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BPEX Export Bulletin - June 2010

by 5m Editor
8 June 2010, at 12:00am

The British Pig Executive's (BPEX) Export Bulletin for June 2010 reports pig industry trends from around the world.

Denmark

Market

The markets in Europe continue developing positively. On the European market, fresh legs are sold at slightly increasing prices. Trimmings and shoulders for sausage production and loins are traded at increasing prices as well. Sales to the British bacon market are stable and it is expected that the price level will increase on the upcoming June contracts. Some slaughterhouses have now renewed their contracts into June with continuing increasing prices of bacon for the British market. Sales to Russia and Japan remain unchanged, but the ongoing strong US dollar lead to fine prices brought home by the Danish exporters. In China, the trend is increasing, also supported by the fine exchange rate of the dollar.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

Danish Crown slaughterhouse at Horsens is the most competitive

The Danish Crown slaughterhouse in Horsens is much discussed. But last week, when CEO, Kjeld Johannesen, welcomed the guests in connection with the anniversary celebrating the first five years of the slaughterhouse, he stated that the slaughterhouse simply is the most competitive plant of the group. He referred to the fact that even though the employees have negotiated higher wages throughout the years, the labour costs have decreased. Also, total costs have fallen in Horsens, he explained. The plant was scheduled to a slaughtering capacity of 77,000 pigs per week. Today, the capacity amounts to 94,000 pigs, Mr Johannesen explained.
(Source, Landbrugsavisen, Danish Crown)

New action plan on antibiotics and resistance

The Danish authorities have prepared a new plan of action to fight salmonella in pork or other. The background for the plan of action is that Denmark is facing challenges in the field of antibiotics. The consumption of antibiotics has increased, both for human use and also for livestock production. At the same time, complex problems with resistance, which previously first of all were seen in other countries, have started to appear in Denmark. The plan of action is aiming at ensuring that the Danes can maintain the effect of antibiotics in the treatment of humans. At the same time, it aims at ensuring that serious infections in livestock and domestic animals can go on being treated in the future.

The plan consists of:

  • a national intersectional council for antibiotics
  • new research projects focusing on cross-sectional contexts
  • improved surveillance of resistance
  • review of the reporting system for infectious diseases to humans
  • preparation of national guidelines for the use of antibiotics
  • improved counselling and incentive structure in livestock
  • ’Yellow card’ system in pig farms with a high consumption of antibiotics
  • increased focus on reports of resistance, and
  • increased focus on international cooperation

(Source, Landbrugsavisen)

A new trade agreement worries farmers

Closer ties to South America will put the already economically harassed farmers in the EU under even more pressure, say the farming organisations. The European agricultural organisations do not understand why it always is the farming sector that will be affected when EU implements trade agreements, particularly when several countries in South America, especially Argentina, wants new tariffs on food imports. During a summit meeting between EU politicians and South American leaders, it was decided that the EU and the South American trade bloc, Mercosur, should work closer together. It is especially the French Minister for Agriculture and the European farmers’ common organisation Posten, who are worried. Their view is that the EU producers must conform to strict requirements, which makes it expensive to manufacture goods. Mercosur countries will not at all have to meet the same standards. Here, (genetically modified) GM-products, poor working conditions and growth hormones are allowed contrary to the situation within the EU, informs COPA-COGECA. The organisation emphasises that the EU farmers now earn less than before the new millennium started and an economic pressure from South America may result in fewer farmers.
(Source, JyllandsPosten)

Danish Slaughterhouses - payments Week 22
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9 kg)
Difference to last week
€ 1.362
+ 0.040
>€ 1.362
+ 0.040
Sows (Above 129.9 kg)
Difference to last week
>€ 0.895
Unchanged
>€ 0.895
Unchanged
Boars (Above 109.9 kg)
Difference to last week
>€ 0.761
Unchanged
>€ 0.761
Unchanged

France

Pierrat

The project mentioned briefly in the previous weekly report is a model of development for a small charcuterie manufacturer. Started in 1982, this family owned company specialises in regional products: sausages, terrines, pâtés and smoked products from the Vosges region. The amount invested in the project is exactly the 2009 turnover of the company: €5.7 million. With 38 staff, the company supplies retailers (60 per cent of turnover), wholesalers (30 per cent) and butchers and restaurants (10 per cent). The new plant will be environmentally friendly, the production of positive cold is done with 150kg ammoniac and with heat-exchanging system, it also allows to produce hot water for the plant. Smoke produced to smoke the products is recycled and the site only rejects in the air five per cent of the smoke produced.

