W52: Weekly Pork Update

Europe

Continuation of Trends in Europe (Dec 26)

After the great excitement linked to the preparations for the end of the year celebrations during a large part of December, calm returned to the pork trade in Europe last week, a few days before Christmas. In a very particular context for this end of 2022, with public holidays placed on a Sunday and particularly low levels of offers, the courses have been generally renewed and for some until the first days of January 2023.

Fattening Pig Quotation in Europe Is Down Due to Falling Demand (Dec 28)

According to Vion, demand has almost exclusively come from Eastern Europe in recent weeks. This has caused price increases in Northeast Europe and Western Europe since week 47, while in recent weeks there has been no movement in Southern Europe, Asia, China and England and the extra demand for the holidays has been missing. Now that Eastern Europe is supplied with more than enough meat, demand has suddenly come to a standstill just before Christmas. Because the sales of pork in the Netherlands and in the rest of Europe are disappointing and exports to countries outside Europe have virtually come to a standstill, too much meat is entering the European markets for which there are insufficient sales opportunities. 

Spain

Increase of USD 3.18 for Piglets in the Lonja de Zamora (Dec 27)

Few movements in the session of December 27 of the Lonja de Zamora, with the rise of USD 3.18 (3 euros) in piglets as the main news along with the drop of USD 0.11 (0.1 euros) in suckling lambs. Repetition in the white pig with the "normal" at USD 1,745.18/kg (1,645 euros) while both the "select" and the "fat" remained at USD 1,757.91/kg (1,657 euros). With regard to piglets, an increase of USD 3.18 (3 euros) brings those of "big game" to USD 78.51/animal (74 euros) and those of "collection" to USD 68.96 (65 euros).

United States

Pork and Beef Quotes Rise on CME Due to Slaughter Difficulties (Dec 26)

From December 16 to December 23, the cattle and pork futures market on the Chicago Mercantile Exchange developed in the same direction. Although during the week the quotes for pork and cattle meat were not stable, by the end of the week, on the last day before Christmas, they went up sharply and turned out to be higher than the values recorded as of December 16. 

Likelihood of JEV Being Found in US Low, According to Experts (Dec 28)

In February 2022, an outbreak of Japanese encephalitis in Australia drew the attention of pork producers, veterinarians, animal and public health government officials, and allied industries around the world. In the US, the pork industry began monitoring Australia’s situation and response, ramping up preparedness activities immediately. Some of these efforts were shared during a symposium held in October, hosted by the Center for the Ecology of Infectious Disease at the University of Georgia, sponsored in part by the Swine Health Information Center. Michael Neafsey, one of the health coordinators for USDA APHIS said the likelihood of JEV being found in the US is low, however, taken seriously by his agency. If established, substantial human and animal health issues along with significant economic impacts are expected outcomes. 

US Meat Production Rises (Dec 30)

Red meat production increased slightly in November, as beef and pork production increased MoM, according to data from the United States Department of Agriculture (USDA). Pork production increased to USD 2.83B (2.351B pounds) from USD 2.81B (2.338B pounds) the previous month. Commercial pork production in the first 11 months of 2022 was USD 29.80B (24.764B pounds), which is actually down from the USD 30.41B (25.271B pounds) produced in the same period last year. Pig slaughter last month dropped slightly to 10.916M heads from 10.919M in October. Pig slaughter since the start of the year was reported at 115.016M head, down from 117.627M a year earlier.

Pork Inventory in US Decreases by 2% (Dec 30)

Some highlights from the latest US hog inventory report released by the National Agricultural Statistics Service (NASS), Board of Agricultural Statistics, United States Department of Agriculture (USDA) on December 23: As of December 1, there were 73.1M hogs on farms in the US, 2% less than in December 2021 and 1% less than last September. Of the 73.1M pigs, 67.0M were commercial pigs while the remaining 6.15M were breeding pigs, which is 0.5% higher compared to December 2021 (6.13M) and very similar to the total counted in September 2022. Between September and November 2022, 33.7M pigs were weaned, which is 1% less than in the same period of the previous year. An average of 11.22 piglets were weaned per litter. US hog producers aim to have approximately 2.95M farrowing sows between December 2022 and February 2023, and 2.98M between March and May.

Germany

Pig Doomsday Threats Germany (Dec 27)

The number of pigs in Germany has reportedly shrunk to a record low. This comes at a time when the country is experiencing a spike in energy costs after the Russo-Ukrainian war. The German Federal Statistical Office (Destatis) acknowledged in a press release that this was due to the continuing difficult economic situation. They cite sharp increases in energy, fertiliser and feed costs as a driver of the herd's decline. "Germany recorded 21.3M hogs on November 3, a decrease of more than 10% compared to the previous year and a decrease of almost 20% compared to 2020, bringing it to an all-time low," according to Destatis data quoted by CNN International. Germany also lost 1.9K pig farms this year. This follows a decrease in the number of farms by 1.6K units between 2020 and 2021.

