W13: Weekly Pork Update
Global
In the World Pork Market, US Prices Fall as China Increases Imports (Mar 28)
Pork futures prices in the US fell sharply in the past two weeks, causing the market to fall into a state of massive selling, potentially falling to the bottom of the market. The latest CME Pork Price Index dropped another 84 cents, marking a USD 2.18 drop over the past three days. Despite the sharp decline in the futures price relative to the spot price, the April 2023 delivery futures contract is facing downward pressure, with traders anticipating a near-term decline in the spot price. Pork products are facing difficulties on both sides of supply and demand. The number of pigs slaughtered last week increased by 2.75% YoY, showing that the current supply of pigs is far exceeding forecasts. However, the retail price of pork is still much higher than the previous year although the value of live hog and wholesale pork has fallen sharply compared to the same period last year. Therefore, it is difficult to stimulate consumer demand when retail prices are still high.
In the first 2 months of 2023, China imported 380K MT of pork, up 35.8% over the same period in 2022. China's pork imports increased at the end of 2022 and are expected to increase in 2023, especially as the country is battling a new outbreak of African swine fever. The disease that previously killed off nearly half of China's pigs is resurging, potentially driving up prices for the country's favorite meat. Rabobank said the outbreak was quite severe in January and February and the latest will cut production capacity and push pork prices higher in the second quarter of 2023. It is predicted that, in the next week, the price of pork for April delivery will reach USD 75-81 and tend to move sideways.
Europe
Resumption of Price Increase for Pork in Northern Europe (Mar 27)
Preparations for the Easter holidays are boosting trade and allowing supply markets in northern Europe to finally emerge from their lethargy after a month of systematically renewed prices. In Germany, the weakness of supply is particularly acute in certain regions and a resurgence in demand linked to the upcoming Easter holidays and more spring-like weather finally unbalanced the market and led to a rise of 5 cents in the official benchmark. Trade is more dynamic, particularly for the countries of Eastern and Central Europe for certain items such as ham traditionally served at the time of the Easter celebrations. The number of pigs slaughtered in Germany is stable, the fluidity in the farms is very good and the weights are falling. In Belgium, demand on the domestic market is still timid, but sales of half-carcasses to Eastern European countries are very satisfactory and allow price increases.
The EU Exported Less Pork in January Than a Year Ago (Mar 28)
European pork exports to third countries (excluding the United Kingdom) in January 2023 have decreased compared to a year ago, according to the latest data published by Eurostat. The total volumes exported amount to 319.69K MT, therefore, a decrease of 12.8% compared to January 2022. Exports to the main destinations have fallen, as a result of the drop in production in Europe and the difficulty of competing with the most attractive prices in other destinations such as the United States, Canada, and Brazil. To China, the main destination, 123.65K MT has been exported, which is 4.1% less.
EU Pig Herd Continued to Decline in 2022 (Mar 29)
All EU member states with more than 3 M registered pigs declined, with two exceptions: Italy (+330K head, +4% compared to 2021) and Sweden (+50K head, +3%). Germany and Denmark experienced declines in their pig herds equivalent to more than half the overall EU reduction. The decrease in Germany is equivalent to 33% of the global reduction in the EU (-2.4M head compared to 2021; -10%). The decrease in Denmark is equivalent to 22% of the overall reduction in the EU (-1.6M head, -12%) and in France, the reduction was 758K head. Spain, with uninterrupted increases since 2013, also suffered a decrease, albeit on a smaller scale (-379K head). Bulgaria and Malta (-26%) recorded the largest relative decreases.