More collective breeding units

The specialisation of French production units increased strongly between 2001 and 2008. This is reflected by the development of collective breeding units: during this period, almost four breeders out of ten and three breeders-finishers out of ten have increased their number of sows by 20 per cent. Units with over 300 sows represent 23 per cent of pig farms in 2008 compared with 14 per cent in 2001. This evolution is the result of the setting up of collective breeding units in French pig farms.

Pigs

The basic price gained only 0.1 cents at Plérin. This tendency is due to the Bank holiday last week and the recent strikes. A rapid return to rising prices is not to be excluded and is awaited.

Piglets

The French market follows its seasonal tendency. Offers progress regularly, in particular in postweaning. If prices are mainly firm, a small slow-down is not to be excluded in the medium term.

Cuts

The beginning of the week was very calm but the sunnier weather should help the wholesalers. Exports could also be more regular, thanks to a parity euro/dollar which should be less penalising and a certain competitiveness of our products compared with the products of our neighbours.

Germany

Market

The main cuts ordered are loins, collars and hams. Due to the increased prices for pigs for slaughter (mid-April: €1.32 per kg – mid-May: 1.48 E-Classification) prices for cuts increased as well. Industrial and mid-sized companies complain about the insufficient margin in the meat business. Because of the ample supply of the meat market proceeds often belie expectations. Exports are doing quite well. Pig meat exports in March exceeded last year’s figures. However, total exports January to March 2010 declined by 2.6 per cent to 570.250 tons compared to the same time of year in 2009 because the long winter resulted in unsatisfying exports in January and February.
(Source, AMI)

Nölke expanding

The salami-specialist Heinrich Nölke GhmH & Co is investing €50 million in Versmold at its Menzefricke plant. The new factory will employ 180 additional staff and be in operation by 2012. The family-owned Nölke group owns three processing factories in Germany and one in Poland and employs 1,300 staff, 770 of whom are based in Versmold. It owns the Gutfried, Menzefricke, Müritzer and Velisco brands and generates a turnover of €254 million.

Weak April

The German retail industry has reported a considerable decline in turnover for the month of April. According to the Federal Statistical Office, Destatis, a decline by 3.1 per cent compared to last years figures was noted. The decline is explained by calendar-related effects such as a very early Easter.
(Source, Lebensmittel Praxis)


Development of numbers of pigs slaughtered in Germany

The Netherlands

Call for competitiveness

Dutch producers must compete on export and develop strong brands said Gerald Behrens of Boehringer Ingelheim at the European Pork Congress. He also states that the new animal welfare demands are not affecting the general Dutch public and rejects organic pork as a small niche market. “The general public buys an image,” he concludes.

Spain

Alimentaria 2010

The number of companies participating to the major bi-annual show Alimentaria, the third largest in the world after Anuga and SIAL peaked in 2008 with 4,806 including 430 meat companies attending Intercarn. In 2010, a little more than 4,000 companies participated including 340 meat companies, the great majority of which being pork processors. Meat still represents the second largest sector after wine. Total surface decreased from 122,000 square metres to 94,500 square metres, including 14,500 square metres for Intercarn down from 17,000 square metres. This is a clear indicator of Spanish economic retrenchment.

Russia

Talina Group (Mordovia) to triple pig population

The Head of Talina Group reported that the company is planning to introduce two new modern pig units for 100,000 pigs each in Ardatovskiy and Kovylinskiy districts. The up-to-date equipment should quadruple the efficiency of labour. Only 200 employees are needed to maintain one complex. In addition, Talina Group plans to build a large feed plant. The implementation of the business plan is scheduled for two years.

Kavkaz Co. to attract a US$800,000 loan for a pig breeding farm

Kavkaz farming enterprise (Agricultural holding Kuban’) aims to attract US $800,000 as a loan to launch a new pig breeding nucleus farm. The bigger part of the loan is going to be spent on purchasing of Duroc and Yorkshire purebreds. The remaining part of the loan should be spent on construction of disinfection facilities, cleaning and power systems. Currently, one pig complex is almost ready to go. Construction costs totalled more than $5 million. The breeding farm is equipped with Big Dutchman systems and plans to produce up to 5,000 piglets per year. Kuban’ is one of the largest farming businesses in southern Russia. The holding owns 11 farms, grain elevators, three seed plants, mills etc.