Piglet producers exempt from contributions for animal disease control (Dec 30)

As announced by the Bavarian Ministry of Agriculture in Munich, piglet producers in Bavaria have been completely exempted from contributions to the Animal Diseases Fund for 2022. The support has already been implemented. According to the ministry, 1.17K farms with a total of around 146.3K sows benefited from a one-off financial support of around USD 2.34M (€2.2M). This corresponds to more than 80% sow farms and more than 90% breeding sows kept in Bavaria. Regardless, the number of breeding pigs and sows kept in Bavaria this year has fallen relatively more than the national average.

Brazil

Productive Scenario for Independent Pig Farmers in Brazil in 2023 (Dec 28)

Brazil is the fourth largest producer of pork in the world, with an estimated production of 4.8M MT in 2022, according to data from the National Supply Company Conab. This year, only China, the European Union and the United States are expected to produce more pork than Brazil. When analysed, the production costs of Brazilian pig farming was observed to be a significant commitment to the inputs that make up the feed, mainly corn and soybeans, which together represent more than 60% of the effective operating cost (ECO) of independent pig farming (not integrated). This fact means that independent producers are greatly affected by changes in corn and soybean prices, impacting the margins of the activity.

Decline in Pork Exports and Greater Supply of Animals Pressure Value in 2022 (Dec 28)

The national pork sector recorded weakened external demand in 2022, while production in the first three quarters of the year was a record. In this scenario, the availability of meat in the domestic market has grown considerably, putting pressure on trading values for live animals and protein. On the external front, despite the fact that the volume exported in August reached a monthly record in the historical series, of 114.6K MT of meat, shipments abroad from January to December 2022 amount to 1.08M MT, 3.6% below the amount shipped in the same period of 2021, according to data from Secex, compiled by Cepea. On the domestic front, the national demand for pork throughout 2022 was below expectations for the sector, due, above all, to the weakened purchasing power of the Brazilian population, in view of high inflation. 

Difficult Year for Brazilian Pig Farming Due to High Production Costs (Dec 29)

Difficult year for Brazilian pig farming due to high production costs and high domestic availability of pork (advance in production and retraction in exports). Pig farmers’ margins were negative for practically the entire year. The independent producer’s losses reached USD 55.23/head (BRL 300) in the first half, as happened in Santa Catarina. Bankruptcy and withdrawal from the activity occurred, mainly amid independent farmers with a more fragile capital structure, those who were already indebted in 2021.

High Pork Availability Will Be the Biggest Challenge for the Sector in 2023 (Dec 30)

High pork availability will be the biggest challenge for the sector in 2023. Next year will be challenging for the Brazilian swine industry due to availability, which will continue to expand. The first semester will be more challenging because of several factors, such as; seasonality of demand. Historically, pork consumption falls in the first months of the year due to the lower purchasing power of households due to the payment of taxes and the purchase of school materials. In addition, high summer temperatures impact consumption and production cost. The price of corn must remain at high levels in the first months of the year, considering a difficult logistical framework due to the priority of selling soybeans. Freight must go up. Another point is that the final corn stocks will be short due to the strong exports of the current business year. Soybeans must present a bearish picture due to the record production estimate. 

Poland

Prices of Pork in Poland (Dec 29)

From 12 to 18 December this year, compared to the previous week's quotations, there was a decrease in the prices of pork meat. The W50 price stood at USD 1.75/kg (PLN 7.67), indicating a decrease of 1% WoW and an increase of 7.5% MoM and up 66% YoY.

United Kingdom

Rapid Fall in the Number of Sows in Great Britain (Dec 27)

At first glance, the fall in the pig herd in the United Kingdom seems to be less than expected this year. Despite the difficult period that British pig farming is going through, the size has fallen by 2.5% to 5.19M pigs. However, British sow farming is shrinking by 15%. In the United Kingdom, more than 131K fewer pigs will be counted in 2022, bringing the pig herd to 5.192M animals. Of these, nearly 80% (4.11M) are held in England. In Northern Ireland, 0.72M pigs will still be kept in 2022, in Scotland 0.34M pigs and in Wales only 26.9K pigs. The impact of the difficult circumstances and negative margins in the British pig farming sector is mainly visible on the propagation side. 

