W5: Weekly Pork Update
Global
Updated Estimates for World Pork Production in 2023 (Jan 30)
The USDA recalculates the final figures for 2022 and its estimates for 2023, predicting an increase in world pork production for this year due to the increase in China's domestic demand. China's domestic demand is expected to increase as a result of the lifting of COVID-zero policy restrictions. Strong demand from Asian countries will contribute to an increase in world pork exports, with the European Union, Brazil and the United States being the main suppliers. Latin America will show the greatest regional growth, with production reaching 8.05M MT, which will represent an increase of 2.5% compared to 2022 (7.86M MT). Likewise, the volume of exports will grow by 4.7%, consolidating at 1.9M MT, while imports and apparent consumption will increase at a rate of 0.1 and 1.4%, respectively. Asia will increase its production by 0.2%, reaching 62.4M MT, due to increased domestic supply from China and Vietnam. On the other hand, an increase in the volume of imports of 1.8% is projected, which will stand at 5.7M MT.
Global Pork Exports Face Uncertainty With Volatile Demand in 2023 (Feb 1)
Rabobank’s Global Pork Quarterly report for the first quarter of 2023 warned of volatile pork demand as a consequence of the global recession. Although pork, as a less expensive protein, will likely not be as affected by the slowing economy as other meats, it will still experience pressure. In 2022, pork imports increased across most markets, particularly those to Mexico, South Korea and the Philippines. China, however, saw import volume and hog prices decline significantly. In the coming year, tighter supply is predicted, leading to limited global pork trade. European pork production fell by more than 5% last year from the previous year. In October 2022, production dropped by 10% in Germany, 9% in Poland, 5% in Denmark, 2% in Spain, 2% in France and 0.5% in the Netherlands. The United States is forecasted to increase pork production slightly by 0.2% in 2023. Additionally, US pork exports will likely remain steady to China and Mexico, the latter of which imports 81% of its pork from the United States.
Pork Producers Cautious on Rising Uncertainties (Feb 4)
Slowing economy weighs on demand, raising uncertainties and volatility. In a slowing economy, while pork is believed to be less impacted than more expensive proteins, there will still be some pressure on consumption. Pressure on household incomes, increased savings, and a potential decline in specific channels can all pressure consumption. Managing inflation will remain important for many governments, with interest rates needing careful calibration against consumer and business confidence. The US herd is at an inflection point as the US herd returns to growth, but growth slows in Mexico and Canada. Exports are stronger from the US and Canada as pork is competitive in key markets. In the EU, pork production is set to tighten further in 2023, with few exceptions. Pig carcass prices remain supported by tight supply and high input costs. In China, pork prices plunge on short-term volatility, oversupply and weak demand on high COVID infection numbers. Demand expected to rebound late Q1. Easing feed prices in Brazil should improve margins but there is a need for stronger Chinese demand to balance supply growth. Southeast Asia will see strong production growth despite ASF impacts and high input costs in 2022. Continuous growth expected in 2023. Japanese pork consumption manages to remain flat and storage capacity will not allow import to increase.
Spain
Union of Unions Requests Aid for Pig Farmers Due to the Increase in Costs (Jan 30)
Union of Unions assures that the market price of pigs rose 17% in 2022 while the cost of feeding grew 37%. According to the organization, "farmers do not make a profit from their meat." According to their calculations, animal feed accounts for 70% of the production cost in the case of non-integrated farms. If they are integrated with a company, their costs also increase, especially in terms of energy. For this reason, Union of Unions claims that at the state level the sector has been left out of aid intended to alleviate the economic consequences of the war in Ukraine and urges the Administration to provide more support
The Commitment of the Spanish Pork Sector to Create a Green Spain (Jan 31)
In order to put the real scope of the environmental impact of pork production in context, it is necessary to indicate that its contribution to total Spanish GHG emissions is only 2.64%, measured in CO2 equivalent. However, the efforts of the sector to reduce the environmental impact are not limited to GHG emissions, but extend to numerous fields, aspects or factors related to the activity of the pork sector: water consumption, electricity (use of renewable energies) and fuel consumption, consumption of nutrients and more. In fact, few agri-food sectors have made as many efforts and have made as many advances in the defense of the environment as the Spanish pork sector, which in the last ten years has reduced GHG emissions per kg of meat produced by nearly 40%; those of ammonia by 35%; and by 30% the consumption of water.
