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BPEX Export Bulletin - October 2010

by 5m Editor
19 October 2010, at 12:00am

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

The English Meat Dinner now branded ‘St George Dinner’ took place again at the Grand Hotel in Paris on 18 October during SIAL.

Market rationale is prevailing with the grain bulls in retreat on the future markets. A strong rebound of production is expected in 2011 and with stocks now at 183 million tonnes and demand depressed, this can only mean a downward trend for wheat prices. Egypt has cancelled some US orders for 2011-12 delivery signalling and acknowledging an overreaction to the August-September spike. There may be also a resumption of shipments on a limited basis from the Black Sea at the end of the year. The soya market has been affected by the auctioning of large volumes of Chinese domestic vegetable oil stocks.

Olivier de Scutter UN’s Special Rapporteur has no hesitation in blaming the influence of speculators in a new report. In particular, he points out to the “massive growth in financial instruments linked to food commodities”. A Lehman Brothers study shows a growth of 1,900 per cent of index fund speculation between 2003 and March 2009 whilst according to Morgan Stanley, the number of outstanding maize future contracts has increased from 500,000 in 2003 to 2.5 million in 2008.

Forecasts by Fapri, the research organisation, OECD-FAO and USDA all point to an increase of world pork trade in the range of 12 to 27 per cent by 2019. They should ease off slightly from 2013. On the trade and production side, the main change will be the continued growth of pork production in Russia. However, by 2019, Russia will not still be self-sufficient.

Denmark

Market

The European markets for pork are fairly stable. The strong pressure on prices continues but it is estimated that the present price level can be maintained. Prices of fresh legs remain unchanged. Other cuts are sold at unchanged prices as well. Exports of bacon products to the British markets are satisfactory. Exports to third countries remain unchanged. In general, prices brought home to the Danish slaughterhouses are affected by the lower exchange rate of the US dollar and the GB pound.
(Sources, Danish Crown, Tican, Danish Agriculture & Food Council)

Danish pigs are doing well in German and Dutch pig stocks

Danish pigs are in high demand abroad. And they are because of their good health and their ability to resist diseases. The health situation in the Danish stocks is well managed informs Peder Jensen, who is manager of Danish German Agricultural Advisory Service, DTL, at Padborg. Representatives of DTL often visit the German and the Dutch herds where many pigs are imported from Denmark. It often occurs that while the German pigs must be treated with antibiotics the Danish pigs in the same herd walk around healthy and sound, he says. Therefore, he is surprised of the current debate on antibiotics and pig production. In Germany the farmers use three or four times more antibiotics per pig than in Denmark and in Holland farmers use even eight or 10 times more, according to Peder Jensen.
(Source, DR)

Meat exports less important for Danish exports

Exports of meat and meat products (exclusive of live animals) are of less importance to the total Danish exports. In 2009, the percentage was 5.5. It is a very strong drop from 1988 where meat and meat products represented 9.8 per cent. The figures appear in an analysis from the Danish Exports Council. The development is not very good news for the total Danish export. There is much value added in the last part of the process. And so in a way, it is shameful that the slaughterings move out of Denmark but the competition and the lacking environmental approvals made it very difficult to develop the pig production in Denmark, explains Nikolaj Noergaard, manager of Science Centre for Pig Production. However, he points out that the growth in exports of live pigs has decreased during 2010, partly because the Danish slaughterhouses have succeeded in being better at matching the German settling prices for pigs for slaughter. Chief economist of Danish Export Council, Jacob Warburg dare not predict if in the future meat and meat products will be of still less importance for Danish exports. At present, Denmark is among the best in the world to produce and process meat. Several slaughterhouses have been closed down and the ones that are left are more efficient and are better shaped for keeping market shares. However should the meat production go on being highly man power intensive others will be able to do it at lower costs, evaluates Jacob Warburg. Still, meat is one of the largest groups of goods in Danish exports. In 2009, meat exports had a value of €3.6 billion.
(Source, JyllandsPosten)

