W51: Weekly Pork Update
Europe
The EU pig market has maintained stability in W51, and demand will progressively decline throughout the Christmas season, but slaughter has remained stable. Farmers are taking advantage of these final days to market their pigs before activity stops, which has kept the EU pig market stable this week. In W51, the price has remained constant at USD 2.13/kg carcass. The outcome of the November livestock census has an initial projection of a 15% decline in breeders in places like Lower Saxony and Baden-Württemberg. In Uniporc's West region, 372,827 pigs were slaughtered, which is 9K fewer than in W50. The weights maintain a downward trend at 95.97kg, a 346 g decline in W51.
Spain
Piglets Reach the Highest Price of All 2022
Price increases for pork in Spain have continued the week of the Christmas holidays. In Mercolérida, in W51, piglet prices increased once again, reaching their highest level in 2022 at USD 64.98 per unit. After striking a balance between supply and demand, the supply is still linear and appropriate for this seasonal period. What awaits the sector will be revealed later.
Ham Exports Increase Through the Third Quarter
Through the third quarter of 2022, exports of Spanish-cured hams and shoulders were 40,595.68MT, up 10.78% YoY from 36,644.25MT in the same period in 2021. Additionally, exports reached USD 447.29M in total, up 15.47% from 2021. During this time, the European Union as a whole, imported 28,253.15MT of cured ham and shoulders from Spain, representing an increase of 6.11% YoY, whilst third countries imported 12,342MT, an increase of 23.20% YoY. Thus, 69.6% of cured ham exports in the first nine months of the year were from the EU.
Germany
Further Decline in Germany’s Lower Saxony Pig Herds
In Germany, the decline in pig herds determined in the spring of 2022 continued at the end of 2022, with a fall of 8.9% YoY in November 2022 to 7.1M pigs from 7.8M pigs in 2021, the lowest stock in ten years. Additionally, the stock decreased by around 21.6% as compared to November 2012.
The Drastic Decline in Pig Slaughter in Germany Continues
Less pork was produced in October in Germany YoY, despite a pig production rise of more than 10%. The most recent figures confirm once more the sharp drop in German pork production brought on by the loss of domestic stock. Statistics show that between January and October, 39.13M pigs were slaughtered in Germany, which is a decrease of 3.95M animals, or 9.2% YoY. Some slaughterhouses are boosting the purchase of fattening pigs from other countries to make up for the growing shortage of slaughtered animals.
Significant Decrease in Pig Census in Baden-Württemberg
As of November 3, 2022, there were slightly more than 1.3M pigs in Baden-Württemberg. In comparison to the same month in 2021, the herd was reduced in absolute terms by about 161,700 heads. Both breeding sows and finishing pigs have seen decreases. The breeding sow census stood at just 102,800 head, a 15% drop from 17,900 animals in the previous year. Large farms with 250 or more breeding sows reduced their herd at an above-average rate of 23%, or 13,600 animals in 2022.
Brazil
In Brazil, Upward Trajectory Continues for the Pork Market on December 21
The demand for pork meat has increased in Brazil as the holiday celebrations appear. As a result, prices for live pigs and carcasses increased across all marketplaces on December 21. In São Paulo, the CIF pork arroba price remained constant at USD 28.09–28.85, while the price of the special carcass grew by 2.56-2.68% to USD 2.18-2.28/kg.
Prices in the Pork Market in Brazil Continue to Rise on December 20
On December 20, high prices were noted in the pork market in Brazil as demand increased. As a result, prices for live pigs and carcasses increased across all marketplaces. The CIF pork arroba rose by 4.83-5.71% to reach USD 28.09–28.85, while the special carcass increased by 2.75–3.54% to reach USD 2.13–2.22/kg.
Pork Prices Show Signs of Reaction in Brazil in W51
The average price of live pigs in Brazil rose by 4.05% WoW, from USD 1.20-1.25/kg in W51. The average price of wholesale ham cuts increased by USD 1.96-2.04/kg, or 4.58% WoW. The carcass went from USD 1.90 to 2.03/kg, an increase of 6.67%. Meanwhile, the price of pork arroba in São Paulo increased from USD 25.43 to USD 28.47. The live pig price in Rio Grande does Sul's integration remained constant at USD 1.04/kg. In the interior of the state, it increased from USD 1.23/kg in W50 to USD 1.31/kg in W51. The price in Santa Catarina remained constant during the integration, at USD 1.06/kg.
Higher End-Of-Year Demand Raises Pork Prices in Brazil
The approaching end-of-year festivities have increased demand for pork, which has supported prices. The largest increase in live pig prices this month, up to Wednesday, December 14, was 4.62%, and it was recorded in Santa Catarina, with the commodity reaching USD 1.29/kg. However, the highest value, USD 1.43/kg, representing an increase of 4.13% in the first half of December, was recorded in Minas Gerais. The sirloin, which saw the greatest increase in demand, is one of the most sought-after cuts. Cepea is optimistic and expects sales to remain strong in the coming days. According to the country's official inflation gauge, the Extended Consumer Price Index (IPCA), pork prices rose by an average of 0.88% in November. The highest increase was registered in Rio de Janeiro (RJ), at 3.24%.
In Brazil, Pork Demand Heats up and Prices Rise
In Brazil, 27K MT of pork were shipped in the first seven working days of December, with an average daily cargo of 3,900MT, or 9.2% fewer than last month. The demand for pork has increased as the holiday celebrations get near. As a result, prices for live hogs and carcasses increased in all marketplaces that Cepea monitors. The loin, which has the greatest appreciation, is one of the most sought-after cuts. Brazilian pork exports have been declining in the first half of December, the opposite of what has been happening in the domestic market.
