BPEX Export Bulletin – Week 04 - Market Reports

AHDB Pork Weekly Export Bulletin

Reports » AHDB Pork Weekly Export Bulletin » BPEX Export Bulletin – Week 04

25 January 2013

BPEX Export Bulletin – Week 04

The European Commission’s latest 10-year forecasts predict that its share of world meat exports will fall from 13.7% to 10.1% between 2012 and 2022.

It is not the first time that we disagree with these mechanistic export forecasts. In view of current developments and investment in Third Country trade by the main exporting Member States, including ourselves, an increase is more likely on a ten-year horizon, despite the expected short-term fall in European meat production in 2012-13. On the other hand, growth of world meat demand by 1.7% per year seems about right. Interestingly, the forecasts include a possible fall of US$ against € from 2015. In 2022, pork should still represent 49.4% of overall European meat consumption (-0.4% against 2011).

France

€3.60 per kg

This is the lowest price paid to 40 pig producers in the Limousin region for their pigs. These farmers finish a total of 1,000 pigs up to 24 months of age and benefit from a premium when they achieve carcase weights ranging from 120 to 200kg. The breed used is called Cul Noir (Black Bottom), they have to be finished outdoors from weaning to a minimum age of 18 months. The breed is known for its ability to convert chestnuts and acorns into fat. The fat cover of Cul Noir is ten times thicker than a standard pig. Slow growth and the feed give the meat a unique distinctive flavour sought after by Chefs and now increasing in popularity by a growing number of quality city butchers in Paris, Lyon and Bordeaux.

Animal feed production down

According to the syndicate of animal feed manufacturers (SNIA), following a 2.2% decrease in production in 2012, estimates for 2013 suggest a decrease of between 5% and 7%. Altogether, the 156 animal feed manufacturers would reduce their production by 400,000 tonnes, resulting in national production falling below 21m tonnes.

Market

Pigs:
The week began with a renewed slowing of prices, down €0.012 on last Monday at Plérin. Offers are high and demand is falling. According to “Marché du porc Breton”, cold weather could be synonymous with improving demand.

Piglets:
The market remains good. As with our European neighbors, offers are matching demand. Last week, FNP-FNCBV prices lost €0.01 for 25kg and €0.14 for 8kg piglets.

Cuts:
Since the end of 2012, exports for cuts have been quite low. According to “Le marché du porc Breton” exports to the third countries are lower by 2.3% compared with 2011. This is good for USA (+2%) and for Canada (+4.2%).

Pork prices RUNGIS week commencing 21 January 2013
Cut name	Price range (Euro/Kg)
Back fat, rind-on	0.65
Trimmings	1.43
Leg	2.46
Loin including chump	3.04
Loin excluding chump	2.68
Belly extra without trimmings	2.92

Denmark

Danish producers focus on piglet production

The German VAT system and favourable conditions for biogas and tougher environmental regulations in Denmark have contributed to Danish producers focusing on piglet production, according to a new report from the Institute of Food Economics. The report very clearly identifies framework conditions as the problem. German VAT regulations imply that it is €3.20 cheaper to produce a slaughter pig in Germany than in Denmark. The difference is just €0.50 per piglet. The report concludes that future growth in Denmark will depend to what extent the industry can succeed in developing new technologies without significant additional costs while reducing environmental issues.
(Source, Fødevareministeriet)

Market

In Europe, supplies are still high compared with demand. Fresh legs are sold slowly at slightly lower prices. As to other cuts, the trade is also slow at either slightly lower or similar price levels. Exports to both the bacon market in the UK and to markets outside Europe remain unchanged compared with last week.

Danish Slaughterhouses - payments week commencing 21 January 2013
Slaughterhouse	Danish Crown	Tican
Slaughter pigs (70.0 – 86.9 kg) Difference to last week	Euro 1.520 unchanged	Euro 1.520 unchanged
Sows (Above 129.9 kg) Difference to last week	Euro 0.933 unchanged	Euro 0.933 unchanged
Boars (Above 109.9 kg) Difference to last week	Euro 0.800 -0.067	Euro 0.800 -0.067

Germany

Pork Prices Hamburg Market Week commencing 21 January 2013
Cut name	Price range (€ / kg)
Round cut leg	2.20/2.40
Leg (boneless, rindless max fat level 3mm)	2.95/3.20
Boneless Shoulder	2.50/2.70
Picnic Shoulder	1.95/2.20
Collar	2.40/2.58
Belly (bone in, ex-breast)	2.40/2.60
Sheet Boned Belly (rindless)	2.30/2.60
Jowl	1.50/1.70
Half Pig Carcasses U class	2.00/2.10

