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AHDB Pig Market Weekly

02 April 2013

AHDB Pig Market Weekly - 28 March 2013AHDB Pig Market Weekly - 28 March 2013


Small Rise in February Slaughterings

UK clean pig slaughterings in February 2013 totalled 783,000 head. This was nearly 2% higher than in the same month last year, a bigger uplift than that recorded in January. This figure suggests there have been further improvements in sow productivity, particularly given the decline in the breeding herd recorded in the December census. Good growing conditions during the autumn and early winter were probably also a factor. Scottish throughputs were again less than half their level in February 2012, with most of these pigs transferring south of the border; slaughterings in England and Wales were 7% higher year on year. Throughputs in Northern Ireland were two per cent higher than last February.

Average Weekly UK Clean Pig Slaughter

Source: DEFRA

Adult pig slaughterings increased somewhat in February to 20,200 head. This was around 6% higher than in February 2012. The improvement in cull sow prices during February will have contributed to some increase in herd replacement, especially given the high number of maiden gilts recorded in the December census. However, with producers still losing money, some may still be reducing their herd size. For the second consecutive month, UK clean pig carcase weights were at record levels, averaging 79.83kg, marginally higher than in January and over half a kilo up on a year earlier. As a result, UK pig meat production was up 3% on February 2012 at 65,500 tonnes.

Dutch and Danish Exports Down in 2012

Danish pork exports in 2012 totalled 1.1 million tonnes, 15% lower compared with the year before. This was partly a result of a 7% decline in Danish pig meat production. Together, Germany and Poland accounted for a little under half of the total export market but shipments to these two markets were down 18% and 15% respectively. Lower exports of pork to these countries are largely a function of increased shipments of Danish weaners to be finished there. The UK also reduced demand for Dutch products by 21%, partly due to higher domestic supplies and growing shipments from Germany. Exports to Italy came down 13% as the economic situation led to a general decline in consumption.

Amongst non-EU markets, supplies to Japan and Russia were down 9% and 22% respectively, with Danish trade displaced from Russia to some extent by higher supplies from Canada and the US. Overall, given higher prices, the value of Danish pork exports was 1% lower at DKK19.3 billion (€2.6 billion) in 2012.

Dutch and Danish Pork Exports, January - December

Source: Eurostat, GTIS

Dutch exports showed similar trends as volumes shipped were down 17% year on year, with similar declines across all major markets. Italy, the leading destination, recorded a 16% decline while exports to Germany were 18% lower. Shipments to the Greek and Polish markets were also down while demand from the UK was almost a third lower. With unit values higher, however, the fall in the value of exports was only 9% to €1.4 billion.

UK Pig Prices

The EU-spec DAPP moved up again for the third consecutive week at 157.63p per kg for the week ended 23 March. This meant that the pig price was just over a penny higher compared with the week before. As the Easter weekend approaches and with two short weeks to come, some processors will have been looking to procure extra numbers, encouraging the seasonal uplift in the pig prices. This is also reflected in slightly higher estimated throughputs, which totalled 163,200 head, higher than both the previous week and a year earlier, when Easter fell slightly later. With prices rising slightly faster than a year earlier, the annual gap widened this week, as prices were just over 15p higher compared with the corresponding week in 2012. Carcase weights for the week came down marginally at 79.81kg but are now almost a kilo up on the year as there is still little sign of the normal seasonal fall in weights.

GB Finished Pig Prices (DAPP)

Source: AHDB Market Intelligence

For the week ending 30 March, the weaner market hit £48.29 per head. This was the highest return for the producer since August 2010 and was over 50p up on the previous week. Higher pig prices continued to keep the weaner prices firm. The annual price gap increased to just over £2 per head and weaner prices were nearly £7 higher than the same week in 2011.

The cull sow prices reached 106.76p per kg for the week ended 16 March. This was almost two pence up on the week but prices remained 13p below the same week in 2012. The latest week showed cull sow prices back to their level immediately pre-Christmas. AHDB estimates that sow slaughterings for the week ended 16 March totalled 5,700 head.