United States
US Pork Meat Production Rises (Jan 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, rising to USD 2.84B (2.351B pounds) from USD 2.83B (2.338B) the previous month, the government said. November production also increased from USD 2.83B (2.338B pounds) produced in the same month in 2022.
Lean Hog Futures End Mixed (Jan 31)
US lean hog futures were mixed on Jan 30, with nearby February futures easing and Benchmark April hogs firming. February lean hog futures eased 0.725 cents to USD 1.66K/MT (75.15 cents/lb), while most-active April hogs added 0.075 cents to USD 1.91K/MT (86.525 cents/lb). The CME's Lean Hog Index, a two-day weighted average of cash hog prices, added 12 cents to 72.64 per cwt. Hog processors slaughtered 491K head on Jan 30, the USDA said, up 2K head from the same period in W4. The USDA reported pork carcass prices at USD 80.28 per cwt on Monday, up USD 1.03 from Jan 27.
US Pork Production Decline in 2022 (Feb 1)
US pork production in 2022 fell by about 309K MT, down 2.5%, to 12.24M MT. The number of pigs slaughtered was lower by 3.67M, down 2.8%, and amounted to 125.3M heads. The animals were slaughtered with an average live weight of 131.0 kg, which was more than half a kilogram more than in 2021. The USDA forecasts a 1.8% increase in pork production in 2023, leading to a production volume of 12.5M MT. When the December inventory was taken, producers said they had invited more sows in the first half of 2023 than in the same period last year, suggesting a greater supply of slaughter hogs in the second half of the year.
Germany
Huge Rise in Fattening Pig Prices (Feb 2)
On Feb 1, listing of the German stock exchange for live pigs finally ended with the increase in prices expected by all pig breeders. The session ended with a result of USD 2.23/kg (EUR 2.08) half-carcass with a meat content of 57% (equivalent to our E-class). This means that over the past week the price for fattening pigs in Germany increased by USD 0.086 (8 euro cents). The German recommended price is currently USD 2.22/kg (PLN 9.80) compared to USD 2.13/kg (PLN 9.42) net in W4.
Pig Herd Lowest Since the Fall of the Berlin Wall; The Number of Farms Is Also Falling (Feb 3)
A catastrophic trend in the German pig production industry continues. As reported at the end of December by the Federal Statistical Office of Germany (Destatis), over the first ten months of last year, nearly 2K breeders gave up pig farming. Currently, the number of pig herds in Germany is about 16.9K, which means that over the decade, the Germans lost nearly half (about 13K) of their farms. The pig population in Germany is declining in the period of the first ten months of the year, the total number of pigs dropped drastically. Currently, around 21.3M pigs are bred in Germany, 10% more than in the previous year, less than at the beginning of the year. The reduction of the sow population is even greater, it is about 12%, almost 1.4M animals.
Denmark
Significant Price Increases for Danish Weaners (Feb 2)
The prices of weaners on the Danish stock exchange rose again. This is the third week of growth. Negative PRRS piglets were valued at USD 82.99/head (DKK 575.00), and PRRS positive piglets at USD 79.38/head (DKK 550.00). The rates apply to weaners weighing 30 kg. Compared to prices from the same period last year (W6), the current prices for weaners are higher by USD 50.52- 51.24/head (DKK 350-355) depending on health status. In turn, compared to W4, the current rates are higher by USD 4.33/pcs (30 DKK) in all health statuses. Current rates for Danish weaners as of Feb 2, the rate for weaners with negative PRRS status is USD 82.99/unit (DKK 575.00), compared to USD 78.49/unit in W4. The rate for weaners with a positive PRRS status is USD 79.38/unit (DKK 550.00), compared to USD 74.89/unit last week.