Spain
Spanish Pork Gained 12% Share of the Meat Market in Peru (Mar 31)
The Spanish pig sector is a world leader that has gained market share in Peru in recent years. Indeed, since SENASA (Peru's National Health Service) recognized the equivalence system for inspection and control of pork meat and offal in Spain in November 2020, exports from that country have grown enormously. If that year there were barely 100MT worth USD 1.31M (1.2M euros), in 2022 there were 1.708K MT worth USD 6.16M (5.65M euros). Today, Spain, with a 12% share, ranks fourth in countries that export pork to Peru after Chile (36%), Canada (26%), and the United States (12%). It is an evolution in line with the one followed by Spanish pigs in the world in the last 25 years. In this period, it has undergone a profound transformation that has made it the third-largest producer in the world and the second in the ranking of exports, only behind the US and by very little.
United States
USDA Reports Some Expansion in US Hog Inventory (Mar 30)
The USDA’s Quarterly Hogs and Pigs Report shows some short-term expansion. The US swine inventory on March 1st of 72.86M head was down 2% from the last quarter due to a revision in the USDA data, but that is slightly larger than this time last year. That included modest YoY increases in both the breeding and the marketing herds, to 6.127M and 66.734M head, respectively, along with a slightly larger pig crop of 32.1M head and a record number of pigs per litter at 11.02, against a fractional decrease in the number of sows farrowed. Projections for farrowing intentions for March through May and June through August are both down 3% from the same period in 2022. Contract hogs on operations of more than 5K heads made up 51% of the US inventory, 2% above a year ago. The numbers were very close to what some analysts were expecting ahead of the report and could be bearish near-term, and bullish long-term, but that will depend on farrowing efficiency and pork demand.
Weekly USDA US Pork Export Sales (Apr 1)
Net sales of 30.4K MT for 2023 were down 20% from the previous week and 4% from the prior 4-week average. Increases were primarily for Mexico (14.6K MT, including decreases of 300 MT), Japan (4.1K MT, including decreases of 300 MT), Australia (2.2K MT), Canada (1.6K MT, including decreases of 500 MT), and South Korea (1.5K MT, including decreases of 600 MT). Exports of 32.4K MT were up 6% from the previous week and 7% from the prior 4-week average. The destinations were primarily Mexico (12.8K MT), China (4.6K MT), Japan (4.6K MT), South Korea (3.3K MT), and Canada (1.7K MT).
Germany
German Meat Exports Fall 19% In the Last 5 Years (Mar 29)
According to data from the Federal Statistical Office (Destatis), in 2022 Germany exported almost 2.9M MT of meat and meat products, mostly to other EU countries, a drop of 6.9% compared to the previous year. Over the past five years, meat exports have fallen by 19.3%. In 2017, Germany exported almost 3.6M MT of meat. 1.5M MT of pork was exported in 2022 (50.5% of total exports), down 20.4% over the past five years. A similar trend can be observed in meat imports; in 2022, Germany imported 2M MT of meat, mainly from other EU countries, which represents a 4.5% decrease compared to the previous year. Over the past five years, meat imports have fallen by 15.9%. In 2017, Germany imported 2.4M MT of meat. There is also a clear drop in the amount of imported pork; it fell by almost a quarter (-23.4%) from 2017 to 2022. In 2022, around 701.4K MT of pork was imported.
Canada
Alberta, Canada Hog Market Update (Mar 30)
According to Statistics Canada, as of January 1, 2023, the total hog inventory for Alberta was 1.53M head, down 2.5% compared to January 2022. The breeding stock inventory decreased by 3% to 134.8K head over the same period. YTD slaughter volume for Western Canada was 1.645M head for the week ending March 4, up 6.2% from the same period last year. Nationally, slaughter volume YTD was 3.736M head, down 0.1% from the same period last year. Alberta federal and provincial slaughter is reported to be 394.09K head for the period January to March 4, 2023. This volume is comparable to the slaughter volume for the same period in 2022. January 2023 export value of USD 2.9M for live hogs is up 13.1% compared to January 2022, but pork export value of USD 26.1M represents a 36.3% drop from January 2022. January 2023 export volume is reported to be 44.5K head of live hogs, an increase of 19.8% over January 2022, and pork export volume of 8.33K MT is a drop of 27.4% compared to January 2022. The major destination markets for Alberta pork remain Japan, the United States, Mexico, South Korea, and China. The value of exports to the US, Japan, and South Korea rose in 2022 by 28.8%, 2.92%, and 33.75%, respectively. The value of exports to Mexico and China declined in 2022 by 11.17% and 66.93%, respectively.