NPA Seeks Clarity on UK’s Ability to Export Pork to EU in Event of ASF Outbreak (Dec 27)

The NPA is seeking clarity on whether the regionalisation approach would apply to pork exports to the EU in the event of an African swine fever (ASF) outbreak in the UK. Under the EU’s ASF regulations, where an outbreak occurs, the sale of pork products from the affected region to other member states is outlawed. However, exports can continue from regions of the country not affected by ASF to other parts of the EU. This rule has been applied in a number of member states that have experienced ASF outbreaks in recent years, including Germany, Italy and Poland. The UK continues to import pork from ASF-free regions of affected countries. But it remains unclear what the situation is following the UK’s departure from the EU. 

UK Produced 91.9K MT of Pig Meat in November (Dec 27)

Supported by Christmas demand, November had the highest monthly volume since March. Production grew 6% from October, despite average carcass weights easing in the month to 89.4 kg (-1%). YoY production is down 2%, predominantly due to the heavier carcass weights brought on by the backlog late last year. Increased production in the month was driven by increased slaughter, with November clean pig kill recording the highest monthly numbers since March, at 995.4K head. Clean pig slaughter is up 8% MoM, although numbers are inline with those seen in November last year. For the YTD (Jan-Nov), pig meat production stands at 966.2K MT, up 2% on this time last year. This growth continues to be driven by the heavier carcass weights seen at the beginning of the year, as the YTD clean pig slaughter remains in line with 2021 numbers.

Russia

Russia Intends to Join the Group of 5 Leading Pork Exporters in the World (Dec 26)

According to Andrey Razin, this is a rather ambitious goal, but achievable because Russia has learned to deal with great challenges. Russia's meat industry is growing well at the end of the year, which is a positive impetus for continued growth. Food safety is an important issue for achieving this goal. The incidence of African swine fever (ASF) has shifted from a seasonal factor to a problem faced throughout the year. Mr. Razin emphasised that production is achieving high productivity and hopes to penetrate foreign markets, but this can be done if food safety is ensured at each enterprise to reduce the current risks. According to estimates by the Russian Pig Breeding Union, in the first nine months of 2022, the Russian Federation increased pork production by 6.2%, to 4.159M MT. 

Russian Pork Exports Expected to Reach 170K MT by the End of 2022 (Dec 29)

Yuri Kovalev, director general of the National Union of Pork Producers, stated that pork exports began to recover in the second half of the year as logistical problems were resolved and the price situation normalised. He said that this year the structure of Russian exports of pork products has changed significantly. If previously the countries of Southeast Asia represented around 50% of total exports, in 2022 their share decreased to 30%. Declining exports to Vietnam and Hong Kong were partially offset by increased pork supplies to Eurasian Economic Union countries, mainly Belarus and Kazakhstan. Exports to Belarus in the first nine months of this year more than doubled, surpassing 55K MT.

China

The Live Pig Market Continued to Fall, the Price Showed a Sharp Drop in China (Dec 26)

According to the fixed-point price monitoring data of the farm direct reporting platform of the Ministry of Agriculture and Rural Affairs, the price of live pigs has shown a continuous decline in the past two months. It has been close to USD 2.18/catty (15 yuan) since mid-to-late October, and has dropped by nearly USD 0.87/catty (6 yuan) so far. The price of fattening pigs in our county in W51 was only about USD 1.31/catty (9 yuan), which was nearly 40% lower than the highest price in mid-to-late October, while the price of feed raw materials remained high, and the current pig breeding profits have shrunk greatly.

Meat Markets China Will Change Over the Next Ten Years (Dec 31)

After a few turbulent years in China in terms of meat production and consumption, a more stable period seems to have arrived. The Chinese government expects to need 55 to 56 M MT in the coming years to supply the Chinese population with pork. Despite a growing population, the dependence on pork appears to have decreased in recent decades. The eating habits of the Chinese have changed, which means that other types of meat are on the table more often. Drivers of this shift are income development, population structure, pork price fluctuations and the corona pandemic. Due to rising incomes, the Chinese can introduce more variety in their meat consumption.

Portugal

Sardinia Reopens Pork Trade (Dec 28)

For the first time in decades, trade in pigs and their products from certain areas of the Italian island of Sardinia will be allowed without health restrictions, under the control of the competent authorities. The new measures also subject various areas to less stringent restrictions than previously, as long as they remain in a localised area. The measure reopens trade for 84% of Sardinia's pig production, according to statements by the President of the region, Christian Solinas.