Danish investors to start a farm despite swine fever threat

Danish investors plan to launch a new farm in Krasnodarskiy Kray. Agro-industrial company Dan-Invest AS aims to spend $29 million to complete the construction of a new farm in Russia. The construction was resumed at the beginning of the year despite an unfavourable situation concerning swine fever outbreaks in southern Russia. According to the company, the first stage of the complex with an overall capacity of 60,000 pigs should be launched this autumn and full completion is expected for spring 2011. Experts forecast that the meat market is very close to be oversaturated and new projects may face stiff competition. Director General of Dan-Invest Ltd reports that one industrial building is already restored and three are under reconstruction. In total, 15 buildings are to be constructed. Around 1,100 sows should be delivered to this complex in October 2010 and 1,500 sows next year. The complex is designed to produce 60,000 pigs per year. The construction of the complex began in 2007. Later, loan agreement with Rosselkhozbank was approved. In 2009, the project was suspended but in 2010, the bank restored financing. The project is developing regardless swine fever outbreaks in the region. So far, Dan Invest does not have a permit to import the pigs but expects that all technical problems will be resolved just in time.

Ukraine

The lard capital of the world importing lard

Ukrainians are switching to imported lard as production of the latter domestically makes less and less economic sense. Both backyard farmers and large swine complexes are complaining about the situation. The problem is that butchers and slaughterhouses prefer imported pork and lard to Ukrainian-made products. The lard price in Ukraine dropped as it relates to the situation on the market of vegetable oil, butter and other fats. The production cost of one kg of live pig is around US$1.65 per kilo payable for live weight. The market is offering not much more than this thus forcing us to sell at cost. Interestingly, that import of lard into Ukraine jumped from 34,000 tons up to 47,000 tons per year, which is one-third of the country’s annual needs. Part of the reason is that Ukrainians still like lard but produce more meat breeds as Ukrainian pig population increased by 16 per cent as of April 2010. However, the buying power of Ukrainians dropped because of the economic crisis. During the first quarter of 2010 monthly sales of pork and lard dropped by 25 per cent. Should the government cut the subsidies, the pig industry may face collapse. IMF which is providing financing to Ukraine at the moment requires that farmers should not be subsidised in any way. Governmental officials believe that imported lard goes into sausages and locally produced lard is consumed by the population as is. Another interesting thing is that backyard farms that used to account for 50 per cent of the total Ukrainian pig population showed a decline from five million to four million head during the past three years. Experts believe, however, that in the nearest future pork and lard is not going to pose a deficit problem for Ukraine as large pig complexes compensate for the decline in small farms.

China

Singapore invest in China

Singapore Food Industries Pte is investing SG$16 million (£8 million) in Jiling Province with Dachan Foods with the clear aim of exporting pork, beef and various other products to Japan, Korea and Singapore in the future.

Taiwan

Consumer preference for pork

A comparison study of national preferences for pork shows than Taiwanese consumers prefer darker pork. Marbling comes a distant second in terms of factor of choice. Korean consumers are the only who clearly opt for marbled pork in this 23-country study, originated by Eric Dransfield who worked for many years at Bristol University (Meat Science).

Japan

FMD

Foot and mouth disease (FMD) keeps spreading in Japan. According to officials, cases of FMD have been confirmed on 201 agricultural enterprises, 128,000 pigs and 19,700 cattle have been infected. Further suspected cases are currently under examination.
(Source, Fleischwirtschaft)

Pork Prices Hamburg Market Week commencing 31 May 2010
Cut Name Price Range (€/kg)
Round cut leg 2.30/2.45
Leg (boneless, rindless max.fat. 3mm) 3.15/3.45
Boneless Shoulder 2.35/2.50
Picnic Shoulder 1.70/1.90
Collar 2.60/2.80
Belly (bone-in, ex-breast) 1.70/1.90
Sheet Boned Belly (rindless) 1.65/1.80
Jowl 1.05/1.20
Half Pig Carcasses 1.88/2.08


Pork prices Barcelona Market Week Commencing 31 May 2010
Cut Name Price Range (€/kg)
Carcases (secondary grade) 1.586/1.592
Gerona Loin Chops 2.33/2.36
Loin Eye Muscle 3.43/3.46
Spare Ribs 2.68/2.71
Fillets 5.68/5.71
Round Cut Legs 2.78/2.81
Cooked Ham 2.09/2.12
Rindless Picnic Shoulder 1.49/1.52
Belly 1.84/1.87
Smoked Belly with Spare Rib Section Cut off 2,27/2,30
Shoulder chap or Head Jowls 0.88/0.91
Back Fat, rindless 0.58/0.61

June 2010