Denmark
Denmark’s Improvements in the Treatment of Sick Pigs (Mar 27)
Sick and injured pigs are the most frequent reason for sanctions by the Danish Food and Veterinary Administration, but the number of sick and injured pigs that have not received the correct treatment has decreased, figures from the latest inspections show. Supervisors had to sanction 21% of the 228 control visits to both breeding and fattening farms carried out from November 2021 to mid-March 2022. This is a significant improvement compared to 2018 when 32% of farm owners' pigs received sanctions. Although the number of sanctions remains high, the number of sick and injured pigs that have not received the correct treatment is low.
Denmark Saw Drop in Pork Exports in 2022 (Mar 29)
In 2022, Denmark saw a 3% decrease in its pig meat exports with a total volume of 1.937M MT, down 65.35K MT from 2021. Exports to the EU made up 55% of Denmark's pig meat export volume at 1.071M MT. This represents an 8% increase from 2021 (988.88K MT) when exports to the EU accounted for 49% of the total. Exports to third countries saw a 15% decrease YoY totaling 865.9K MT in 2022. By volume, Germany was the leading importer of Danish pig meat with 22% of the exports (406.,21K MT), followed by China with 19% (368.39K MT) and Poland with nearly 18% (344.08K MT). Exports to China suffered a notable 29% decrease in volume last year going from 520.6K MT in 2021 to 368.39K MT in 2022.
Brazil
The Return of ASF in China Can Boost Prices in Brazil (Mar 27)
The ASF disease decimated China’s pig herd, creating a supply gap that took years to be filled. During this period, China massively expanded its purchases of all kinds of animal protein. Brazil stood out in the sales of beef, chicken, and pork. In turn, Argentina and Uruguay gained prominence in beef exports. This movement was quite noticeable between 2019 and 2021. Chicken and pork began to show less significant volumes of shipments from 2021 onward. On March 15, it was widely reported by international agencies that Chinese health-testing companies pointed to the strong advance of ASF infections in the interior of the country after the Lunar New Year holiday period, but without showing specific numbers of cases. Anyway, the reports brought expectations of a decline in the pork herd and meat production later this year by market agents, so much so that the shares of the main Brazilian meat packers surged the day after the news. A possible worsening of the situation could lead China to import large volumes of pork from the global market, which would benefit Brazil, perhaps even facilitating the reopening of Brazilian beef due to the need for addressing future deficits of animal protein in its market.
Brazilian Pig Slaughter Falls in Mato Grosso and IBGE Finds High Production Costs (Mar 28)
The recent survey, released by the Brazilian Institute of Geography and Statistics (IBGE) points to a drop of 51.68K heads, compared to the previous period. Mato Grosso was the only one, among the main producing states, that had a drop in pig slaughter last year. Nationally, in the annual balance sheet, 56.15M heads of pigs were slaughtered, an increase of 5.9% (+3.10M head) compared to 2021 and a new record. The slaughter of 3.10M more hogs in 2022 was driven by increases in 19 of the 25 States participating in the survey. Santa Catarina (+972.43K head), Paraná (+735.94K head), Rio Grande do Sul (+404.69K head), São Paulo (+355.54K head), Minas Gerais (+281 59K heads), Mato Grosso do Sul (+236.06K heads) and Goiás (+49.13K heads). Santa Catarina maintained the leadership with 28.5% of the national swine slaughter, followed by Paraná (20.4%) and Rio Grande do Sul (17.3%). Pork slaughter totaled 13.89M head in the 4th quarter of last year, up 3.4% compared to the same quarter of 2021 and down 4.0% compared to the previous quarter. It was the best 4th quarter of the historical series, since 1997, with increases in 16 of the 24 FUs participating in the survey, adds the IBGE. The panorama for pig farming continued to be challenging, with high production costs and abundant supply, which affected the return of activity for producers.