Netherlands
Dutch Pig Farming, Better Prospects Due to Tighter Supply in Europe (Feb 3)
Sufficient earning capacity of a company and a good income for entrepreneurs are an important basis for continuity and for making sustainability or transition affordable. The margins of pig farming were under pressure in both 2021 and 2022. The sector is now opportunistic about market expectations for the coming year. The contraction in pork production in the 27 EU countries and the UK will continue in 2023, with an expected decline of 3 to 4% YoY. In the period January-October 2022, production in the 27 EU countries and the UK fell by 5.1% YoY. This was due to a drop in production in Germany by 10%, in Poland by 9%, in Denmark by 5%, in Spain by 2%, in France by 2% and in the Netherlands by 0.5%.
Brazil
Santa Catarina Breaks Record in Pork Exports in 2022 (Feb 2)
In 2022, Santa Catarina achieved the best results in pork exports since the beginning of the Epagri/Cepa historical series. Last year, the State exported 602.14K MT of pork (carcasses and parts, industrialized and offal), a growth of 4.1% compared to 2021. Revenues were USD 1.43B, which represents an increase of 2.5% compared to 2021. China, the main destination, registered a drop of 10.6% in quantity and 13.1% in value, compared to the previous year. Chile and Hong Kong also recorded significant declines in purchases of pork from Santa Catarina, especially when considering revenues: -9.1% and -41.8%, respectively. These reductions were offset by growth in exports to other relevant destinations, such as the Philippines (138.5% increase in volume and 164.1% in revenue) and Japan (80.4% and 67.4%, respectively).
Brazil Needs Stronger Chinese Demand to Balance Supply Growth (Feb 2)
According to Rabobank's Pork Quarterly Q1 2023 report, the seasonal drop in pork demand is expected to impact supply in the first quarter of 2023. Recent data show that production in the third quarter of 2022 followed a seasonally upward trend, with an increase of 1.8% compared to the second quarter of 2022 and 4.3% compared to the previous year. The bank claims that lower feed prices supported producer margins during this period. In the fourth quarter of 2022, higher live hog prices supported pork demand. However, the unusually cold weather in the Center-South region negatively impacted travel and group meetings and, in turn, affected consumption. Fall in feed price improves production margin. Rabobank Analysts project pork production in 2023 to increase 4% to 5% YoY. For the first semester, the bank foresees that pork production will decrease in relation to the previous quarter. The first quarter usually marks the seasonal low of domestic demand (school holidays, annual taxes) and external demand, driven by the slowdown in shipments to China.
Brazil Sees Record High Cost of Production (Feb 3)
The year 2022 ended with a production cost per kilo of live pig of USD 1.55 (8.07 Brazilian reais). This is the highest value ever recorded by Embrapa (Brazilian Agricultural Research Company). Production costs reflect both technical productivity coefficients and market prices of inputs and production factors and, in the case of swine, are calculated based on a farrow-to-finish system in Santa Catarina, the state used as a national reference. This also caused the Swine Production Cost Index (ICPSuíno) to reach a new record score of 461.90 points. Compared to November, the index increased by 1.09%, closing 2022 with a cumulative increase of 15.33%. The cost of feed, with an increase of 0.96% and making up 79.59% of the total cost, had the greatest impact on the cost index in December.