Danish Slaughterhouses - payments Week 41
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.229
Unchanged
Euro 1.229
Unchanged
Sows (Above 129.9 kg)
Difference to last week
Euro 0,900
Unchanged
Euro 0.900
Unchanged
Boars (Above 109.9 kg)
Difference to last week
Euro 0.828
Unchanged
Euro 0.828
Unchanged

France

IFIP views

Feed prices are expected to rise this autumn when pig prices are not increasing, which puts producers in great difficulties. According to IFIF (Pig meat Institute), the strong increase in prices of cereals makes pig feed €17 per tonne more expensive, and this is just the beginning. Professionals expect further increases and a repercussion of this increase down the supply chain, not in per cent but in cents in order to avoid an increasing inflation of price paid by consumers. In the longer term, IFIP conducted a comparative study about competitiveness in three major production ‘regions’: Brazil, US and Brittany. This study concludes that the US and Brazil have a clear advantage in terms of local accessibility to raw material needed to produce feed for pigs. But, although there is a risk that environmental pressure could increase in Europe and that simultaneously Brazil could solve its logistics issues, it appears that the price gap between Brittany's pig producers and their competitors is shrinking, thanks to an improved utilisation of co-products in Brittany.

Help!

So far, the French administration has not shown any sign of flexibility regarding the implementation of the new rules for pregnant sows. The deadline is 1 January 2013 and so far there are still 3,500 farms representing 750,000 sows, which have not started changing their equipment. The French state should double its support shortly, an envelope of €8.5 million designed to cover 20 per cent of expenses committed within a limit of €30,000 per farm. Here and there, regional funds could complete this support.

Pigs

Offers and demands from abattoirs are expected to be stable these next few days. Social movements in France could limit more seriously slaughtering and offers should be slowing down.

Piglets

The French market is stable. The demand is measured for sufficient but not excessive offers. Prices remain stable for 25kg and post weaning.

Cuts

Many wholesalers consider that the market is correct for the season, the others note that the market is slowing down. Sales are regular but not very good. No evolution for prices.

Pork prices RUNGIS week commencing 11 October 2010
Cut name Price range (Euro/Kg)
Back fat, rind-on 0.40
Trimmings 1.23
Leg 1.99
Loin including chump 2.78
Loin excluding chump 2.17
Belly extra without trimmings 2.19

Germany

Market

There is a two-parted development on the pork market. About half of the marketers report about decreasing profits due to the autumn holidays. However, the other half seems to be satisfied with acceptable profits reporting no negative impact of the holiday season. Overall, the market seems to have slowed down. Sales of cuts show slight weaknesses mainly affecting hams, chops and collars.

New study of German competitiveness

Wilhelm Uffelmann has published a complete review of the competitiveness of the German meat sector. Although this review mainly includes published sources, it provides interesting insights for the processing sector. According to the author, cost savings of 35 per cent are possible with pig slaughter mostly through economy of scale. For cutting and further processing, the potential savings are in the order of 13 per cent. German pork processing is already the most competitive in Europe and comparisons are made with the Netherlands and Denmark. However, small- and medium-size companies are seeing their cost base rise.

No more shrinking pork chops...

... - that’s what the Bavarian Institute of Agricultural (LfL) is hoping to achieve. According to the German association of pig production (ZDS), the LfL has developed a method to determine loss of meat juice in self-service trays. A pork chop of 2cm thickness is packed in a self-service tray and put in the fridge for 48 hours. At weighing after 48 hours, the loss of meat juice can be determined. More than 3,500 pig carcasses have been tested according to this method. The calculated factors for heredity will now allow for a breeding approach to the issue.
(Source, proteinmarkt, afz)

Good Christmas business expected

The German retail industry forecasts ringing cash tills this Christmas. According to Ernst & Young, almost every second retailer is expecting higher profits compared to 2009. Only three per cent of those polled expect lower profits.
(Source, LZ)

Pork Prices Hamburg Market Week commencing 11 October 2010
Cut Name Closest Export Manual Code No. Price Range
(€ / kg)
Round cut leg 51121 2.05/2.25
Leg (boneless, rindless max fat level 3mm) 51121 3.00/3.15
Boneless Shoulder 56200 2.35/2.50
Picnic Shoulder 56120 1.80/1.95
Collar 56130 1.80/2.10
Belly (bone in, ex-breast) 55100 1.80/1.90
Sheet Boned Belly (rindless) 55210 1.80/1.95
Jowl 50230 0.95/1.15
Half Pig Carcasses U Classification 1.79/1.94

The Netherlands

Farm visits

Faced with vociferous animal welfare lobby groups, Dutch pig farms are opening their doors to the public one weekend per year. This year a record 12,750 people visited the 22 pig farms open to the public.

