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AHDB Pig Market Weekly

23 May 2013

AHDB Pig Market Weekly - 23 May 2013AHDB Pig Market Weekly - 23 May 2013

UK pork imports continued to decline, with the total in March 7% down compared with the same month in 2012.


UK Imports and Exports Move in Opposite Directions

Germany and the Netherlands shipped 1% and 9% more on the year. However, these increases failed to mitigate the impact of a 23% drop from the primary supplier, Denmark; Irish imports were also down, by 8%. Tight supplies and higher prices were factors but subdued demand or imported pork, partly due to increased retailer preference for UK-sourced pork, also held the market back. Cured meat imports, including bacon and uncooked ham, were down 16% year on year in March. Processed products, including sausages, were also shipped in lower quantities

UK Pig Meat Trade

Source: HMRC

On the contrary, UK exports were generally stronger in March, as the amount of pork shipped rose by more than a quarter on the year. Shipments to the main market, Germany, were down 5% but the 2,200 tonnes sent to China pushed the total up. In the first three months of the year, the value of UK pork exports rose by 22% and amounted to a £53.5m. While cured exports in March recorded a 40% annual decline, sausage shipments more than doubled. However cured and processed meat account for a small share of total exports. Offal exports are more important and growth in this category continued again in March, driven by higher shipments to other EU Member States.

Stable Danish Pig Herd

The latest figures published by Statistics Denmark show that overall pig numbers totalled 12 million head in March 2013. This was a marginal increase compared with the same quarter in the previous year. The breeding herd was also little changed compared with March 2012. In-pig gilt numbers increased but there was a 2% drop in maiden gilts, suggesting stability may continue in the coming months, with producer confidence in Denmark still somewhat fragile.

Danish Pig Numbers, March

Source: Statistics Denmark

Strong productivity led to a 3% rise in piglet numbers. However, the total pig population in Denmark was held back by a 1% year on year decline in slaughter pigs. This was the result of continuing growth in weaner exports to Poland and Germany, which meant that the rise in piglet production was not translated into higher slaughter pig numbers.

UK Pig Price

The EU-spec DAPP reached 164.03p per kg for the week ended 18 May 2013. Recently, the pig price has set a new record every week and the latest quote was over 1p higher than the previous week. With prices remaining strong, producers received 15p more compared with the same week last year. With pig supplies still relatively plentiful and EU prices remaining subdued, the recent price increases appear to be driven by retailers preferring to procure UK product since the horsemeat issue earlier in the year. For the week, throughputs totalled 162,800 head, broadly in line with a year earlier while the average carcase weight remained little changed at just over 79kg.

GB 30kg Weaner Prices

Source: AHDB Market Intelligence

The price of a 30kg weaner continued the upward trend since the start of the year, with the weekly average reaching £49.89 per head. This was only marginally up on the week but almost £6 higher compared with the corresponding week in 2012. The large annual gap is mainly due to the higher finished pig price, aided by the easing of feed prices since the turn of the year.

The recent weakness in the sow market continued in the week ended 11 May 2013, as prices fell to 100.59p per kg, their lowest level since February. This was 2p lower than a week earlier. Sow markets across the EU have remained subdued of late, with prices in the main export markets well down on a year earlier. This was reflected in the GB price with a difference of 17p on the same week last year.

EU Exports Fall Again

EU pork exports contracted again in March, when shipments to non-EU markets amounted to 127,900 tonnes. China and Japan were the main growth markets, taking 48% and 18% more European product respectively. However, the contraction was partly due to 8% lower shipments to Russia and reductions to other countries in the Former Soviet Union. Despite Russian restrictions on pork from several countries in North and South America, imports from the EU were lower due to increased domestic production. As previously recorded, exports to other Asian countries including Hong Kong and South Korea, were also lower. Figures for the year to date show similar trends, with 36,700 tonnes less pork shipped compared with the first quarter in 2012.

Eu Pig Meat Exports

Source: Eurostat, GTIS

Pig offal exports in March also continued to decline as 17% less was supplied to non-EU countries than in March 2012. While the volume shipped to China remained almost unchanged, its market share increased from a third to 40%. Hong Kong and Russia, on the other hand, imported less pig offal from the EU. However, there were some positive developments in smaller markets, including the Philippines and Thailand. The first quarter figure showed a smaller fall for pig offal exports as 7% less was traded compared with the same period in 2012.

Feed Market Update

The UK new crop LIFFE wheat price (November 2013) increased slightly on Tuesday, after dropping to the lowest level since October on Monday. Tuesday’s price closed at £176.40/t, up by 40p on Monday’s close. The new crop price decline followed better weather in the US which also allowed US farmers to achieve a record maize planting progress last week. The latest HMRC data showed that the UK continues to import more cereals, with Germany the dominant wheat origin. The latest cereals usage data released by Defra last week also supports this trend, with maize usage in feed rations reaching 166,600 tonnes between July and March, double the same period last year.

The Chicago (July 2013) soyameal price closed at $483.58/t on Tuesday, up $29.65 on a week ago, following the direction of the tight short-term soyabean market. On the other hand, the Hi-pro soyameal (ex-store East coast) price as at last Friday decreased by £8 on the previous week at £389/t. For the new crop, US farmers had sown 24% of the intended soyabean acerage by week ending 19 May, compared to 6% the previous week.

Growing Optimism for the EU Economy

Recent economic news from Europe has not been positive; Cyprus’ economy is in meltdown, credit ratings have been slashed across the region and unemployment on the continent is at an all-time high. However, the EU Commission’s spring 2013 economic forecast suggests there might be cause for optimism as the European recession could finally be coming to an end. Last year, GDP in the EU fell by 0.3% while the Eurozone economy shrank by 0.6%, having contracted for five consecutive quarters. Following the downturn, domestic demand is returning very slowly, with expectations of further unemployment rises continuing to drag on household expenditure. Economic activity is expected to remain weak but to stabilise slowly during 2013, before returning to growth towards the end of the year and into 2014.

By contrast, the UK economy grew by 0.3% in 2012 due wholly to an increase in domestic demand. However, net exports performed poorly and impacted negatively on growth to the greatest extent in a decade. Net exports are not forecast to make a positive contribution to UK growth until 2014, due to the slow recovery in the Eurozone, the UK’s largest trading partner. The Commission forecasts that the UK economy will grow by 0.6% this year and by 1.7% in 2014. However, the economic and financial systems in both the UK and Eurozone remain fragile, with uncertainty surrounding the forecasts remaining high.

New Publications Add to Available Market Intelligence

Over the last few days, several new publications have been added to the BPEX website, expanding the range of market intelligence available on the site. The new Pig and Poultry Pocketbook was launched at last week’s Pig and Poultry Live event. For the first time this brings together some of the key statistics about the two sectors covering areas such as the structure of the industry, production, prices, trade and consumption. Hard copies of the Pocketbook can be ordered by e-mailing [email protected]

Last week also saw the addition of four new profiles to the series of country reports on the website, bringing the total number to 20. The new reports include summaries of the global and EU pig markets; the other two cover Australia, which the UK has recently gained export access to, and Ukraine. As well as the new profiles, five existing ones have also been updated, covering Denmark, France, Germany, Poland and the US. Each report provides an overview of the pig market in the country (or region) and the outlook for the coming year.

May 2013

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