. (Source: Landbrugsavisen)
 

Danish Slaughterhouses - payments week commencing July 2 2012
Slaughterhouses	Danish Crown and Tican
Slaughter pigs (70.0 - 86.9 kg)	Euro 1.506
Difference to last week	Unchanged
Sows (Above 129.9 kg)	Euro 0.970
Difference to last week	-0.053
Boars (Above 109.9 kg)	Euro 0.840
Difference to last week	-0.053

     

          

FRANCE

              

Energy savings

           

Although the cost of energy only represents 1.9% of total production cost on a pig production unit, these costs are increasing. Electricity is the first source of energy on a pig unit, then fuel (13%) and finally gas at only 3%). On a breeding-finishing unit, energy costs reach 983KWh per sow per year, split between heating and ventilation especially for the nursery and the post weaning units. A partnership between the union of groups of producers and EDF (French Electricity) is supporting the setting up of energy saving equipment for pig production sector. Three pieces of equipment are available: heat pumps (water/water or air/water), electronic devices for centralised ventilation and parts of engineering for feed manufacturing systems on farm. A heat pump placed in a unit of 200 sows, heating 56 nursery places and 1000 places of postweaning, would save 94000 KWh of electricity per year, corresponding to €6 600/year VAT excluded. The air/air pumps and the biomass boilers should extend the list of this type of equipment; producers are encouraged to contact their producers' group in order to find out a bit more.
          

Cooperl the meat retailer     

             

One year after the purchase of Defi Viande (€50 million turnover with 500 employees) and their 83 butcher shops located in city centres, Cooperl is aiming at extending its retailing activity and setting up a new network called Aurélien (butchers' Patron Saint). This decision coincides with the purchase of the Kerguelen site which should be dedicated to processed products some of them being tested in the following butcher shops: 51 Maxiviandes, 17 Marc Munier, 12 Chevy, two Nivernaise des Viandes and one Prairies de France. Cooperl ended the last financial year with eight million net result most of it coming from other activities but fresh meat: animal feed, dry charcuterie manufacturing and environmental activities.
           

Pigs

            

On Monday July 2, in Plérin, 56 TMP price lost 1.9 cent and this, in spite of a consistently limited offer. The"Marché du porc Breton" considers that this slowing down is only temporary and that the firmness will soon make its return. For the breeders, the price of €1.50 is a minimum to cover production costs, as is underlined by "Marché du porc Breton."
             

Piglets 

            

Opinions remain divided. If the market is considered very fluid in the East half of France, it is not good in Brittany. France Agrimer thinks orders are not sufficient, recognising that the market for 25kg is better. Sales are regular and prices stable at a good level for this time of the year. To be noted that due to the rising for prices in charcuterie pigs last week there is an increase in the FNP-FNCBV indices (increase of three cents for 25kg & 54 cents for 8kg).
  

GERMANY

                

The supply of pigs for slaughter is typical for the time of year but demand is subdued. The trade with pig meat is sluggish too as demand on the domestic market is very limited. Exports to third countries remain difficult with exports of bellies to South Korea and sales to China declining. (Source: AMI)

       

Sustainability efforts

              

To keep up with its competitor REWE who has implemented sustainability measures a few years ago, EDEKA will co-operate with the WWF with regards to sustainably produced soy. The aim is to reduce the impact of soy production on the environment and to approach soy production more responsibly. Pigs, cattle, poultry and farmed fish produced for EDEKA own brand products will in the future be fed using either domestically produced feed stuff or feed containing only non GM, sustainably produced soy. While there is no internationally recognised label for sustainable soy production yet, EDEKA will be using non GM soy that is certified according to RTRS and GVO or Proterra (Basel criteria) standards. Further, EDEKA aims to record and reduce its CO2 emissions. For selected own brand products, CO2 and water footprints will be established. (Source: ISN, iq-agrar)
                   

Following a €25 million investment in the reconstruction and expansions of its central butchery, REWE Dortmund will produce its sausage products to be free from gluten, glutamate and lactose. The company aims to differentiate itself from the competition and mainly discount supermarkets by offering high quality meat and sausage products. According to REWE board member Rudolf Helgers, meat and sausage products are the main reason for customers to choose REWE over the competition. The central butchery had been destroyed in a fire in 2009. (Source: Lebensmittel Praxis)
      

