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Overview of This Week's Pig Industry News

5 March 2012, at 11:24pm

ANALYSIS – We might be seeing the first signs of improvements in the pork sector, according to a new report. Pig and meat companies in several countries are beginning to invest again, and pig prices are reported to be on the rise too, which will help especially in those countries where welfare standards are being imposed. African swine fever has been reported in the region of Russia that borders Finland.

Following a long period of volatile commodity prices, financial restraints, tight money markets in the banking sector and a consumer reluctance to spend, the green shoots of recovery for the meat processing sector could be gradually emerging

A recent Fitch Ratings' quarterly update on the US protein industry did not paint a particularly rosy picture and showed pressure was still on the processors. It showed a significant magnitude of margin contraction in beef and pork processing.

According to the report, meat processing margins are compressing because wholesale pricing is not always keeping pace with changes in livestock costs. However, what may be more telling about the potential recovery of the sector is the willingness for US companies to invest, particularly in the beverage and beef sectors.

Similar investment has been seen in companies around the world, notably, and perhaps not surprisingly, in the BRIC countries of Brazil, Russia, India and China.

Russia’s Cherkizovo Group is making good progress at its three new pork complexes in the Tambov, Lipetsk and Voronezh regions of Central Russia.

In 2011, Russia’s Miratorg Agribusiness Holding consolidated its status as a leader in pork production as well as becoming the country’s biggest feed manufacturer.

In Europe, Finnish meat processor, Atria, is to centralise production of meat products in Sweden aimed at streamlining and automating the production process of ham products and the slicing of cold cuts.

These positive and optimistic trends can also be seen in the latest results from some of the leading meat and poultry processing companies, including US-based Tyson Foods, Sara Lee and Hormel Foods as well as JBS and Marfrig of Brazil, Maple Leaf Foods in Canada and Finnish meat processor, HKScan.

In the US, prices for 40–pound feeder pigs are at their highest ever, averaging $85 to $86 per head.

A sellers’ market may also be emerging in the UK. After four months of static or falling pig prices in the UK, sellers heaved a sigh of relief last week as two processing companies raised their prices.

In the Dominican Republic, however, the economic situation for farmers has been so bad that the pig industry has collapsed.

In Brussels last week, delegates to a conference have been examining the new EU animal welfare strategy, which has the aims of enhanced consumer empowerment and strengthening the enforcement of existing rules in an integrated approach to animal welfare.

At the meeting, farmers’ association, Copa-Cogeca, highlighted the need for farmers to be able to recover their additional costs from having high EU animal welfare standards and to make consumers aware of this.

The number of pigs slaughtered in Ireland in January were 13 per cent higher than the same month of last year.

While the overall pig population was almost unchanged on 1 January 2012 from a year previously, there are 11 per cent fewer young animals kept for breeding in Denmark than in January 2011.

Finally, turning to disease news, foot and mouth disease (FMD) has been found on a farm in the Primorye region in the far south-eastern corner of Russia.

A total of 100 pigs have been slaughtered so far in Mpumalanga of South Africa after an outbreak of African swine fever (ASF). In Russia, ASF has also been reported on a farm in the republic of Karelia, which is in the north-west of the country and borders Finland. Ukrainian authorities last week suspended pork imports from Belarus on fears of ASF.