Italy

Supermarkets also feel the stress

The mood at the important MACA private label show in Bologna was subdued due to the difficult economic situation in Italy and the lack of any consumer confidence. Some 20% of exhibitors were pork processors promoting the same products as was the case in Cibus. The only difference being pre-packed sliced cooked and dry-cured ham opposed to products ready for slicing. Italian supermarkets are under the cosh and are having to increase advertising expenditure to maintain market share. Margins are falling, particularly on meat with the new Law 62 on payments, lighter baskets and down trading.
(Source, own)

Booming exports to Asia

During 2012, Italy would have exported €1.6b worth of food to Asia, including €90m worth of processed meat products. The figures are more remarkable when one considers that most of these food exports consist of added-value products.
(Source, Food Italia)

Netherlands

Record meat consumption in value

In 2012, the Dutch spent a record €2,485m on meat. This figure is linked to meat price inflation. Pork consumption fell from 41.2kg to 41.0kg mainly due to the price increase.
(Source, Boerderij Vandaag)

Spain

Exports pull production

January kill was a record, although the increase in carcase weight has been somehow reversed. Where is this mountain of pork going? Export is the answer. Exports now represent 30% of Spanish pork production and 8% of processed pork production. Exports of fresh and frozen pork and offal are estimated to have surpassed 1.5m tonnes in 2012.
(Source, Mercolleida)

Pork prices Barcelona Market Week commencing 21 January 2013
Cut name	Price range (€ / kg)
Gerona Loin Chops	2.50/2.53
Loin Eye Muscle	3.38/3.41
Spare Ribs	2.98/3.01
Fillets	5.43/5.46
Round Cut Legs	2.63/2.66
Cooked Ham	2.50/2.53
Rindless Picnic Shoulder	1.75/1.78
Belly	2.54/2.57
Smoked Belly with Spare Rib Section Cut off	2.97/3.00
Shoulder chap or Head Jowls	1.18/1.21
Back Fat, Rindless	0.98/1.01

Canada

Japanese investment

The Japanese company, Itochu Corporation, has acquired 33.4% of the shares in HyLife, Canada's largest pig producer which also owns slaughter and processing plants that export pork to Asia. According to Itochu, future exports from HyLife will be able to use Itochu outlets in Asia, with particular focus on the Chinese and Japanese markets. Itochu also indicates that the company will try to extend Hylife’s presence on the market in China through a technical cooperation with the Longda Foodstuff Group on pig production.
(Source, Markedsnyt for svinekoed)

China

Private labels on the up

FMCG products carrying supermarket own labels are a new phenomenon in China. As in Italy (see above), a new specialised show, the Private Label Fair, in Shangai caters for this market. Of note, was the presence of British company Typhoo.
(Source, China Daily)

Russia

Temporary import ban

Rosselkhoznadzor officially informed the head of the veterinary service of Germany that it will introduce a temporary ban on imports of chilled pork, beef and poultry meat from Germany to the Russian Federation commencing on 4 February 2013. Rosselkhoznadzor indicated the absence of their required safety monitoring as the reason for introducing the ban.
(Source, IA Kazakh-Zerno)

Tonnies invest €200m in pork processing plant

According to Fritzsch, the construction of a new pork processing plant is scheduled to begin in 2013. The plant will consist of five modules. The first is expected to be launched before the end of 2014 with a capacity to process 300 pigs per hour. The total investment in the first module is estimated at €45m. The plant will be one of the most modern meat processing plants in Europe, Fritzsch added. It will produce chilled packaged pork, demand for which has grown in Russia in recent years. To ensure the plant has sufficient supplies, the company has established pork farms in the regions of Voronezh and Belgorod and already owns five pig farms in Belgorod.

Ukraine

Lower pork production

According to data recently published by the State Statistics Service of Ukraine, pork production in 2012 decreased compared with 2011. In 2012, chilled pork production was 7.1% lower compared with 2011 and frozen pork fell 13.9% on the year.
(Source, The Ukrainian National News)

Higher pork price

The Ministry of Agrarian Policy and Food of Ukraine reported that, as of 16 January 2013, the average purchase price of pork was 6% higher compared with year earlier levels at UAH18,454 (US$2,265) per tonne. The lowest average price was registered in Ivano-Frankivska oblast at UAH14,000 per tonne and the highest in Sumska oblast at UAH20,350 per tonne.
(Source, PigUa.info)

DOWNLOAD REPORT:- Download this report here