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AHDB Pork Weekly Export Bulletin

21 February 2012

BPEX Export Bulletin - Week 7BPEX Export Bulletin - Week 7

The 15-strong joint BPEX-EBLEX mission to South Africa attended by the four largest UK processors and pork traders active in the region was a huge success.
British Pig Executive Weekly Export Bulletin

Meeting with 11 importers took place in Cape Town and Johannesburg whilst we held talks with the major retailers Shoprite, Pick & Pay, Massmart and Woolworths, who aim to import more products. The Rt Hon William Hague MP, Foreign Office Minister addressed our reception in Cape Town which was attended by 70 people. He commended our “Great livestock industry”, our exports successes and the reopening of markets closed to British meat. A market report is available from the export office. This major mission coordinated in South Africa by UK Trade & Investment will evidently kick-start our export of pork and porcine exports in South Africa, the largest importer of meat on the African continent.



The demand on the market was fairly stable throughout January and into February. It has not changed, but by the end of January there was a decline in supply from the slaughterhouses, in particular in Germany, and it has pushed up prices again. The impact was higher prices of legs and front parts, but now prices have become stable again. Trimmings are sold at increasing prices as well. Collars and tenderloin are still out of season, and trade with these products is calm. Backs are still low in Europe and the same applies to exports of bacon to the UK. On third country markets there are stable exports to Russia. Here the joker is the building up of a Russian own production together with a lower import duty on live pigs due to the WTO agreement, and on the other hand occurrences of African swine fever, which apparently is not under control, and where the outbreaks are close to areas with intensive pig production. Exports to China are getting started after the Chinese New Year, and the Danish exporters have entered a number of new contracts. It is expected that prices are going to increase quietly during the next months. Exports to Japan are stable with fine prices, but with respect to tonnage it is below the expected.
(Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

Danish pig farms had profits in 2011

The first accounts that have been finalized indicate that in 2011 the pig farms had a little surplus. The first 61 accounts for all types of pig farms from LandboNord, LandboSyd and LROE show an average operating result of € 10,000. Compared to 2010 it is an improvement of € 35,000. The pig farms achieved a progress in the operating result of approximately € 19,000 after modest increases of capacity costs. Interest expenses have increased slightly more due to a little higher debt and higher interest on debts to banks. A forecast for 2012 has been prepared in which the gross margin is expected to improve by € 65,000.
(Source, Landbrugsavisen)

Increasing demand for organic pigs

It is possible to sell 100,000 more organic pigs than today estimates Danish Crown. The only problem is that there are not sufficient pigs to sell, and prospects are that the production of organic pigs won’t increase. It is almost impossible for Danish farmers to change to organic and outdoor production. During times of crisis banks have closed for lending out money, in spite of the fact that welfare pigs have a better price and bring greater profit. Danish Crown informs that they can increase exports of outdoor bred pigs to Australia, where last year almost half of the meat from outdoor bred pigs got exported to. The high demand means that the meat is sold at a high price. Danish Crown also estimates that they will be able to increase exports of organic pigs without any problems. Exports are primarily to France.
(Source, Politiken)

Danish slaughterhouses - payments week commencing 13 February 2012
Slaughterhouse Danish Crown Tican
Slaughter pigs (70.0-86.9kg)
Difference to last week
Euro 1.374
Euro 1.374
Sows (above 129.9kg)
Difference to last week
Euro 0,960
Euro 0,960
Boars (above 109.9kg)
Difference to last week
Euro 0.827
Euro 0.827


Top margins for the retailers

The structure of 1kg cooked ham retail price sold at €10.50 average (over 3 years: 2008 – 2009 – 2010) evolves as follows
€3.26 at producer level or 31% of total retail price
€3.82 at abattoir de-boning level or 3% of total retail price
€5.28 at charcuterie processor level or 13.8% of total retail price
€10.50 at retail level, VAT (5.5%) included or 44.7% for retailer

The price of loin sold in fresh cuts in supermarkets amounts to €6.20 /kg cwe

The price is structured as follows:

€2.10 for the producer
€1.40 gross margin for abattoir/cutting plant
€2.40 gross margin for retailer
+ 0.5.5% VAT.