Thailand

The Arrest of Cambodians Smuggling Pork Into the Country (Dec 27)

On December 26, Mr. Phanthong Loykulnan, Deputy Director General of the Customs Department Acting in the position of tax development and management consultant as a spokesperson for the Customs Department revealed that in the case of smuggling of pork and pork parts originating from foreign countries to be sold in the Kingdom of Thailand, the Customs Department, therefore, requires officials in various areas to be strict in searching the point. There is a risk of smuggling pork and pork parts into the country. This aims to prevent the spread of ASF that affects the health of consumers. The Customs Department has been informed that slaughtered pork will be smuggled from the Cambodian side into the country along the Thai-Cambodian border in Ban Nong Ian, Tha Kham Sub-district, Aranyaprathet District.

Vietnam

Thousands of Meat Pigs Returned to the Wholesale Market, and the Price of Live Pigs Didn’t Rise (Dec 28)

According to Mr. Nguyen Van Chinh, Manager of Ha Nam Livestock and Poultry Wholesale Market, the number of pigs brought to the market is high, supply is exceeding demand. Most people go to the market to buy pigs for small slaughter, mainly in neighbouring provinces (Nam Dinh, Thai Binh, Hung Yen). The quantity sold to slaughterhouses in Hanoi is very small, about 1 car per day with the quantity of 100 animals. Therefore, the price of live hogs sold at the market is at a stable level, lower compared to a few months ago.

Live Hog Prices (Dec 31)

In the North, specifically in Bac Giang and Hung Yen provinces, the price of live hog was purchased with the highest price in the country at USD 2.30/kg (54,000 VND). In the provinces of Ninh Binh, Ha Nam, Nam Dinh, Phu Tho, Tuyen Quang, Thai Nguyen, Thai Binh, Vinh Phuc and Hanoi, live hog prices ranged from USD 2.21/kg to USD 2.26/kg (52,000 to 53,000 VND). In Yen Bai and Lao Cai provinces, live hog prices were the lowest in the region at USD 2.17/kg (51,000 VND). Thus, on December 31, live hog prices in the North fluctuated in the range of USD 2.17/kg to USD 2.30/kg (51,000 - 54,000 VND).

Argentina

First Export of Pork Products to Singapore (Dec 30)

The first Argentine shipment totaled 26MT, of liver (23MT) and frozen fat (3MT) that left the port of Buenos Aires bound for Singapore. Last August, the Singapore Food Agency (SFA) communicated acceptance of the latest proposal for the International Veterinary Certificate (IVC) sent by Senasa, with immediate effect, with agreement on the requirements for the export of meat, offal and pork products processed and transformed from Argentina to the Asian country. So far, in 2022, Senasa has certified the export of more than 12.2K MT of pork products and derivatives to different destinations.

South Africa

Pork industry anticipates growth amid price challenges (Dec 26)

Over the course of 2022, pork production has increased by 9.2%. However, pork producers remain under profit pressure due to high feed prices. Since March 2022, pork prices have remained at approximately six times that of the price of maize, 33% below the long-term average. "Between 2015 and 2022, the average market price of pork increased by 10%. However, in real terms it has decreased by 24%. This highlights the all-time low point in profitability that pig producers experienced in 2022", says Nico Scheltema, head of business intelligence at the South African Pork Producers' Organization (SAPPO). Moreover, it became evident that the pig industry's licence to operate will be a subscription to a dual strategy that compensates for the variance in the nature and magnitude of risk across the primary production landscape.

Bulgaria

Bulgaria Recovers From 2019 African Swine Fever Crisis (Dec 26)

According to a recent USDA GAIN report, in 2021 and 2022 to date, the Bulgarian livestock industry has successfully recovered following the 2019 African swine fever (ASF) crisis. The major challenges in 2021/22 were related to sharply increasing feed grain and energy prices, skyrocketing inflation, and fluctuations in consumer demand related to the pandemic and the war in Ukraine. Bulgaria’s political stalemate negatively affected domestic support policies, but despite these challenges, commercial pork farmers have rebounded. Most backyard farmers have stopped raising pigs. Consumer demand has improved due to stabilisation of the hotel, restaurant, and institutional (HRI) industry, and better travel and tourism seasons, with beef and pork consumption growing by double-digits and reaching record high consumption levels in 2021 and most likely in 2022.

Paraguay

Pork Exports Growing in Paraguay (Dec 30)

Paraguayan pork exports are looking at a brighter future for 2023, according to various positive developments on various fronts over the past few months. National Animal Health and Quality Service (Senacsa) President José Carlos Martín Camperchioli highlighted the resumption of pork shipments to Russia in November after almost three years, despite some nuisances.

