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BPEX Export Bulletin - February 2011: Week 5

by 5m Editor
8 February 2011, at 12:00am

The British Pig Executive's (BPEX) Export Bulletin for February 2011 reports pig industry trends from around the world. The EU's recent Private Storage Scheme appears to have been a success in halting the fall in pig meat prices.

The Private Storage Scheme seems to have put a floor on pork prices. With world markets buoyant, it is clear that the bulk of the pork frozen for storage will be sold to third countries. According to Defra, the European Commission has not yet set a timeframe for the intervention period, preferring instead to keep an eye on market movements.

Denmark

Market

Still, there is some uncertainty on the markets in Europe. The consequences of the dioxin scandal and the closing for exports from Germany to Russia result in lower prices. On the other hand and in the short term, the support for private storage will result in increasing prices. The net result is large price differences on the various markets. The general picture is that prices of legs are stable. Prices of collars, loins and sirloins remain unchanged. Prices of shoulders and front parts are increasing, and it leads to increasing prices of trimmings as well. The Russian market develops positively, and it is buying fine quantities at good prices. The market in Japan remains unchanged. After a couple of years of standstill, the market in Korea has revived very strongly, largely due to the foot and mouth disease in the country, which has reduced the local production, thus impacting fine prices.
(Sources, Danish Crown, Tican, Danish Agriculture & Food Council)

Russian ban on pork from Germany of no benefit to Danish Crown

Even if Russia is an important market for Danish Crown, the company is not going to benefit from the fact that German pork has been banned, evaluates Anne Villemoes, communication manager of Danish Crown. Germany has reacted expediently on the scandal and, therefore, she expects that the export from Germany will be back to normal quite soon. Accordingly there will be small fluctuations in relation to Danish Crown’s access to the market because there will be a slight delay in exports from Germany to Russia. However, it will not be very significant, she says.
(Source, Landbrugsavisen)

Danish exports of piglets have started up again

Danish pig producers export approximately eight million pigs annually. Many of them leave the country as piglets and end up in Germany. During recent weeks, the demand has been down at rock bottom due to the dioxin scandal in Germany. Had the situation lasted much longer, many Danish pig producers would have a serious problem; full pig houses and nowhere to bring the pigs. Holger Sorensen, Porc-Ex, expects that exports will be back to normal this week. The German customers have started buying Danish piglets again and they are back at full strength. They see an opportunity for having their stables filled up with cheap piglets, says Mr Sorensen. He continues that prices still are very low and far below production costs. Porc-Ex is expecting that the piglet quote will increase as of this week.
(Source, Landbrugsavisen)

Danish slaughterhouses do not focus sufficiently on male pig production

Belgium, and in particular Germany, focus still more on producing male pigs. But in Denmark, this is not even discussed. Farming consultant of LandboSyd, Jacob Dall, is wondering why. There are obvious advantages with male pigs, he says. He mentions a lower consumption of feed and a higher meat percentage with male pigs than gilts. And the sow farmers avoid having to castrate weaners and give pain treatment is this connection. Ironically, Germany in the 1990’ies made Denmark stop producing male pig product. But for instance, the German slaughterhouse, Tönnies, has not received any negative reactions from consumers. However, Danish Crown has no plans of slaughtering more than the present 5,000 male pigs weekly.
(Source, Landbrugsmagasinet)

Danish Slaughterhouses - payments week commencing 31 January 2011
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.200
+0.027
Euro 1.200
+0.027
Sows (Above 129.9 kg)
Difference to last week
Euro 0,693
+0.093
Euro 0,693
+0.093
Boars (Above 109.9 kg)
Difference to last week
Euro 0.560
+0.093
Euro 0.560
+0.093

France

Cecab taking control of Gad

The Brittany-based cooperative, Cecab, took over the family group, Gad, specialising in pig meat production. Cecab bought the 51 per cent shares owned by Loïc Gad, head of the company and son of the founder of the group: Louis Gad. The remaining 49 per cent belong to the Prestor group. With this deal, Cecab represents three million pigs and almost €2 billion and is becoming Number 3 in the Brittany pig meat industry behind Cooperl and Bigard. The new set-up is managed by Christophe Peters and since 2008, it gathers all pig processing sites of Cecab and Gad which comprises eight meat plants and 2,700 employees, processing 50,000 pigs per week.

Pigs

The quotation in Plérin us unchanged, however, an increase should arrive. Offers are going down due to the season while demand remains steady, especially at the beginning of month. The context is more positive on the European market. Breeders still denounce the gap between the price paid to the producer and that paid by the consumer.