Belgium
Sharp Decrease in Pig Slaughter (Feb 1)
In December 2022, 867.58K pigs were slaughtered in Belgium, 13% less than in December 2021, according to data from the Belgian statistics agency Statbel. The decrease in the pig herd is estimated at 4.9% for 2022 going from 6.145M pigs in 2021 to 5.847M pigs in 2022. The majority of Belgian pigs are kept in Flanders (94%). Experts see the declining figures as evidence of the poor market conditions and poor prospects for the future in the sector. The crisis in pig farming has been going on for almost two years now. The lack of exports to Asia, among others, as a result of swine fever in the EU, has led to a large surplus on the European market and ailing figures as a result.
The Belgian Pig Sector Is Committed to Creating a Single Index to Adjust the Prices of Cattle (Feb 2)
The Belgian Meat Federation (FEBEV) and the Federation of Meat Products Manufacturers (Fenavian) will work together to integrate their pork index, the Meatindex and Vindex, respectively. According to both organizations, the combined index should be a better representation of the evolution of the market and thus contribute to greater transparency in the sector. "The unified index can also be a more powerful tool in negotiations with the retail sector," they hope. The index integration process was preceded by two years of preparation. Belgian organizations such as Pork.be say they are satisfied with this new integrated index.
Mexico
Pork Production Grew by 2.6% In 2022 (Feb 2)
Pork production for the month of December reached 162.91K MT. Despite the fact that the volume in December was the highest recorded in 2022 and that it represented an increase of 4.3% compared to last November, it also showed a reduction of 0.2% compared to the same month of 2021. The annual consolidated indicates a growth of 2.6%, given that it went from a production of 1.687M MT in 2021 to 1.730M MT in 2022, which reached 99.6% of the 1.737M MT with which it was expected to end the year. Compared to other animal proteins, poultry meat production had the highest growth in 2022 with 3.3%, followed by pork (2.6%) and beef with 2.3%.
United Kingdom
Prices Up, Throughput Down for GB Deadweight Pigs (Feb 2)
GB deadweight pig prices have continued moving upwards in January, with all but W1 (w/e 7 Jan) recording new records for the SPP. For the four weeks ending Jan 28, the EU spec SPP averaged 202.34p/kg, up 1.75p/kg on the December average. Although the fall in prices in the first week came as a surprise to some, prices recovered with growth in week 2 (+1.65p) balancing out the decline and a significant increase in week 4 (+2.26p), which saw the SPP at its highest ever value of 204.78p/kg. This means that the EU spec SPP (w/e 28 Jan) was sitting nearly 70p above prices from this time last year and 60p above the 5-year average.
January Sees Huge Dip In Pig Slaughtering, as EU Numbers Also Decline (Feb 2)
Estimated GB pig slaughter was significantly down in January, compared with average volumes for the month, as pig supplies tighten significantly on the back of last year’s herd contraction. For the four weeks ending 28 Jan throughputs totaled 629.5K head, a decline of 22.3K head compared with the previous four weeks. Weekly throughputs averaged at 157.4K head, significantly lower than the numbers seen a year ago (-12.9K head) and the 5-year average (-17.2K head). Indeed, weekly throughputs for January are among the lowest full week throughput figures seen for a very long time. This supports wider industry commentary that the supply of finished pigs is beginning to run tight, according to AHDB analyst Freya Shuttleworth.
Meanwhile, the latest production data from the EU Commission, dating back to the autumn, shows that YoY EU pig meat production is down compared to last year. Total pig meat production in October was 1.79M MT, 6.1% down, compared to October 2021, with the total volume of pig meat produced in the EU for the YTD down 18.3MT, a decline of 5.2% YoY and inline with the EU forecast.
More Opportunities for UK Pig Farmers (Feb 5)
Defra’s major announcement on its new environmental schemes does not deliver many obvious benefits for pig farmers, but other funding streams should become increasingly available soon, according to the National Pig Association (NPA). Six new standards will be added to the Sustainable Farming Incentive in 2023. They cover hedgerows, grassland, arable and horticultural land, pest management and nutrient management, building on the three introduced in 2022 to improve soil health and moorlands. However, while many pig units are part of wider farming enterprises, there is very little in there specifically for pig producers so far, although further detail of how the scheme will work is still needed.
