Pigmeat

- The upward trend in UK pig prices stalled in early August. In the week ended 2 August, the DAPP peaked at 137.4p but it was slightly lower in the following two weeks. In the week ended 16 August, the DAPP stood at 137.0p/kg dw, 0.6p more than four weeks earlier and 27.2p higher than a year ago. These price levels have only been exceeded in one previous period – in 1996, when the BSE crisis led to a switch in consumer demand away from beef to other meats.

- UK producer prices in 2008 have benefited from the weaker value of sterling against the euro, relatively strong consumer demand for pig meat in the first quarter and tightening supplies since April. More recently, rising European prices have had a positive impact on UK prices. However, poor weather in the UK and limited barbecue demand is likely to have had some negative impact on prices in August.

Source:  PorkWorld

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Actress-model Liz Hurley has shifted her attention to farming and is now producing prime pork.

The 43-year-old, who once said “I’m obsessed with sausages, I’d like to eat them every day”, is supplying meat from her 100-acre Cotswold Estate in Britain to local butchers and hotels. The meat is being sold as ‘Hurley Old Spot’ from the Gloucestershire Old Spot pigs she breeds, reports thesun.co.uk.

Butcher Perry Meredith said: “Her pigs are excellent quality. The breed provides a good flavour. It’s a different taste altogether. We use the whole pig. It produces beautiful Sunday roast  joints and prime bacon and sausages.”

An equity stake in the world’s largest pork integrator has been taken by the organization that aims to be China’s biggest pork producer within the next 3-5 years. The purchaser is China National Oils, Foodstuffs and Cereals Corporation, a state-run agency better known as Cofco that trades in farm products. It has bought almost 5% of the shares in Smithfield Foods of the USA, in a move that reduces Smithfield’s debt-to-equity ratio. The purchase was cleared by US antitrust regulators at the Federal Trade Commission.

Cofco has been reported previously by Pig International to have gradually increased its pig production interests in the central region of China after starting about 6 years ago. One recent estimate was that the organization’s current contract pig production scheme in Hubei province could generate 500 000 pigs/year. But the target set by Cofco’s directors is a nationwide network capable of producing 10 million slaughter pigs annually.

Unusually for China, there is a ‘green‘ element to the plans. Cofco already has an environmentally certified pigs scheme and has assembled a budget reckoned to be as high as US$1.75 billion to spend on a program for improved ecology in pork production.

One feature is the allowance of extra floor space per pig to provide more welfare-friendly conditions. Now it wants to tap into Smithfield’s know-how on the large-scale production of lean and healthy pigs. Its purchase of shares has led to the nomination of Cofco’s chairman to join the board of directors of Smithfield Foods.

The biggest pig producer in Spain

New assessments name the Spanish enterprises that can claim to be at the top nationally for size of pig production.

Among the many events taking place in and around this year’s Expoaviga show in Barcelona, Spain, were presentations relating to the Spanish pig sector. They provided a number of insights, not least by suggesting that Spain’s long-running expansion of sow numbers has probably ended.

As the graph confirms, the inventory of breeding sows in Spain rose quickly from less than 2 million at the start of the 1990’s until it finished the decade between 2.4-2.5 million. It now seems that the peak was reached in 2004 when the December census that year recorded almost 2.61 million sows, even if unofficial data from Spanish organization Anprogapor cited 2.85 million for sow numbers in 2002. At the end of 2005 there was already sign of a small cutback. The early prognosis for December 2006 again indicates a total sow complement of under 2.6 million.

Dr Lorenzo Merino, with Agric-Bemvig sales manager Ferran Meinhardt, started his herd in 2004 to produce piglets on contract inside cooled-air houses.

The word from the Spanish pig industry insiders attending Expoaviga was that the outlook until 2010 should envisage a basically flat level of national pork production each year. Producers pointed to the country’s 116% rate of self-sufficiency in pigmeat, the ever-tougher battle to win planning permission for a new or expanded unit and the ever-present arguments over pollution. Perhaps more important still as an influence for the coming trend, they commented, is the mediocre profitability suffered by pig production in Spain over the past 3-4 years. It looks likely to stimulate a further round of consolidation, not only among the big and medium-sized players.

Anyone with fewer than 500 sows is already regarded as having too small a herd to sustain an income as a family concern. The minimum size for survival is rising rapidly. Again quoting those attending the show in Barcelona, in 5 years from now we can expect that any independent producer who is not integrated will have at least 1000 sows unless allied to a co-operative or involved in a specialist activity such as producing seedstock.

Full concrete slats provide the flooring for the gestation stall facility.