Spain

Strong fall in the number of pig farms in Murcia

A total of 184 pig farms were closed this year according to the Register of Operations (RREP), mostly in the towns of Puerto Lumbreras, with 122 casualties, Mazarrón and Cartagena.

Cárnicas Serrano modernises concept of Easter Sausage to de-season its consumption

Cárnicas Serrano has launched into the market a new packaging format and concept for the Easter Sausage with the aim of modernising the format of the traditional product of Valencia and to spread consumption of the product all year round and to expand its geographical coverage to other Spanish Regions. Currently, about 60 per cent of the Easter Sausage sales are concentrated during the month of Easter.

Pork prices Barcelona Market Week Commencing 11 October 2010
Cut Name Price Range (Euro/Kg)
Carcasses (secondary grade) 1,339/1,345
Gerona Loin Chops 2,21/2,24
Loin Eye Muscle 3,15/3,18
Spare Ribs 2,58/2,61
Fillets 5,83/5,86
Round Cut Legs 2,41/2,44
Cooked Ham 2,04/2,07
Rindless Picnic Shoulder 1,45/1,48
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 0,63/0,66

Ukraine/Russia

Temporary import ban on Ukrainian meat processing enterprises

Russia has banned the import of products from 12 out of 15 Ukrainian meat processing enterprises. Rosselkhoznadzor states that the ban is temporary; the exact date of lifting of the ban has not yet been announced.
(Source, meatinfo.ru)

Ukraine

Main plant for production of sausage casings in CIS stops major production

Prilukskiy Plant Belkozin stopped the main proceedings on 30 September, as reported by the head of the Federation of trade unions of Chernihiv region and the regional organization of trade unions of workers of agriculture. According to them, the reason for stopping production was due to managers facing a difficult economic situation in the enterprise, as they were unable to pay on time for raw materials and energy consumption or to repay the interest on loans, etc. A date of resumption of the main shop floor has not been announced yet. Employees had only received their salaries until July. OJSC Prilukskiy Plant Belkozin is the only company in Ukraine and one of the few in Europe that specialises in the manufacturing of artificial collagen casings used in the production of sausages, frankfurters and other foods. The plant was launched in December 1980, and exports almost half of its production to Europe, Asia, and Latin America. Until recently, the company was one of the best not only in Ukraine but also in the CIS.
(Source, UNIAN)

Number of pigs remains stable

As of 1 October 2010, all categories of farms keep around 8,500 pigs. This is 11.7 per cent more than in October 2009 (7,600 pigs). Growing pigs in the private sector consistently predominates: agricultural enterprises keep around 3,700 animals and private farms around 4,800 animals. For the period January to September, pig farms produced 296,900 tons of pork in live weight. During the same period, 248,800 tons of pork in live weight was sold for slaughter. Leading regions in growing and selling pigs for slaughter in live weight among the agricultural enterprises are Donetsk (41,400 and 36,400 tons, respectively), Dnipropetrovsk (35,800 and 30,700 tons) and Kiev (32.5 and 27.3 tons).
(Source, epravda.com.ua)

Nizhny Novgorod region to increase the limit on hog killing

According to the Deputy Head of state veterinary control the Nizhny Novgorod region, the region intensified its efforts to increase the hunt of wild boars which are potential carriers of the African swine fever virus. In 2010, the kill limit for wild boars was increased up to 2089 animals, which is 900 more animals than in 2009.
(Source, meatinfo.ru)

US

Prices are declining

Pork prices including belly prices have started to decline due to subdued consumer demand particularly with supermarket sales, following record levels over the summer. Meanwhile, the National Pork Board is rolling out marketing activities as October has been declared ‘pork month’.

October 2010