December 3, 2012

                                                                                        

BPEX Export Bulletin-November 2012 (Week 47)

 

 

This week's export news

 

September UK pork exports, at 15,700 tonnes, were the highest for a long time. A further 5,100 tonnes of pig offal was also exported.

 

Important news: the major market of the Ukraine is now open with certificate 6481EHC available from Carlisle. Conditions are similar to those for China.

 

Higher feed prices and greater volatility were the main messages from Rabobank at the German National Meat Congress, organised by the main German meat paper AFZ. The combination of high fertiliser prices, low land availability and grain yield not keeping up with population growth means that high grain prices are here to stay. A memorable quote from Rabobank, "Processors are increasingly trapped between volatile supplies and consolidated customers."

 

 

France

 

French retailers' margins

 

Regular publications by the observatory of prices and margins show that all parts of the industry are capable of meeting together and discussing the market. Latest results published by the observatory show, for €100 turnover (ex VAT), a net margin of €5.10 for charcuterie products compared with €5.90 for poultry products and an "interesting" 1.9% for red meat products.

 

Auction sales in Ussel (Limousin)

 

The Ussel auction market, which opened in 2004, started selling pigs two years ago. The pigs come from specific regional supply chains: Limousin, Midi-Pyrénées and Aquitaine. Altogether, they represent between 300 to 500 pigs per week which are marketed directly to supermarkets. Today, this represents a turnover of €5 million and in mid-November, these pigs were selling at €2.00/kg. In Brittany, (cadran Breton) pigs were selling for €1.509/kg.

 

Heavier, leaner and better feed converters

 

According to IFIP, non-castrated pigs need three additional weeks to finish at an average weight of 134kg, compared with the traditional 116kg for standard castrated pigs. The ADWG is 0.968kg which is similar to that of castrated pigs. What is more interesting is the fact that non-castrated pigs consume less and have a 12% higher feeding index.

 

Market

 

Last Monday (Nov. 19) , in Plérin, the 56 TMP basic price fell by €0.011. This is due to slow demand on the meat market, as is often the case in the second half of the month.

 

The French market is stable. Price adjustments have taken place in the regions, according to current supply and demand. Despite the firmness of the market for pork butchers, the FNP-FNCBV prices lost €0.01 for 25kg piglets and €0.22 post-weaning.

 

The third week of the month (Nov.19 week) is never particularly good for business, especially when it follows a week of in-store promotions. In this context, market activity for fresh meat slows down and the week sees status quo for the price of cuts.

 

Denmark

 

'Residual payments' unchanged

 

Danish cooperatives, Tican and Danish Crown, have published their residual payments, the annual top-up payments to their members. Both co-operatives will pay €0.12/kg of pork. This year, Danish Crown reported a profit of €231 million compared with €235 million in the previous year, while turnover increased from €6.9 billion to €7.5 billion. Tican's turnover increased by 7% to €627 million and their net profit fell to €19 million from €34 million in the previous year. Processing companies, especially in the UK, find it difficult to pass on the higher commodity prices to consumers. (Sources: Danish Crown, Tican)

 

Finishers must be more efficient

 

The fear that production will move abroad leads Danish Crown, VSP and the local pig production consultants to offer three types of advice. The aim is to increase efficiency in Danish slaughter pig production. According to Danish Crown, analysis reveals that framework conditions in Denmark are €3.6 lower per produced finisher compared with conditions in Germany.  The situation is described as precarious and Danish Crown points out that politicians must improve framework conditions whereas the pig industry must focus on productivity. And this is where the three types of advice are relevant. (Sources: Danish Crown, Effektivt Landbrug)

 

Markets

 

Danish Slaughterhouses - payments week commencing 19 November 2012
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 – 86.9 kg)	Euro 1.587	Euro 1.587
Difference to last week	Unchanged	Unchanged
Sows (Above 129.9 kg)	Euro 1.185	Euro 1.185
Difference to last week	Unchanged	Unchanged
Boars (Above 109.9 kg)	Euro 1.015	Euro 1.015
Difference to last week	Unchanged	Unchanged

Germany

 

Farmers "confused"

 

The German market is expected to decline slightly next week (Nov. 26 week). Farmers, in particular, are very "confused" on the direction in which prices are heading. (Source: BPEX)

 

Price of course

 

At the meat congress, Kantar was categorical. The sharp increase of pork prices is the reason why German pork and sausage consumption is weak. Consumers are also trading down and hard discounters who also had to increase their prices are stalling. (Source: Kantar Worldpanel)

 

Export boom for Westfleisch

 

Westfleisch CEO, Dr Giesen, warns that pork exports are slowing, with volumes down 27% in September. This comes after a continued spate of growth. Exports now account for 40% of Westflesich turnover, with Russia representing 43.7% of export sales, equal to China. (Source: Westfleisch)

