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AHDB Pig Market Weekly

12 December 2013

AHDB Pig Market Weekly - 12 December 2013AHDB Pig Market Weekly - 12 December 2013

Following lengthy negotiations, EU Member States have reached agreement on details of new rules on origin labelling for sheep, goat, poultry and pig meat.


Country of origin labelling rules agreed

Meat from pigs born, reared and slaughtered in one country can be labelled as “Origin: Member State name”. Where this is not the case, meat will need to be labelled with the countries of rearing and slaughter. For the former, the name of a single country can only be used if the pig has spent a substantial part of its life there, defined differently depending on the age and weight of the animal. Otherwise, the meat will be labelled as “Reared in several Member States”, “Reared in several non-EU countries” or, voluntarily, “Reared in: list of Member States (or third countries)”.

Last year over 18 million weaners were traded from one EU Member State to another and some would have been affected by the new rules had they been in force. A further 9 million pigs were exported for slaughter, meaning they would have had different countries of rearing and slaughter on labels.

The new rules will apply to all unprocessed meat products except minced meat, where there will be the option to use “Reared in the EU” or “Slaughtered in the EU” (or equivalents for non-EU countries). Once the rules are formally approved by the EU Commission, they will be published in the Official Journal of the EU and will come into force from 1 April 2015.

Little change in breeding herd performance

Latest figures, provided by Agrosoft, show little change in the overall performance of the GB breeding herd. The figures, covering the 12 month to September 2013, show that the average number of pigs reared per sow was 22.90. This was almost unchanged from a year earlier, although there was some improvement in the performance of the best producers; the top third reared 0.3 extra pigs per sow, compared with last year, and the top 10% an extra 0.5 pigs. Litter sizes were also little changed, with an average of 11.55 born alive. There was a modest improvement in the farrowing rate, up from 81% to 82%. The productivity of indoor herds was also little changed on the year but there was a modest improvement for outdoor herds, from 21.59 to 21.75 pigs reared per sow per year.

The figures also show that the recent improvement in feeding herd performance continued. The feed conversion ratio for the rearing herd (roughly 7-35kg) averaged 1.75 in the year to September 2013, 0.06 lower than 12 months earlier. The finishing herd FCR fell to 2.78, lower than the 2.82 last year. Daily weight gains were also better than last year for both rearing and finishing stages, at 495g and 816g respectively.

A full range of performance indicators for indoor and outdoor breeding, rearing and finishing herds can be accessed through the BPEX website by clicking here. As well as providing average figures, the website includes the performance of the best third and best 10% of producers.

UK pig prices

Continuing the theme of the last two months, the finished pig market remained well balanced in the week ended 7 December. The EU-spec DAPP increased by 0.15 to 171.69p per kg, which was nearly 11p higher than a year earlier. Prices have not been more than a penny away from this level since late September. Stability is usual at this time of the year as increasing demand in the run up to Christmas is met by rising supply as pigs are pulled forward in advance of the holiday period. This year, supplies remain tighter than usual though, although they were well up on the previous week. Throughputs were an estimated 175,000 head, more than 13,000 fewer than the same week last year. This is keeping the market firm despite downward pressure from low EU prices. With some pigs evidently being pulled forward, average carcase weights fell to 79.61kg, the lowest level since August but still well above last year.

The broad stability also extended to the weaner market in the week ended 7 December. The average price for a 30kg weaner eased back 41p to £55.82 per head but the 7kg average was up 14p to £42.71. Despite falling for the last three weeks, 30kg weaner prices remain high by historic standards, being almost £10 more than at the same time last year.

UK strikes deal to export pig semen to China

Britain has agreed a deal to begin exporting pig semen to China as part of trade talks to open up Chinese markets for British pig farmers. The deal is estimated to be worth up to £45 million a year to the British pig industry. Four leading pig genetics suppliers from England and Northern Ireland are expected to begin exporting semen to China in the first quarter of 2014. Chinese authorities are concerned about the quality of stock in the country and are seeking foreign genetics to help make their domestic pig industry more efficient. China is responsible for half of the world’s total pig meat production and consumption and demand is growing steadily.

The deal marks an important step in developing trade even further with China. Negotiations are well advanced for a deal to export pig trotters to China, a product which is considered a delicacy there. Opening up markets for products that would otherwise remain unutilised will help to make the UK pig industry more profitable in the future. In the first nine months of 2013, UK pig meat exports to China (including offal) were worth £18.4 million.

Producer share of retail price lower

The average pig price in November was almost unchanged from the previous month at 171p per kg. According to the figures collected by AHDB Market Intelligence, the average retail price for pork increased slightly during the month. As a result, the gap between producer and retail prices was a little lower at 43%. This was around one percentage point higher than in November 2012, the smallest rise recorded so far this year; pig prices were 7% higher than a year earlier, while retail prices rose by 5%. The average bacon retail price for November is not yet available but retail prices for bacon increased in October, meaning that producers received 38% of the retail price for bacon pigs. This was one point up from October 2012 when the producer share was 37%.

Retail price movements varied between the different cuts, with boneless leg 4% more expensive and loin steaks and minced pork both up by 2%. However, boneless shoulder was 4% cheaper, with prices also lower for fillet end leg, tenderloin, chops and diced pork. Compared with a year earlier, almost all cuts were more expensive. Legs and steaks again recorded the biggest upward movement, being 9% and 8% more expensive respectively. Chops were the only cut which were cheaper than in November 2012, albeit only marginally. Pork sausage prices were only marginally higher than in October but were 3% up on a year earlier.

Feed market update

Based on the USDA report published on Tuesday, grain prices are likely to remain in the calm state they have been in for the past few weeks. Production was revised higher for both maize and wheat, resulting in lower settlement prices, across the globe. Global usage of wheat for feed continues to hold up, despite maize being relatively cheaper. The UK feed wheat futures price for Jan 2014 delivery was £162.80/t as at Tuesday’s close, a decrease of £1.45 on the previous Tuesday’s close. The Chicago maize futures price for Dec-13 delivery settled at $168.31/t, slightly down from the previous day’s close. Although this represents an increase over the previous week, it is considerably lower than at the same time last year. The lower grain prices compared with last year have stimulated demand, which is currently preventing prices from going lower.

The Chicago Dec-13 soyameal futures price settled at $511.60/t on 10 December, compared with $491.74 the previous week. In the UK, the Hi pro soyameal (Ex-store, East Coast) price for February delivery was £360/t as at 6 December, down by £7 on the previous week. Increased supplies of oilseeds would suggest lower prices for the feed sector but demand has been holding up, mainly driven by China.

To read more about the latest developments in the feed market click here.

Don’t forget to book your place at Outlook 2014

Bookings are rolling in for this year’s Outlook Conference on Wednesday 12 February 2014 at One Great George Street in Westminster. This year’s conference sold out and places will again be limited for the 2014 event. The opening address will be delivered by Food and Farming Minister George Eustice, with other key note speeches from McDonald’s UK, on supply chains, and Gira, on international trade. There will also be separate sessions looking at the outlook for each of the livestock sectors.

Further details of the conference programme can be found by clicking here. To book your place, please click here.

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