Ukraine

Ukraine’s Pork Is in Third Place Among Available Types of Meat (Dec 26)

In the second half of this year, pork lost its position as the second most affordable type of meat for the population. Average retail prices for pork are already higher than chicken and turkey. This was noted by Oleksandra Bondarska, head of the analytical department of the "Swinemakers of Ukraine" association. According to her, despite the downward dynamics of prices for pig carcasses in recent weeks, there is convergence with poultry meat, but so far pork is in third place. As reported, pork production is expected to be 625K MT in 2022.

The Leaders of the Pork Market Were Identified in Ukraine (Dec 27)

The Association "Swine Farmers of Ukraine" named twenty key market operators that provided about 60% of the industrial supply of pork and received at least 66% of the number of main sows in the industrial sector as of the beginning of the year. Most pork producers are more or less autonomous in terms of providing feed: most of them have arable land, grow cereals, have a feed mill in the enterprise structure, and buy soybean or sunflower meal/meal, as well as premixes. There are at least 10 large producers that are part of vertically integrated companies, some of which include not only meat processing but also retail. They occupy the first places in the rating.

National Study of Swine Disease Risks During Wartime (Dec 29)

The Association "Swine Farmers of Ukraine" (ASU) in cooperation with the Department of Agriculture of Foreign Countries of the US Department of Agriculture (FAS USDA) is implementing the project "Ensuring animal health in Ukraine" in Ukraine.The biggest direction of the project is research on the identification of the risks of the spread of diseases in the pork production chain. As part of cooperation with the State Production and Consumer Service, a survey is planned among 550 market players (industrial farms, households, hunting grounds, territorial bodies of the competent authority, private veterinarians and collectors) in order to assess the risks of the spread of swine diseases, including African swine fever (ASF), compliance with biosecurity protocols, as well as the practice of using antimicrobial drugs in wartime conditions.

Before the New Year, Pig Carcasses in Ukraine Rose in Price to USD 1.91/KG (Dec 29)

In W52 Of 2022, purchase prices for slaughter pigs continued to rise. The average selling price stood at USD 1.91/kg (UAH 70.15), which is 2.2% higher than a week earlier. A number of operators entered the market with smaller supply volumes. Against the background of this and more lively procurement activity, prices for pig carcasses increased by USD 0.014-0.0068/kg (UAH 0.5-2.5), as compared to the previous week. In all regions, the prices agreed, because most of the product lots were sold in the range of USD 1.88- 1.93/kg (UAH 69-71).

South Korea

Consumer demand for pork, beef in South Korea strengthens (Dec 26)

The ongoing revival of South Korea’s food service sector strengthened consumer demand for beef and pork in 2022, according to a recent USDA GAIN report. This positive trend is expected to continue in 2023 as Korea’s hotel, restaurant, and institutional sectors gain momentum in a post-Covid market. However, the pace and scale of food service growth is unclear as the country grapples with notable macroeconomic challenges such as inflation and a depreciating currency. Swine production will wane over the first half of 2023 on high input costs. Large import volumes for beef and pork that were witnessed in 2022 are expected to remain elevated in 2023.

Colombia

Singapore Is a New Destination for Pork Exports (Dec 27)

As a result of a coordinated effort between the National Institute for Food and Drug Surveillance (Invima) and the Colombian Institute of Agriculture (ICA), three Colombian establishments will be able to export frozen pork and corned beef meatballs in sauce to Singapore. This achievement is the result of an admissibility process that began in 2018 and which culminated recently, after exchanging information with the health authorities of Singapore and agreement on a model of health certificate for export. In addition, the Singapore Food Agency (SFA) carried out an in-country audit that included verification visits to primary production farms and processing establishments such as processing, boning and meat processing plants.

Taiwan

Taiwan on Track to Be First East Asian Nation to Eradicate Swine Flu (Dec 30)

The Chairman of Taiwan’s Council of Agriculture (COA), Minister Chen Chi-chung on December 30 announced that Taiwan is on track to be declared a swine flu-free nation by 2024, and to become the first Asian nation to eradicate swine flu. Chen said that starting on January 1, 2023, pigs bred for meat in Taiwan will no longer need to be vaccinated against swine flu.

Taiwan Plans to Reintroduce Its Pork to International Market (Dec 30)

Taiwan plans to reintroduce its pork to the international market pending no reports of swine fever and gradual vaccine withdrawal during the next year. The Agricultural Council announced in a press release on Friday that it will start the process towards non-infected status in 2023. The World Organization for Animal Health (WOAH) classified Taiwan as a non-epidemic area for swine fever, or foot-and-mouth disease, in June 2020.