Piglets

No big evolution for the market. Quotation FNB – FNCBV increased by 0.1 and 1.1 Euro cents last week, respectively, for 25-kg and post-weaning pigs.

Cuts

The market is very calm. The beginning of February was expected to could incite the consumers to buy more pork meat.

Pork prices RUNGIS week commencing 31 January 2011
Cut name Price range (Euro/Kg)
Back fat, rind-on 0.40
Trimmings 1.13
Leg 2.00
Loin including chump 2.75
Loin excluding chump 2.16
Belly extra without trimmings 1.76

Germany

Market

The private storage aid has stimulated both demand and capacities of the slaughter and deboning companies. On the domestic market, demand for pork meat has slightly increased, which is mainly due to nationwide retail promotions. Strongly demanded cuts are collars and loins as well as hams and bellies. Collars and loins are being frozen in anticipation of the festive season in spring and the barbecue season in summer.

Farmers Association opposed to private storage aid (PSA)

The Farmers Association of Lower Saxony has strongly criticized the introduction of private storage aid. The association’s spokesman, Tobias Göckeritz, said: “It is already bad enough that pork prices have plummeted by 36 Euro-cents per kilo slaughterweight between Christmas Eve and the middle of January. Until now, prices are only increasing very slowly.” Mr Göckeritz’s concern is that frozen pork products that private storehouse will release onto the market on time for the barbecue season will put pork prices under severe pressure again. “At the moment, the slaughter companies purchase the best meat at prices far below production costs. Private storage aid leads to the slaughter companies making profit twice – both times at the expense of the producers.” Mr Göckeritz stated.
(Source, topagrar)

Rather cheap than organic

Despite the recent dioxin scandal, German consumers do not seem to have an increased demand for organic food, a recent survey found. According to the study, only 21 per cent of the interviewees are in favour of a comprehensive conversion to organic food production. THree-quarters (76 per cent) stated that conventional farming should be more strongly supported in order to guarantee food prices at the lowest level possible.
(Source, afz)

Auto FOM by the middle of the year

Tönnies expects to introduce the AutoFOM system until the middle of the year. According to the company, the new system will set a signal for lower slaughter weights.
(Source, afz)

Slaughterers working according to German law

The French Meat and Retail Industry Association has filed a complaint to the European Commission claiming that the German meat industry does not comply with regulations regarding the equal treatment of temporary and permanent staff. This complaint has been met with incomprehension by the German Association of the Meat Industry (VDF). According to VDF Managing Director, Dr Heike Harstick, the working process in the German meat industry is undertaken according to the German labour and social law that applies equally to all economic sectors. According to Dr Harstick, a complaint to the European Commission therefore is incomprehensible. The European Commission in late January confirmed receipt of a paper from France that is currently being analysed.
(Source,afz)

Last five per cent

Vion plans to acquire the remaining five per cent shares of the A. Moksel AG through a so-called 'Squeeze-Out Procedure' that entitles majority shareholders to acquire the minority shares against payment of a cash consideration. Vion expects the action to be approved at the AG’s next annual general meeting. Although it could take up to one year for the process to be completed, it would eventually result in the ceasing of Moksel’s stock listing. According to Vion, there would be no impact on the AG’s business operation or staff. As early as in 2002, Vion (then operating under the name Bestmeat Company B.V.) had taken over the majority of stock with 50 per cent of the shares. By April 2003, Bestmeat already owned 85 per cent of the shares. Further acquisitions followed (Südfleisch, Artland, NFZ (Norddeutsche Fleischzentrale), Fleischzentrale Südwest, Hendrix Meat Group, Dumeco). Since 2005, the group trades under the name Vion Food Group.
(Source, topagrar)

Pork Prices Hamburg Market Week commencing 31 January 2011
Cut Name Price Range (€ / kg)
Round cut leg 2.05/2.20
Leg (boneless, rindless max fat level 3mm) 2.95/3.15
Boneless Shoulder 2.05/2.20
Picnic Shoulder 1.70/1.90
Collar 2.20/2.40
Belly (bone in, ex-breast) 1.70/1.95
Sheet Boned Belly (rindless) 1.65/1.90
Jowl 0.90/1.10
Half Pig Carcasses U class. 1.75/1.85

The Netherlands

Serious downward trend for weaners

Weaner prices have fallen bellow €20 as German demand plummeted and 50 to 60 per cent of the orders were cancelled. For memory, this is less than half the price reached in February 2010.
(Source, Agrarisch Dagblad).