According to the “Marché du Porc Breton”, offer declines in France and in all Europe. But, at the same time, demand is good, in particular for Exports. In this context, prices adjustments are awaited for the second part of the week.


It is always Export which is good for French market. Sales to the European Union as for third countries remain regular and concern almost all cuts. This helps our French market. This compensates the return of a less dynamic national demand. Prices are still higher for most cuts.

Pork prices RUNGIS week commencing 13 February 2012
Cut name Price range (Euro/kg)
Back fat, rind-on 0.75
Trimmings 1.47
Leg 2.07
Loin including chump 3.00
Loin excluding chump 2.51
Belly extra without trimmings 2.58



Demand on the wholesale market is still rather quiet. Wholesalers and deboners tend to order smaller quantities due to margins remaining unsatisfying. While due to less availability chops, loins and collars could be sold at slightly increased prices hams, shoulders and bellies were sold in good quantities but at unchanged prices. Sales of sow meat are satisfying.
(Source, AMI)

Slight decrease in meat consumption

In 2011 German consumers bought less meat and meat products than in 2010. According to GfK data 2.2% less meat was purchased. Due to increased costs for raw materials these smaller amounts consumed were sold at higher prices, according to AMI. Prices for fresh pig meat and beef increased by 9.4% and 4.4% respectively. Prices for meat products and cooked meats rose by about 2%.
(Source, ISN)

The world’s largest pig meat exporter

In 2011, Germany once again was the world’s largest exporter of fresh and frozen pig meat. According to "agrarisch dagblad" 1.41 million t of pig meat were exported between January and December 2011 which is an increase by 8% compared with the previous year. The US score second with exports having increased by 23% to 1.24 million t. The majority of German pig meat was exported to other EU member states with Italy being the main importing country accounting for 279.602 t followed by Poland with 173.695 t. Exports to Russia remained stable at 110.385 t.
(Source, topagrar)

Increased volume

Last year the German meat industry produced more meat than ever before. Compared with 2010 figures the production volume increased by 119.000 t (+1.5%), according to the National Statistics Office. Production of pig meat summed up to 5.6 million t and exceeded the previous year’s result by 2%. Pig meat accounted for 2/3 of the overall meat production. Poultry production increased by 3.1% to 43.200 t, beef production decreased by 2.7% to 32.100 t.
(Source, Lebensmittel Praxis)

Unfair competition

According to Joris Coenen, marketing manager for the Belgian Meat office, the German meat industry’s success is mainly due to dumping wages abattoir workers are being paid in the country. Following the publication of the numbers of industrial slaughterings in Germany, Coenen stated that "Labour is a significant cost factor not only at slaughter but as well at de-boning". Production costs in Germany are 10 Eurocent below Belgian production costs which results in a substantial competitive advantage.
(Source, topagrar)

Pork Prices Hamburg Market week commencing 13 February 2012
Cut Name Price range (€/kg)
Round cut leg 2.10/2.30
Leg (boneless, rindless max fat level 3mm) 2.95/3.20
Boneless Shoulder 2.40/2.55
Picnic Shoulder 2.00/2.20
Collar 2.30/2.55
Belly (bone in, ex-breast) 2.20/2.40
Sheet Boned Belly (rindless) 1.90/2.25
Jowl 1.40/1.55
Half Pig Carcasses U class. 2.02/2.12


Pork prices in Barcelona Market Week commencing 13 February 2012
Cut Name Price range (€/kg)
Carcasses (secondary grade) 1,579/1,585
Gerona Loin Chops 2,38/2,41
Loin Eye Muscle 3,31/3,34
Spare Ribs 2,83/2,86
Fillets 5,38/5,41
Round Cut Legs 2,31/2,34
Cooked Ham 1,87/1,90
Rindless Picnic Shoulder 1,57/1,60
Belly 1,96/1,99
Smoked Belly with Spare Rib Section Cut off 2,39/2,42
Shoulder chap or Head Jowls 1,08/1,11
Back Fat, rindless 1,08/1,11


Cheaper cuts sought

survey by Coldiretti, the Farmers’ Union, shows that 43% of Italians are looking for cheaper meat cuts, offal and new recipes in response to the economic crisis. Still, 50% of Italians have not changed their shopping behaviour.
(Source, Coldiretti)


Special slaughter houses to be built in Kuban

The Governor of Kuban, Aleksander Tkachov, sacked deputy-governors responsible for agriculture in the area (in several regions) because they didn’t show necessary professional skills in fighting ASF. He has also passed several regulations that will help stop the disease. First, the fines for violation of veterinary legislation will be increased. Second, the number of veterinary inspectors in Kuban will increase to 300 persons. Finally, there will be special slaughterhouses built to slaughter sick animals or those exposed to the disease.