Scale in Spain is illustrated most clearly by the show-time estimates of the biggest pig producers nationwide. Vall Companys from Cataluna is still put at the top of the list, with an estimated 160 000 sows. Next in line is Proinserga from Segovia with 90 000 sows, although the organization has admitted suffering financial losses since buying the Primayor pork production operations of Spanish food group Campofrio in 2004. At Number 3 the sources proposed the name of father-and-son company Jimenez from Murcia (45 000 sows). Piensos Baucells takes fourth spot with the 50 000 sows it controls directly or indirectly. A holding of about 35 000 sows is attributed to Catalan feed manufacturer Piensos Leridiana and also to provincial co-operative Guissona.

A problem of rankings then arises because so many concerns in Spain are reckoned to be in the 30 000-40 000 sows category. Several visitors suggested it would be easier to state the biggest producers in each Spanish province. Cataluña’s largest would be obvious as Vall Companys, Baucells, Leridiana and Guissona. Segovia’s line-up is also clear, with the pair of enterprises Proinserga and Copiso. Navarra has Uvesa, Terrafeta and Dos Hermanas. Galicia’s biggest is undoubtedly Coren (30 000 sows). In Valencia there is Agroturia. Murcia has Juan Jimenez, the Cefusa operation of food giant El Pozo and Frandi. More names compete for attention in Aragon, ranging from Piensos Costa (30 000 sows) to Isidro Martin, Seral, Samper and Codornices del Cinca.

Talking pork

Information and opinions on pig feeding, care and well-being of pigs in the global market.

Surely one of the most revealing conversations at the EuroTier show in Germany must have been when the boss of a big international equipment company told me that his production capacity was struggling to keep up with the fast flow of new orders from pig-sector clients. The company was already outsourcing some of the products it supplied, but this aspect could not be increased significantly overnight because of the extra tooling and injection moulds required.

As with a number of other major equipment enterprises, this particular supplier has been more identified in the past with its sales to poultry units than its business with pig producers. For a long time such companies operated on the maxim that the profit on each poultry order easily exceeded the margin in a contract involving pig pens. The relative profitability has changed until both parts are about equal, I was told. Add this fact to the obvious international demand for projects to house and feed pigs and it should be clear why supply companies in the poultry sector now want to be big names in pig equipment worldwide.

At EuroTier, a typical remark by a company director was that the global business of supplying the houses, pens and fixtures for producing pigs had become the Number One growth area with particular help from the boom in sales to Russia and other parts of centre/east Europe. Several suppliers with interests in both sectors said they expected a 50/50 division of their sales between poultry and pigs in 2007 for the first time on record.

More signs at the show included the announcement by Chore-Time group CTB (owned by the Berkshire Hathaway investment arm of Wall Street legend Warren Buffet) that it is acquiring pig equipment companies to create a new swine division, tasked with matching its established activities in poultry and feed storage. According to group president/ceo Victor Mancinelli, some US$2 billion are spent annually worldwide on buying equipment for pigs.

Pigmeat group warns on product liability

EuroTier also brought a timely reminder from Paul Jansen, director of corporate public affairs for Dutch-German meat company Vion, that Europe’s latest clutch of new legislation has included a general food law which took effect in 2006 although agreed as far back as 2002. One of its provisions requires all participants in the food chain to take responsibility for the product delivered, he noted. Being responsible means accepting product liability and consequential losses in case of a food safety incident.

The question therefore becomes whether pig-unit operators and their suppliers have arranged sufficient product liability insurance to cover this contingency. Mr Jansen said his company’s conversations with farmers’ organizations had shown that producers in European Union countries had failed to arrange enough liability insurance and even some feed suppliers were not covered adequately.

Everyone in Europe’s pork chains from feed to pigmeat needs to be working together to meet the challenge laid down by the new food legislation, he declared. We should be improving our crisis management in view of the concerns over animal food safety; for example, by introducing the criteria that all the suppliers and buyers of a feed product can be determined within 4 hours of an incident occurring.

Russia raises its protein output

Expect to see animal husbandry in Russia continue to climb in its share of agriculture turnover, from 44% in 2005 and 47% in 2006. That was the message to a EuroTier meeting from a deputy agriculture minister in the Russian government. Sergey Mitin also pointed out that Russia currently stands at 9th in the world for pig production. The implication seemed to be that it intended moving higher quite soon.

The most headline-grabbing part of the speech, however, came when Mr Mitin also revealed an immediate target to double the area of land cultivated for rapeseed to convert into biodiesel. This has already increased from 250 000 hectares to 500 000 hectares in recent years, he remarked. Now the government wants to see one million hectares planted for the next harvest. Negotiations have started with European companies to obtain the seed and to arrange up-to-date oil processing facilities.

Biofuel takes up China’s corn supply

All discussions of feed crop prospects globally have become dominated by the way in which grain resources are going into biofuels. Fuel generation is now regarded as a prime factor in the conflict between tightening supplies of grains and an extremely strong demand for them in many countries.