Spain

Covap in the USA

Covap recently presented to the USA its Iberian Pork products during a promotional demonstration assisted by 30 Californian chefs. Covap expects revenues worth €1 million in 2011, €1.5 million in 2012 and €2 million in 2013 from their exports of meat, sausages and Iberian hams to the US.

ElPozo launches “Extratierna” (Extratenderness)

ElPozo Alimentación launches the range of guaranteed fresh meat ‘Extratierna’. The company claims: “The unique process of natural maturation and marinade gives more tenderness, juiceness and 60 per cent longer life to the meats.” The company says that with the current state of the Spanish meat market, brine-injected loins – already widely exported from Spain to countries like Italy and Portugal on the base of their low price but not yet sold on the Spanish market – will appeal to hard-pressed Spanish consumers.

Pork prices Barcelona Market Week Commencing 31 January 2011
Cut Name Price Range (€ / kg)
Carcases (secondary grade) 1480/1,436
Gerona Loin Chops 2,26/2,29
Loin Eye Muscle 3,25/3,28
Spare Ribs 2,61/2,64
Fillets 5,83/5,86
Round Cut Legs --/--
Cooked Ham --/--
Rindless Picnic Shoulder --/--
Belly 1,81/1,84
Smoked Belly with Spare Rib Section Cut off 2,24/2,27
Shoulder chap or Head Jowls 0,88/0,91
Back Fat, rindless 0,63/0,66

Russia

Authorities will assign additional grain to save livestock production

The government plans to increase the volume of grain that will be allocated to the regions from the Intervention Fund by two million tons. More than a half of the livestock farms are currently experiencing a shortage of feed grains and many enterprises are forced to slaughter their livestock. A sharp reduction in the number of animals could lead to problems in the future, as Russian breeders might not be able to satisfy the domestic demand for meat and milk for many years. The current year may be crucial for livestock production: farms are furnished with 10 per cent less feed grains than in 2010. Only 33 regions are provided with necessary volumes of feed grains.
(Source, Nezavisimaya gazeta)

Pork prices stable

According to the report of Centrosoyuz Russia, the wholesale price of pork in Russia currently remains stable due to the seasonal production increase of meat. As of 26 January 2011, the price of one kilo of pork in the wholesale sector totals $4.90. As of 28 December 2010, the price was $4.87 per kilo.
(Source, RIA novosti)

Pork Prices Saint-Petersburg (Russia) Market Week commencing 31 January 2011
Cut Name Price Range (€ / kg)
Leg (boneless) 4.23
Chuck (boneless) 4.95
Offal (heart) 1.71

Ukraine

Authorities to impose licensing of imports of bacon and pork

The Ministry of Economic Development and Trade of Ukraine appealed to the Cabinet of Ministers with the draft proposal for the inclusion of lard and pork to the list of import commodities that are subject to licensing in 2011. The explanatory note in the document states that in 2010 there was a continued reduction of the average cost of one ton of the imported meat products: frozen pork meat, offal, lard and animal fat.
(Source, VV News)

China

New GGP farm for Liu Ma

Liu Ma pig breeding, a division of Bejing-based Active Nutrition Group has opened its third nucleus farm in the Fanshang district of Bejing. This brings the total of nucleus sows to 2,400. The new farm is a joint collaboration with Waldo genetics from the USA.
(Source, Asian Pork)

Viet Nam

New one-million-pigs-per-year project

State enterprise, Dong Nai Food Industry Corporation (Dofico), has started building an integrated complex in the Xuang Koc district of the Dong Nai province. The investment worth US$100 million should be completed by 2013.
(Source, Asian Pork)

Austfeed expansion

The feed mill operation is opening a new 1,000-sow farm in Hung Yen province near Hanoi, which will be operational in 2012. The company has also applied for a licence to build a processing plant and is planning to open its second feed mill in Hung Yen.
(Source, Asian Pork)

VietStock

The November show was attended by a record 245 companies from 32 countries including the British Pig Association.

Thailand

Betagro to step up pork exports

The Betagro Group plans to double its exports to 10,000 tonnes in 2011. It is also planning to invest in India and is said to be in discussion with operators in Sri Lanka and (surprisingly) Bangladesh.

Canada

Maple Leaf closes second plant

Maple Leaf closed its further processing plant in British Columbia. Some 165 staff has been made redundant. This follows the closure of its Brunswick further processing plant in Nova Scotia last year. Clearly, the company is finding the going tough at the moment.

February 2011