China
China Halved Pork Imports in 2022 (Jan 30)
According to the National Bureau of Statistics of China, pork production in 2022 increased to 55.41M MT, up 4.6% compared to 2021. The number of pigs sent for slaughter increased by 4.3% compared to 2021 and reached 700M heads. China's pig herd reached 452.56M at the end of 2022, up 0.7% from December 2021, according to official statistics. Data from China's General Administration of Customs shows the country cut pork imports last year by 53% from 2021 to 1.76M MT.
Pig Prices in China (Jan 30)
Looking back at China pig prices in 2022, slaughter pig prices dropped from USD 2.36/kg (16 yuan) in January to a low of USD 1.77/kg (11.98 yuan) March 18, 2022. During this time China producers were losing huge sums of money ranging from USD 50/head (340 yuan) to USD 175/head (1000 yuan) depending upon actual costs of production and financial indebtedness. Compounding the situation was the fact that producers were losing money going back to the second quarter of 2021. On December 7, 2022, China lifted pandemic control policies. On December 9, 2023 slaughter pig price was USD 3.32/kg (22.54 yuan) and dropped to USD 2.17/kg (14.71 yuan) by January 13, 2023. As a result of declining demand for pork, producers decided to abandon normal marketing practices and sell early. There are reports of slaughter weights dropping by 11kg, but still more kg’s of pork on the market.
According to an analysis released by the European bank Rabobank regarding the supply, consumption and global trade of pork in the first quarter of 2023, the demand for pork in China, weakened due to the last serious wave of cases of Covid-19, establishment of restrictive policies movement of the population, and the high supply of heavy animals for slaughter. This brought down prices and demand for protein. The forecast is that this volatility seen in the Asian giant for the pork sector should continue during this first quarter of the year, and start to show signs of improvement in demand at the turn of the second quarter of 2023.
Yifeng County, Jiangxi Carried Out Law Enforcement Inspections of Pig Slaughtering (Feb 1)
In order to maintain the order of the pig slaughtering industry during the Spring Festival and focus on ensuring the quality and safety of meat products, on January 12, the Yifeng County Agricultural Comprehensive Administrative Law Enforcement Brigade conducted a law enforcement inspection on the designated pig slaughterhouses in the county. Focusing on whether the slaughtering system and ledger of the designated slaughterhouses have been established, it is sound, the inspection of live pigs entering the farm and the slaughter and quarantine are compliant, and more. Law enforcement officers require the slaughterhouse to rectify the problems found on the spot immediately, review and inspect from time to time, and e to implement the main responsibility, do a good job in the inspection of livestock and poultry entering the field, and effectively strengthen African swine fever.
Chinese Pork Production Increased by 4.6% In 2022 (Feb 1)
In 2022, nearly 700M fattening pigs were slaughtered in China. That means an increase of 4.3% compared to 2021. Pork production in China in 2022 amounted to 55.41M MT, an increase of 4.6%. China's pig herd stood at 452.56M animals at the end of 2022, 0.7% more than at the end of 2021. Approximately 43.9M breeding sows are currently kept, 1.4% more than in 2021.
Trend of meat imports in 2023 (Feb 3)
In 2020, deeply affected by the occurrence of African swine fever, China imported just over 9M MT of meat, which meant, in two years, an increase not far from 200%. The biggest increase fell on pork, whose imports increased by 262%. In a two-year period, beef volume increased by 103% and chicken by 192%. With the gradual overcoming of the disease, imports retreated in the last two years, trending now towards stabilization (the forecast by the USDA is an increase of only 1.63% compared to imports last year).