Watch out for the grain-to-biofuel debate to intensify in future as more effects on the world market availability of feed grains become apparent. China offers a case in point. Today a net exporter of maize, within just a few years China is expected to become a net importer because of its rapidly expanding corn processing industries.

When China’s harvesting of maize was completed last year it produced an annual crop of 142 million tons, up by 2.6 million tons from 2005 and 17.8 million tons above the 5-year Chinese national average. Net cereal exporter status for both 2006 and 2007 was secured by an overall 2% increase in all-cereals production.

Net corn importer status would therefore represent a marked change for China. It exported 8.61 million tons of maize in 2005, although exports in the first 9 months of 2006 were down by more than 68% at only 2.3 million tons, whereas the January-September total for imported maize reached an unprecedented 60 000 tons. Officials in Beijing insist that the changeover from net exporter to net importer will not happen as soon as 2007 because local supplies still exceed requirements. However, they believe the gap will disappear soon afterwards as more grain enterprises build feed processing facilities in China’s major corn-growing provinces to convert their maize into fuel ethanol and products for sugar and animal feed.

China is already the third-largest fuel ethanol producer after Brazil and the USA. Its ethanol production now consumes over 9 million tons of corn per year almost exactly the same amount as the quantity of maize exported only 2 years ago.

Feed prices promote world production of wheat

While cereal prices rise inter-nationally, the inclusion of grain in animal feed diets around the world is being forecast to drop in the 2006/07 harvest year. On estimations from the International Grains Council, for example, there will be a decline of about 1% in feed use of grain. It predicts a particularly sharp fall in the use of high-priced wheat. Feed manufacturers are expected to make more use of barley as well as of maize in the coming 12 months.

Global feed wheat usage is placed at 94.2 million metric tons, compared with 107.8 million tons the previous year. Other forecasts are 102.3 million tons for barley and 470 million tons for maize.

Observers of the current price hikes for feed grains on the world market are forecasting that it will promote considerably more land to be devoted to growing wheat over the coming year. They say this could compensate for a standstill in yields that has seen the wheat crop struggle to keep pace with rising demand. Figures vary for the precise levels of production and consumption in 2006, but the International Grains Council has calculated that around 585 million tons of wheat were produced globally last year and some 606 million tons consumed.

Meetings abound in a Chinese setting

Anyone wanting to visit an event in China related to pork production in 2007 will have a wide choice. A glance at the calendar we maintain of industry events in all countries finds quite a line-up of China-based conferences and exhibitions. Four examples illustrate the meetings on offer.

April 2007 sees the Chinese city of Wuhan acting as the venue for the 3rd Asian Pig Veterinary Society Congress. The capital city of Hubei province in central China, Wuhan stands on the banks of the mighty Yangtze River and is the home of one of the country’s most prominent universities. Also in April, the 3rd agriChina agricultural exhibition returns to Beijing.

The next edition of the annual China Animal Husbandry Expo is set for Ningbo, Zhejiang province, in May 2007. Last year the expo took place in Dalian, northeast China, where more than 500 companies exhibited. It has been organized annually since 2003 by the China Animal Agriculture Association.

Then in September, the scene shifts to Nanjing in the Jiangsu province of eastern China and its hosting of a series of inter-related meetings centred on the World Pork Congress of 2007. This coincides not only with the 4th world conference of the International Meat Secretariat similarly taking place in Nanjing, but also with the 5th China International Meat Industry Exhibition and the 2nd China Meat Foodstuff Festival at the same venue.

Japan has less pork imports

Our focus this month on Asia ahead of the VIV Asia show in Thailand happens to coincide with a reminder from the FAO agrifood agency of the United Nations that one Asian country receives almost one-quarter of all the pigmeat traded globally each year. That country is Japan.

Such is Japan’s position on the export-import scene for pork that its purchasing in 2006 was reckoned particularly influential in the international pressure on pigmeat prices last year. High stocks of pork in Japanese depots led to a considerable decline in pork import prices, said an FAO report.

More details have appeared sub-sequently. Japan started 2006 with extremely high opening stocks of 300 000 metric tons of frozen pork, according to the US department of agriculture. Economists at Britain’s Meat and Livestock Commission noted that this volume represented around half of Japan’s annual demand for raw pork and approximately 8 months’ supply of imported pigmeat for processing.

Therefore it should have surprised no-one that Japanese imports of frozen pork dropped by nearly one-third during the first 10 months of 2006, to 416 700 tons, as the total of all pigmeat imported fell by 20% to 600 500 tons. By contrast, imports of chilled, boneless cuts were 10% higher at 182 250 tons because they were unaffected by the high storage volumes.