Brazilian Pork Meat Export Performance in the First Four Weeks of March (Mar 28)
Pork continues on the upward trend observed for some months now. According to the daily average, the volume shipped is 15% higher than in March last year, while the price registers an appreciation close to 13%. As a result, revenue is around 30% higher and, at the end of the month, tends to show even higher rates, due to the extra working day in March. It should be noted that although the volume of pork exported so far corresponds to 94% of the total registered in March 2022, the revenue from it, due to the strong price appreciation, already exceeds by 6% what was earned a year ago.
The monitoring of pork shipments to China shows that Brazil showed significant growth during the first two months, equivalent to an increase of almost 38% over the same period last year. Even so, the volume of almost 73.2K MT shipped was 1.5% below the 74.2K MT shipped in the same two-month period of 2021. One of the missions of the Brazilian delegation present in China is to show that Brazil can supply larger volumes of this protein that is so consumed in that country. Volumes, by the way, have already exceeded 58K MT in March and June 2021. In the first two months, the volume destined for China represented 44% of the total exported by Brazil, while in the same period of last year and the year before, it reached, respectively, 37% and 53%. There were some months in recent years when this Chinese representation reached 55% of shipments.
Pork Shipments to China Leveraged Exports From Brazil (Mar 30)
At the opening of 2019, shipments to China represented only 18% of the total volume exported by Brazil, a rate that gradually evolved until reaching 42% at the end of the year. In 2020, the year in which the world was negatively impacted by the COVID-19 pandemic, Brazil started the year by shipping 45% of its volume to China, an amount that increased over the year to reach 55%. This high participation rate continued during the first half of 2021 but began to lose strength and reached only 41% during the second half. This average index of 41% prevailed throughout 2022, where volumes reached a minimum share of 31% and a maximum share of 53%. The first two months of 2023, in turn, showed an average rate of 44%. The fourth largest exporter of pork in the world, Brazil has the volume and conditions to grow even more and assume a greater role in this market as well, since it is already a leader in the export of beef and chicken meat.
France
Promising Results in France With an ASF Vaccine (Mar 29)
The French Food Safety Agency (ANSES), which is the reference laboratory in France for African swine fever (ASF), inactivated the Georgia 2007/1 viral strain, which is currently circulating in the European Union. During the control of the effects of this heat inactivation, an attenuated strain, derived from the Georgia strain, was detected. This strain only caused a mild fever in the infected animal, whereas infection with the Georgia strain is generally fatal in 100% of cases. The researchers carried out a series of studies on this attenuated strain and confirmed the weak symptoms in most of the pigs inoculated with this virus by the intramuscular or oronasal route. Although the safety was not perfect, the survival rate was much higher than with the original viral strain. Intramuscular vaccination is the most widely used method on farms, but oral vaccination could allow the vaccination of wild boars by baiting.
Mexico
Meat Imports and Rising Production Costs Put Pressure on Mexican Pig Farmers (Mar 30)
The constant increase in production costs, as well as the import of meat, are factors that are putting pressure on livestock farmers, mainly affecting pig farmers, a sector that is going through a critical situation, said the president of the Regional Livestock Union of Querétaro (UGRQ), Alejandro Ugalde Tinoco. This problem is aggravated by the disparity between production costs and the prices at which cattle are sold; while pig farmers receive between USD 1.61 and USD 1.66/kg (29 and 30 pesos) of pork meat, the production cost is around USD 2.11/kg (38 pesos) and the public price is around USD 7.21 (130 pesos). For this reason, the sector is fighting for the creation of a price regulatory body, in which the federal bodies have influence, to reduce the gap that persists between the payment received by the producer and the final price of the product.