Netherlands

 

Fewer antibiotics administered to pigs

 

A new report from research institute, LEI, proudly claims that antibiotics usage has fallen by 60% in intensive livestock sectors: pork, poultry, veal and dairy, over the last three years. For pork, the reduction is even more, marked at 62%. (Source: Boerderij Vandaag)

 

Vion: "Malaise"

 

This story made the front page of the main Dutch farming paper before the UK announcement. The ZLTO cooperative, which has €738 million invested in the group, is badly affected. (Source: Boerderij Vandaag)

 

New PRRS research project

 

Meat board PVV is investing €200,000 in a four-year project to assess the effect of the PRRS disease in pig farming. The project is supported by pig farmers' organisation, NVV and research institute, LTO. (Source: Boerderij Vandaag)

 

 

Portugal

 

Pork success

 

Data from Kantar World Panel available to BPEX shows increased penetration for pork in Portugal, rising from 82.8% in 2011 to 87.2% in 2012. Penetration does not vary much according to the region or the socio-demographic profile. However, large families with older children eat more pork. Despite higher prices, volumes (product weight) in the year ended September have grown from 52,000 tonnes in 2011 to 59,000 tonnes in 2012. Frequency of purchase has increased from 7.6 to 8.0 in the same period. (Source: BPEX)

 

Supermarkets gain market share

 

The market share for fresh pork of Sonae - Continente rose from 22.0% to 23.7% between 2011 and 2012 and from 14.6 to 16.6% for Pingo Doce - Jerónimo Martins (year to end of September). Other retailers include Intermarché (14.5%, falling), Lidl (4.2%, falling), Auchan (4.2%, growing), Minipreço (3.1%, stable) and Leclerc (1.6%, growing). Traditional retailers now only account for 32.1% of fresh pork sales, a sharp decline due to the never-ending price wars between Portuguese supermarkets. (Source: BPEX)

 

 

Spain

 

Processors in the dock

 

The Spanish Competition Commission has fined the Spanish Meat Processors' Association, ANICE, and the Catalan Meat Processors, FECIC, €31,500 for organising by-product disposal charges from abattoirs to farmers. This move was denounced by Spanish producers' organisations. (Source: Eurocarne)

 

Pork in Aragon

 

The pork sector is a major industry in this large but low-populated region. It provides 10,000 jobs and represents 34% of farming output compared with 11.4% as the national average. (Source: Eurocarne)

Greece

 

Residues again

 

Once again, Greece has been shown to have the highest antibiotic residues in pork within the European Union, according to the latest report. In the past four years, there has been a significantly increasing trend of combined resistance to multiple antibiotics in both Klebsiella pneumoniae and Escehrichia coli in more than one-third of EU/EEA countries. (Source: AFSA)

 

 

China

 

Where will it end?

 

In 1990, some 22 million tonnes were produced in China; in 2000, this had grown to 39 million tonnes, and in 2010, production reached 52 million tonnes. According to analysts, the conversion from backyard to industrial production is taking place at a faster rate than expected with the new industrial capacity outstripping the loss of production from small farmers leaving the land. (Source: Rabobank)

 

 

USA

 

Export marketing

 

The National Pork Board will spend US$7.7 million (£4.1 million) on export promotion in 2013 as well as US$27.7 million (£17.3 million) on home market promotion. US exports reached a record value of US$6.1 billion in 2011 for 2.2 million tonnes. (Source: National Pork Board)

 

 

Russia

 

ASF registered in Tverskaya oblast

 

According to Rosselkhoznadzor, a further case of ASF has been registered in Tverskaya oblast, Konakovskiy region.  As reported, outbreaks of ASF have been registered in Tverskaya oblast since May 2012. On 19 November, an outbreak was registered on a Zavidovo pig-breeding farm. (Source: ria.ru)

 

 

Ukraine

 

Increased pig population

 

As of November 1, the population of pigs totalled 8,085,300 head, an increase of 1.6% on-year. The population of pigs kept on farm increased by 4.1% to 3,641,400 head while 4,443,900 pigs were bred in private households.  (Source: PigUa.info)

 

 

Belarus

 

The Department of Veterinary and Food supervision, under the Ministry of Agriculture, has restricted the import of pork from the Tverskaya oblast region since November 9. This decision was made due to the spread of ASF in the region. The Department considered it necessary to restrict the import of live pigs, pork, including wild boars, processed meat, hides, raw intestines, hair, hunting trophies derived from animals susceptible to the disease, feed and feed additives made from raw materials from the Tver region. Equipment for keeping, slaughtering and butchering of pigs is also suspended. (Source: pigprogress.net)

 

  

US$1 = EUR0.77 (Dec. 3, 2012)