New outbreak of ASF in Briansk Oblast

A new outbreak of ASF was registered in the Klintsovskiy region of Briansk Oblast. On hunting lands in the region, forest rangers found several dead boars. Lab tests showed that the reason for their deaths was ASF. Soon afterward, 2 pigs died of ASF in a private household near the place where the dead animals were found. All animals in the household were slaughtered.
(Source, Rosselkhoznadzor in Briansk and Smolensk oblasts)

Imported Pork Moscow Market (Feb 10): Imported Pork St.Petersburg Market (Feb 10):
Shoulder (no bone): USD 6.0/kg Leg (no bone): USD 5.9 /kg
Leg (no bone): USD 6.2 /kg Leg (with bone): USD 4.5 /kg
Liver: USD 2.23/kg
Liver: USD 2.0/kg

In Moscow Oblast production of pork grew 3 times during the last 5 years

According to information provided by the Ministry of Agriculture of Russia, the production of pork grew 3 times over the last 5 years – from 13,800 t in 2005 to 46,100 t in 2011. Starting from 2006 there were 10 investment projects implemented on the territory of the oblast which made the growth possible.
(Source, RIA Novosti)


Pork prices as of Feb 13, 2012

According to the information provided by the Ministry of Agrarian Policy and Food of Ukraine, as of Feb 13, 2012, the average purchase price for pigs of the first and the second categories was USD 2,173/t. The price increased slightly during the last month (since Jan 13, 2012), and increased 25% during the last year. The average retail price for pork as of Feb 13 was USD 5.45/kg.


Chinese imports in 2011

With production down 3%, direct imports of pork rose from 199,000 tonnes to 467,000 tonnes in 2011. The USA represented more than half, ahead of Denmark, Canada, Spain, France and Germany. Direct imports of pig offal rose from 702,000 t to 882,000 t with the same ranking.

South Africa

Market support

The country boasts its low level of support to farmers. Only 1.2% is dedicated to pork production ahead of sheep meat with 13.4% of revenue but behind beef with 0.8%. This support does not account extension services, export marketing and other indirect support measures.

Pork market

Pork ribs are hugely popular and ubiquitous in South African restaurants. Pig offal is also in demand. However, pork at retail has difficulty to find its place. It is squeezed between chicken and beef and still strong lamb prices despite high prices. Bacon and processed products are very popular, particularly cheaper varieties. Sliced processed meats from Italy and increasingly Germany are more present in stores.

South African retailers lead the charge in Africa

South African retailers are expanding aggressively all over Sub-Saharan Africa and are due to benefit from rising consumption there. For instance, Pick & Pay now controls 79 supermarkets in Zimbabwe as well as stores in Mauritius, Zambia and other African countries under its TM brand. Massmart (Walmart) bought the African operation of Metcash and now has stores in 12 countries outside RSA including Ghana. Shoprite is now the largest retailer in Africa with particularly large operations in Angola and neighbouring countries.

Food labelling still unclear

Food labelling remains a difficult area with the new GMO labelling legislation postponed and country of origin labelling for meat yet to be implemented.


Gestation stalls

McDonald’s announced that it will ask its US pork suppliers to present their plans for the termination of the use of sow gestation stalls as the company believes gestation stalls not to be a sustainable production system for the future. According to Dan Gorsky, senior vice president of McDonald’s North America Supply Chain Management there are alternatives that McDonald’s considers to be much more favourable for the welfare of sows.
(Source, Various)


More meat sold

The Swiss Bell group has continued on its growth track in 2011. The adjusted revenue increased to 2.52 bn CHF which represents an increase of 1.8%. For 2012 Bell expects moderate growth on both the Swiss as well as the European markets.
(Source, Lebensmittel Praxis)

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