China
Pork Prices in China Fall Week on Week
According to official data, between December 12 and December 16, pork prices in China experienced a significant decrease. The Ministry of Agriculture and Rural Affairs' average pork price tracked throughout the brief period was USD 3.7/kg, down 11.1% WoW. However, the price was 19.6% higher than in 2021.
China's Ensuring the Supply and Stabilising the Price of the Live Pig Market
The National Development and Reform Commission's Price Department recently organized a video conference in response to the recent sharp decrease in domestic hog prices in China. An increase in hog production at the end of the year and poorer pork consumption than in prior years are, according to experts, the main causes of the recent quick decrease in hog prices. There is no overcapacity, according to experts, and the domestic pig production capacity is currently within a reasonable range.
United Kingdom
Strong Production Growth for Pig Meat in November
According to the most recent Defra statement, the UK produced 91,900MT of pig meat in November, which represents a 6% MoM increase and a 2% YoY decrease. The demand for Christmas has helped this month's volume reach its highest level since March. Despite average carcass weights falling 1% MoM in November to 89.4 kg, pork production increased from October. Increased slaughter drove the month's increased production, with November's clean pig slaughter recording the highest monthly numbers since March at 995,400 head. Clean pig slaughter is up 8% MoM.
Poland
Pre-christmas Slump on the Fattening Pig Market in Poland: The Discounts Are Substantial
W50 brought a significant drop in pig prices in Poland, which is probably a reaction to the upcoming Christmas. For live pigs, meat plants currently pay an average of USD 1.69/kg, which is USD 0.046 less than a week ago. As of W51, the rates range from USD 1.58-1.81/kg. The current average price for pigs in WBC (class E) plants is USD 2.15/kg, which is nearly USD 0.068 less than a week ago. The rates for class E range from USD 2.10–2.20/kg.
United States
Beef in the US Has Become Cheaper Than Pork and Chicken Meat
Since 2021, beef prices have decreased dramatically at the wholesale level in the US, and soon, retail prices will reflect this. Beef has become less expensive than pork and chicken in recent months as a result of a sharp decline in beef pricing. In terms of the consumer price index, retail prices for chicken and pork declined from the previous month but remained much higher than they were a year before, according to the expert.
Processor Margins Pressured by High Hog Prices
Although the number of hogs slaughtered in November was higher than usual for the season, it is expected that 2022's Q4 will see fewer numbers than 2021's. According to the September report, the spring pig crop from which the hogs for November's slaughter will be sourced will be down 1% YoY. According to recent estimates, 10.9M heads of pigs were slaughtered in the FI in November, representing a nearly 2% decrease YoY. Processors paid higher prices for fewer heads slaughtered in November, with the average live equivalent price of 51–52% lean hogs at USD 63.72/CWT, almost 17% higher than average prices in November 2021.
Russia
Russian Pork Exports Expected to Reach 170K MT by End of 2022
Russian pork producers will export around 170K MT of products by the end of 2022. According to the National Union of Pork Producers, once logistics issues were fixed and the price environment went back to normal in the second half of the year, pork exports started to increase. Southeast Asian exports, which once made up nearly 50% of global exports, will drop to 30% in 2022. The increase in pork exports to the members of the Eurasian Economic Union, notably Belarus and Kazakhstan, somewhat offset the decline in exports to Vietnam and Hong Kong.
Pork Exports From Russia to China
President Vladimir Putin's concerns truly go beyond the conflict between Russia and Ukraine. The refusal to allow Russian pork exports to China caused this sector to rage in Moscow. They asked the administration to get in touch with Beijing to turn on the import faucet because, if the Chinese market is opened, Russian pork exports will rise by 0.5 MMT annually.
South Korea
Next Year’s Pork Prices Are Expected to Be Lower Than Production Cost
In South Korea, pork prices are anticipated to be below production costs in 2023, with an average price of USD 4.09/kg, a little drop from the price of USD 4.11/kg in 2022. This is because inventories will increase and consumption is anticipated to decline as a result of the economic downturn. Losses are anticipated because households engaged in pig farming are likely to obtain settlements at costs below those of production. The average pork production cost for pig farms is estimated to reach USD 4.17/kg. The price of the compound feed was determined to be USD 0.59/kg, which is around USD 0.024 less than the current price of USD 0.62/kg.
Argentina
Pork Exports Decrease in Argentina During 2022
In Argentina, pork exports fell by 91.6% in the first 11 months of 2022 compared to 2021 and by 93.7% throughout the same period in 2020. Between January and November of 2022, 2,200MT were sold. Argentina is importing pork from Brazil due to lower sales prices than domestic production costs, a lack of competitiveness, and the exchange rate delay.
Ukraine
This Year, Pork Production in Ukraine Is Expected at the Level of 625K MT
The prediction for Ukrainian pork output in 2022 is 625K MT, based on the balance of supply and demand for meat and meat products. This will guarantee that each person will consume 20 kg of pork annually under the current circumstances.
Philippines
Philippines Extends Tariff Cuts on Food Items, Including Pork
The economic ministry's suggestion to extend lower tariff rates on rice and other food commodities through the end of the following year to fight inflation has been approved by Philippine President Ferdinand Marcos Jr. The 2021-approved reduced rates were set to expire at the end of 2022, but a 14-year-high inflation rate made it necessary to extend the tariff respite until December 31, 2023. The tariff rate for imported rice will therefore remain at 35%, whereas the tariff rate for corn and pork products will remain at 5%-15% and 15%-25%, respectively.