United Kingdom
Low Supply of Slaughter Pigs in Great Britain, UK (Mar 29)
According to the British Agriculture and Horticulture Promotion Agency (AHDB), meat producers slaughtered only 762K of pigs in February, 17% less than the same month last year and the lowest monthly number since May 2014. Pork production fell by as much as 21% to 70.2K MT as the animals were delivered to the slaughterhouse at a much lower weight. The sow population has decreased significantly in 2022. However, this situation is not a surprise. In 2022, pig farmers in the UK significantly reduced their livestock as high production costs have led to noticeable economic losses. More recent results of the December 2022 livestock census are not yet available. However, AHDB analysts estimate that the sow herd has not increased since the summer and was about 10% lower in December than twelve months earlier.
Russia
The Number of Districts Affected by ASF in Russia’s Krasnoyarsk Territory Increased to Three (Mar 28)
The outbreak of African swine fever was detected in the Kuraginsky district in the south of the Krasnoyarsk Territory. This is the third district in the region where the ASF virus was detected. Previously, outbreaks of African swine fever were found in the villages of Malaya Minusa, Gorodok, in the city of Minusinsk, Minusinsk region, and the village of Karatuzskoye, Karatuz region. "In animals on a private farm in the village of Marinino, Kuraginsky district, the genetic material of the African swine fever virus was detected. In all areas of the southern territory of the region, a daily round of personal farmsteads is carried out to monitor the condition of pigs," the press service explained. According to the regional Rosselkhoznadzor, in the Krasnoyarsk Territory, more than 1.8K heads of pigs were seized and destroyed from the population.
China
China’s Sow Herd Rises 1.7% YoY in February (Mar 27)
China's sow herd increased by 1.7% in February compared with the previous year, 5% more than the forecast capacity. The herd reached 43.4M sows, China Central Television (CCTV) said, citing data from the Ministry of Agriculture and Rural Affairs (MARA), although it contracted by 0.6% compared with the previous month. Pork prices in the world's biggest pork-consuming country have hovered around USD 2.18/kg (15 yuan) since late last year, weighed down by weak demand and oversupply. With low hog prices, the average loss per hog is around USD 14.52 (100 yuan) currently, according to CCTV.
Australia
ASF Could Cost Australia USD 2.5B (Mar 27)
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimated the costs to the economy of two plausible scenarios for an African swine fever (ASF) incursion into Australia, incursions into either the feral pig population or the domestic production system, as well as the costs of ASF becoming endemic. The potential costs of this key threat entering Australia include the costs of eradication, costs to industry until the disease is eradicated, and long-term costs of ASF’s presence should eradication prove economically or technically infeasible. These estimates provide insights into the value of keeping ASF out of Australia. Should an incursion occur in the future, the endemic cost could be used to assess the costs and benefits of eradication decisions. A small-scale outbreak of ASF in domestic pigs followed by eradication of the disease was estimated to cost USD 117M to USD 263M. A small-scale outbreak of ASF in feral pigs followed by eradication of the disease was estimated to cost USD 101M to USD 127M. Endemic ASF was estimated to cost between about USD 0.4B and USD 2.5B.
Paraguay
Paraguay Pig Standing as the Third Best Price in the Region (Mar 30)
At the end of W13, there was a positive variation in the values of the Paraguayan live pig, since it reached USD 1.50 per live kilo, 1.3% more than the price of March 10, when it reached USD 1.48. According to the ACCP registry, since February 10 the national pig price has evolved favorably, compared to the first weeks of 2023. At the regional level, Paraguay registers the third best price, the same as Uruguay (USD 1.50). The highest price is from Colombia, with USD 2.07, while Argentina, Chile, and Brazil reached USD 1.72, 1.42, and 1.32 per live kilo, respectively.