Portugal
Breeding Sows Drops by 8.3% In December 2022 (Feb 2)
Preliminary data published by IFAP and relating to the number of pigs in Portugal, shows that the total number, in December 2022, was 2.185M head, which represents a reduction of 1.47%, 32.63K head less than in December 2021 (2.217M head), and a reduction of 0.38%, 8.36K head compared to August 2022 (2.193K head). With regard to breeding sows (primiparous, multiparous and lactating), for the first time since there are records that the herd was less than 190K sows, even below 180K breeding sows. Thus, the herd in December 2022 was 177.65K head, -8.3% (16.07K head) than in December 2021 (193.71K) and -7.5% (14.41K head) less than in August 2022 (192.06K sows). In relation to non-mated gilts, the total was 23.09K heads in December 2022, 0.4% higher than December 2021 (22.99K) and 8.1% higher than August 2022 (21.36).
Vietnam
African Swine Fever Vaccine to Be Distributed in Vietnam (Feb 2)
The Vietnam-produced African swine fever (ASF) vaccine is expected to be distributed across the country later this month. In early January, the first four batches of the vaccine produced in 2022 were tested and met quality requirements. Pilot injection of 600.54K pigs was performed on 545 farms and 5,958 samples were collected for testing. The results showed that 93.34% of the samples met the technical requirements. Deputy Minister of Agriculture and Rural Development Phung Duc Tien requested the vaccine producer (AVAC Vietnam) to continue to assess the level of immunity of the vaccine after injection and provide strict guidelines and recommendations for livestock farmers.
South Africa
South Africa Reports Outbreak of African Swine Fever (Jan 30)
South Africa's Department of Agriculture, Land Reform and Rural Development announced a new outbreak of African swine fever (ASF) on a farm in Gauteng Province. The farm has been put under quarantine and the Provincial Veterinary Services instituted forward and back-tracing investigations to identify any properties that could have had direct or indirect contact with the affected farm. Farms in Gauteng, North West and Free State Provinces have been placed under precautionary quarantine as a result of this. The ASF negative status of these farms must first be confirmed before the precautionary quarantine can be lifted.
Latvia
New ASF Outbreaks Hurt Pig Companies in Latvia (Feb 3)
Latvia experiences the second wave of ASF, Matrins Sergeants, head of the infectious disease department of the Food and Veterinary Service (PVD), reported. After a relatively calm couple of years, Latvia saw a spike in the number of outbreaks. These tripled in 2022 compared to 2021. He added that the situation varies drastically among Latvian regions. In September, PVD started paying a reward of USD 32.21 (€ 30) for GPS coordinates directing them to the corpses of wild boar in a bid to tackle the spread of the virus. At that time, the veterinary services registered 20 wild boar that died from ASF per week. ASF is not only killing wild boar. One outbreak last year was registered at a commercial farm with a pig population of around 1.4K animals, Sergeants disclosed.
Peru
SENASA Will Vaccinate More Than 2M Pigs in 15 Regions of Peru (Jan 31)
For the benefit of 265.37K pig farmers, the National Agrarian Health Service (SENASA), an entity attached to MIDAGRI, began the vaccination campaign against Classical Swine Fever (CSF) in 15 regions of the country. In 2023, their main goal is to vaccinate 2.517M animals that are in Amazonas, Ancash, Ayacucho (partially), Cajamarca, Huancavelica, Huánuco, Ica, Junín, La Libertad, Lambayeque, Lima - Callao, Pasco, Piura, Tumbes and VRAEM. Vaccination is the most effective measure to prevent swine from being infected with this disease. For this reason, the willingness of pig breeders and breeders is essential so that they can actively participate in these campaigns.
Taiwan
Taiwan Set to Be First East Asian Country to Eliminate Classical Swine Fever (Jan 31)
The chairman of the Taiwan Council of Agriculture (COA), Minister Chen Chi-chung, announced that Taiwan is on track to be declared a Classical Swine Fever free nation by 2024 and become the first Asian nation to eradicate the disease. Pigs raised for meat in Taiwan no longer need to be vaccinated against CSF. The AOC also plans to suspend all vaccination programs for breeding pigs through July 2023.