Pork prices Hamburg Market Week commencing July 2 2012
Cut name	Price range (Euro/Kg)
Round cut leg	2,10/2,25
Leg (boneless, rindless max fat level 3mm	2,90/3,10
Boneless Shoulder	2,35/2,50
Picnic Shoulder	1,95/2,10
Collar	2,65/2,80
Belly (bone in, ex-breast)	2,15/2,30
Sheet Boned Belly (rindless)	1,90/2,35
Jowl	1,40/1,50
Half Pig Carcasses U class.	2,05/2,15
(Source: AMI)

    

    

THE NETHERLANDS

           
Pig farmers' have improved their health management
               
The Dutch residue control authority SDA has unveiled its 2011 results. Too many antibiotics are still used in the 2,125 Dutch veal farms surveyed. In contrast, pig units have a much better record. Out of the survey of 2,528 breeding farms and 5,531 growing farms, only a few exceed the statutory limits. The Dutch Government has pledged to reduce antibiotics use by 70% by 2015. (Source: Boerderij Vandaag)

RUSSIA

            

Antibiotics issue

              

Rosselkhoznadzor banned the import of pork from an enterprise in the USA due to the detection of antibiotics of Tetracycline group in it. The name of the company is unknown, only its number was made public – 18079. Tetracycline antibiotics were also found in a Canadian consignment. (Source: lenta.ru)

             

More Canadian pork

                

The cumulative volume of meat food products imported to Russia during January-May 2012 reached 855,000 tonnes (2% more than last year). 29% of the volume or 249,000 tonnes is chilled and frozen pork. The main exporters of pork to Russia during the indicated period were Canada (23% of total volume), Brazil (15%) and Germany (13%). (Source: Furazh Online)
                

           

SPAIN

                 

The largest processors grow fastest

                 

Vall Companys, the largest Spanish abattoir group increased its production by 18.7% in 2011 to 265,900 tonnes, or a market share of 7.6%. The second largest Batallé-Juiá increased its production by 7.1% to 202,500 tonnes (5.6%) and the third largest, Jorge SA (Samper) increased by 17.4% to 178,700 tonnes (5.1%). The top ten which also include El Pozo, Costa Brava, Famadesa, Incarlopsa, Sola, Terfrisa and Toni Josep, increased their production by 9.8% giving them a share of 40.5%, which admittedly shows that Spanish processing remains less concentrated that in other EU countries. (Source: Alimarket)
   

Jamones Salamanca for sale

   

The Iberian specialist and owner of the Valturra brand have put its farm, abattoir and drying plant for sale. The plant has a (over) capacity of 4,000 Iberian pigs per day and the secadero can hold 800,000 – 1,000,000 hams. This is a fair reflection of the difficulty of the sector. (Source: Alimarket)

           

Overseas expansion

                 

The Spanish processor Cárnicas Bravo who owns 50% of the Cuban company Cárnicas Bravo is stepping up its involvement with transfer of technology. Cárnicas Bravo has an 11,000 square metres plant and employs 128 people for a turnover of £20 million. Meanwhile, processor Redundo Iglesia is investing €8 million in a new plant in Canada to access the US and Mexican markets. Spanish processors have invested heavily in the past in America, particularly Argentina. (Source: Alimarket)
           

             

UKRAINE

                

Danish pigs for Slobozhansky 

           

Agricultural complex Slobozhansky, located in Kharkivska oblast, obtained permission from the State Veterinary and Phytosanitary Service of Ukraine to import 5,000 breeding pigs from Denmark. The first consignment of pigs will arrive in July 2012. (Source: PigUa.info)
               

Market

            

USA

                      

Pork production up in May
               
Pork production rose 9% in May to 9.28 million heads, setting a new national record. However, the rise is subdued as the outlook is fairly sombre. Renewed drought in the South should lead to increases of corn and soya prices, thus leading to a new period of losses in 2013. (Sources: USDA, various)

 

   

VIETNAM

                

EU negotiations
                  
The EU has started negotiations for a Free Trade Agreement with Vietnam that will include pork. In a separate development, the European Commission is tackling trade issues with Vietnam through the World Trade Organisation. Despite fast rising pork production, Vietnam cannot produce enough pork due to poor pig health and productivity and could become a major market for EU pork.

    

   

US$1 = EUR0.82 (July 11, 2012)