Ukraine
Pork Imports Fell 4.6 Times in 2 Months in Ukraine (Mar 31)
During January-February 2023, Ukraine imported 2.7K MT of pork, which is 4.6 times less than in the same period last year. In monetary terms, imports in the first two months of 2023 decreased by 4.2 times compared to the same period in 2022, to USD 5.3M. In January-February this year, pork was imported mainly from Denmark (39.8%), the Netherlands (30.5%), and Belgium (11.5%).
South Korea
An Additional Case of ASF Occurred in 10 Days in South Korea (Mar 31)
An additional African Swine Fever (ASF) outbreak occurred in a pig farm in Pocheon, Gyeonggi Province in 10 days. This year, six cases have been reported in pig farms in succession, and the spread of ASF has not stopped, and the government has also announced plans to strengthen ASF quarantine management. ASF occurred in a pig farm with 9K pigs, and it was finally confirmed on the 30th as a result of a detailed inspection at the Gyeonggi-do Animal Hygiene Laboratory. This pig farm is the same as a pig farm in Pocheon that occurred on March 19th.
Colombia
Cuba Gives Green Light to Colombian Pork (Mar 27)
The announcement was made by the Colombian Agricultural Institute (ICA) and the National Institute for Drug and Food Surveillance (Invima), after finalizing the sanitary certificate with the National Center for Animal Health of Cuba (Cenasa) guaranteeing the export of pork and pork products from Colombia to Cuba. To achieve this important milestone, negotiations were held with Cenasa representatives who visited different departments of Colombia in November 2022 to initiate the audit and verification process to authorize Colombian facilities for the export of pork. As a result of these visits and various meetings between the sanitary authorities, the green light was given for exports. The model sanitary certificate agreed upon for the export of these products sets out the requirements established to avoid adverse effects on the sanitary status of the importing country and the health of consumers.
Colombian Evolution of Pig Production in 2022 (Mar 29)
In 2022, a total of 9.658M pigs were recorded in Colombian territory, of which 59% corresponded to animals from technical productions, 17% from commercial industrial farms, 14% from commercial family farms, and 10% from home farms. The departments with the highest concentration of pigs were Antioquia, Valle del Cauca, and Meta, representing almost 50% of the country's pigs. Technified production, which was the most representative with 5.71M animals, consisted of 224.04K breeding sows, 36.55K replacement sows, 3.69K breeding boars, and 5.446M growing and fattening pigs. There were 192.67K pig holdings, with a share of 0.4% for technical production, 2.1% for commercial industrial production, 18.6% for family commerce, and 78.9% for home production. Although home farms (152.07K) account for most of the global total, the number of pigs counted was very low (1.011M animals) compared to the inventory of pigs housed on technified farms (5.710M animals), which paradoxically has the lowest number of holdings (782). There is a 5% increase in the number of technified farms compared to those counted in 2021 (745). The numbers show increases of 1.3% in the number of breeding females trained and 7.5% in the number of breeding males, which is corroborated and in line with the increase in pork production in 2022. One of the most notable indicators is the 26.4% reduction in the number of pigs on home farms, from 1.374M animals in 2021 to 1.011M in 2022.
Taiwan
Tight Supply in Taiwan Sees British Pork Come To Market’s Rescue (Mar 30)
It’s not just eggs that have been in short supply in Taiwan. Other agricultural products have also been affected, such as pork. The Taiwan Frozen Meat Packers Association, which supplies the domestic meat market, has been in discussions with the UK’s Agriculture and Horticulture Development Board regarding the possibility of significantly increasing the volume of British pork imports as a processed product. The AHDB has stressed that British pork does not use additives such as ractopamine and strictly controls the use of antibiotics. British pork is regarded as a premium and healthy option, especially as a source of protein, and the importing of high-quality British pork will assist domestic manufacturers and help meet the needs of domestic meat processing manufacturers. According to the latest statistics from the Council of Agriculture Cabinet, Taiwan consumes about 900K MT of pork annually, approximately 35.32kg/ person. A significant food item for Taiwan.