EU Pig Meat Consumption Still Falling

Recently published AHDB/BPEX estimates, based on EU production and trade, show that the amount of pig meat available for consumption in the EU fell again in 2012. Per capita consumption was estimated to be 40.4kg, down 300g compared with 2011. Consumption has fallen steadily since 2007, when the EU average was over 43kg per capita. The fall was largely the result of a 2% fall in EU pig meat production, with exports little changed compared with the previous year. The resulting higher prices hit sales, given that consumers are still struggling given the difficult economic climate.

Per Capita Pig Meat Consumption in Selected EU Member States, 2012

Levels of consumption of pig meat varied widely across Europe. The population of the UK generally eats less pig meat than in most other EU Member States, with average consumption just over 25kg. This reflects the relatively high consumption of other meats in the UK, with chicken the favourite protein. Across most of the rest of Europe, pig meat is the leading source of protein and consumption levels are higher. Among the larger EU Member States, consumption was highest in Austria, Germany and Spain. In each of these, consumption was more than double UK levels as over 50kg of pig meat was eaten per person.

EU Pork Exports Lower in January

In January, EU pork exports mirrored the trend of the second half of 2012 and were down 10% on a year earlier at 120,000 tonnes. A fall of a quarter in shipments to Russia was a major factor, as was a sharp fall in volumes sent to South Korea. This was partly offset by strong performance in China, with shipments almost double those of a year earlier as the EU took advantage of lower US supplies, partly due to the strength of the dollar. This also allowed the EU to increase shipments to Japan by 4% while Australia was another growth market.

EU Pig Meat Exports

Source: Eurostat, GTIS

The strength of the Chinese market helped the EU to increase offal exports by 4% to 88,000 tonnes. Shipments to China were up by nearly two-thirds and this was only partly offset by a fall of a quarter in volumes sent to Hong Kong. As with pork, exports to Russia were down, in this case by around 20%. For live pigs, the fall in shipments to Russia was even sharper, with numbers less than 5% of those in January 2012. This contributed to a 40% fall in live exports from the EU.

Feed Market Update

Nearby UK feed wheat futures have moved up slightly over the last week and are once again over £200 per tonne. Unseasonably cold weather across Northern Hemisphere regions is slowing the progress of spring sowings, while also stressing emerged and winter sown crops. Livestock are also having to be kept inside longer, adding to compound feed demand as many farmers run low on silage stocks. The market is now getting prepared for key US quarterly stocks and prospective planting data, released on Thursday, which usually causes price movements.

Soyabean prices have also increased on continuing concerns over the ability of Brazilian infrastructure to transport the record crop to the ports. This has led to fears over tightening near-term stocks if demand is diverted back to the US. Soyabean stocks will be included in Thursday’s USDA release so the oilseed market can be expected to be just as volatile on Thursday afternoon as the grains market. Non-GM soyameal supplies are becoming tighter, a situation which is likely to last until new crop European soyabeans are available, which could cause problems for producers linked to organic or non-GM only contracts.

March Pig Market Trends out now

The March edition of Pig Market Trends was published on Tuesday. As well as the usual coverage of producer prices, slaughterings and production, trade, retail sales and prices, costs of production and other industry news, this month’s edition covers the results of the December pig census in both the UK and EU.

Key messages this month include:

  • UK pig herd smallest in 60 years and female breeding herd down but more gilts suggests optimism returning
  • Decline of EU pig herd continued in second half of 2012, confirming tight supply situation for 2013
  • Gap between UK and EU pig prices narrowing rapidly, partly due to the weaker pound
  • Average UK clean pig carcase weight in February highest on record for second straight month
  • UK pork exports up again in January but more than offset by sharp decline for cured pig meat
  • Heavy promotion of lamb legs leads consumers to switch to them from other meats, including pork
  • Cost of pig production down slightly in March but estimated losses still around £5 per pig

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