Export Bulletin

January 2012 – Week 04

Exports to end of November show a healthy rise of 12.2% to 133,446 tonnes. Exports to Germany at 29,098 tonnes are stable but exports to Hong Kong and China confirm their rapid rise with 28,998 tonnes. Other strongly performing markets include France (6,379 t.), Belgium (5,422 t.), Korea (1,911 t.), the Philippines (942 t.) and Japan (554 t.).

DENMARK

Market The European markets for fresh meat have normalised after the seasonal decline after the turn of the year. Fresh legs are still under pressure and are sold at slightly decreasing prices. There is a fine demand for front parts and shoulders as well as for bellies. Loins are in low demand. The poor market for loins is affecting the back market in the UK, which is characterised by oversupply. The situation on markets outside the EU remains unchanged meaning slow sales to Russia and a stable export to the markets in the Far East. (Sources, Danish Crown, Tican, Danish Agriculture and Food Council)

Tesco requirements result in changed requirements at Danish Crown The approximately 1,250 employees at the Danish Crown slaughterhouse at Gedved north of Horsens are not allowed to have any nuts in their lunch packages. Also all products containing nuts have been removed from the canteen. The reason is that the British supermarket chain Tesco that annually buys meat for billions of Danish Kroner from Danish Crown wants to avoid that traces of nuts end up in meat resulting in allergic reactions with customers. The employees have accepted the ban on nuts. (Source, Horsens Folkeblad)

January 2012 – Week 04 Export Bulletin

Scientists expect lower mortality among piglets in new report Danish piglets seem to have better chances of surviving in the farrow stables in the future. This is the conclusion from a working group that just finalized its report to the Danish Food Minister. In 2004 22% of the piglets died in the breeding stocks before weaning. After a change of the Danish breeding goals just 16% of the piglets die in the breeding stocks before weaning. However, the decrease in mortality has yet not worked through in the production herds, but the working group expects that it is going to happen as the sows will be replaced with sows that have piglets with lower mortality. The working group recommends that in 2015 the sector accounts for the development in the production herds. (Source, Landbrugsavisen)

Danish Slaughterhouses - payments week commencing 23 January 2012 Slaughterhouse Danish Crown Tican Slaughter pigs (70.0 – 86.9 kg) Euro 1.320 Euro 1.320 Difference to last week Unchanged Unchanged Sows (Above 129.9 kg) Euro 0,946 Euro 0.946 Difference to last week Unchanged Unchanged Boars (Above 109.9 kg) Euro 0.813 Euro 0.813 Difference to last week Unchanged Unchanged

FRANCE

Sauerkraut January is inevitably the sauerkraut month, this very traditional Alsacien dish accompanied with local white wine (Riesling, Edelzwicker) is one of the most popular winter dish served in France. All retailers prepare special offers in January for all necessary ingredients. As far as meat is concerned pork is the only meat included in the recipe: shoulder cuts (smoked or cured), belly (smoked or cured). An authentic Alsacien sauerkraut needs to include slices of the large Morteau sausage (medium coarse smoked sausage) and a few Montbéliard sausages (medium coarse smoked pork sausage). Now Strasbourg sausages (very fine coarse red pork sausage) are indispensable but the addition of Frankfurters is debatable… The sauerkraut itself is cooked with white wine or possibly Champagne together with some lardons.

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January 2012 – Week 04 Export Bulletin

Retail prices in €/kg of meat included in sauerkraut are as follows:

Morteau sausage Strasbourg sausage Shoulder Belly Intermarché 10.80 5.90 4.90 5.00 Leclerc 9.90 6.25 4.95 5.55

Pork The upstream of the market considers that a new increase is completely possible on Thursday in Plérin, due to a moderate offer for a good demand, in particular on the European side. At the same time, the buyers are very prudent with their purchases due to a lack of real dynamism of the meat market.

Cuts The market remains not very good. Everyone is waiting for the restocking of the retailers in anticipation of the beginning of the month. The market is waiting to know if exports will be good enough to allow the sector to come to the aid of the internal market. It is a subject which divides: some do not expect good exports before February, whereas others think that the market is already better.

Pork prices RUNGIS week commencing 23 January 2012 Cut name Price range (Euro/Kg) Back fat, rind-on 0,75 Trimmings 1,35 Leg 2,04 Loin including chump 2,90 Loin excluding chump 2,33 Belly extra without trimmings 2,50

GERMANY

Market Quantities sold are mostly satisfying although increased prices for live animals could not be maintained at sales of cuts and the loss of margin negatively affects the atmosphere on the

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January 2012 – Week 04 Export Bulletin

markets. Half carcasses were purchased at 9 Eurocents more than last week. Information about supply varies. While some report of ample supply, others report of a tight supply situation. In terms of cuts shoulders and legs were demanded well and could be sold at slightly increased prices. Collars, chops and meat for processing were ordered in good quantities for freezing. Half sow carcasses of German origin were purchased at 1 Eurocent/kg more than last week; prices for imported products remained unchanged. (Source, AMI)

Tönnies plans China expansion Tönnies aims to significantly grow its business in China. Therefore, a new joint venture will be set up, MD Clemens Tönnies announced. The company aims to support the countrywide installation of large deboning plants that will eventually also be supplied with German pig meat. Packaging and transport logistics for the new venture are currently being built at the Tönnies headquarters in Rheda Wiedenbrueck. Target is for Tönnies to benefit financially from the re-structuring of the meat supply chain in China, where currently small traders are selling meat throughout the country - with nearly no refrigeration in place. Means of transport often is a small motorbike. “These hygienic circumstances leave us speechless, really,” Clemens Tönnies said. He also stressed that the company still aims to take over Schöppingen based Tummel GmbH. Last year, the German cartel authorities had stopped the takeover due to competition concerns. According to Tönnies the company has appealed to the Higher Regional Court against this decision. (Source,ISN)

„We produce meat” failed The platform for public relation and communication that was only founded in June 2010 could not be secured financially and will cease operating. The internet presence www.fleischexperten.de however that contains ample information on meat will largely be maintained. (Source, Topagrar)

Premium for boars From 1st of July 2012 Tönnies will pay for entire pigs for fattening according to the market value. Until now, a flat reduction of 3 Eurocent from the basic price was in place. From October 2012 Tönnies will also pay a premium of € 1 per entire male piglets to those farmers using genetics from boars that produce progeny with less strong odor. The applicable genetics are marked accordingly at the AI centres. The premium will only be paid if a minimum of 80% of fattening pigs per plant descent from these boars. Furthermore, the consistent use of these genetics has to

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January 2012 – Week 04 Export Bulletin

be documented. Tönnies will randomly check the pedigree for the according genetic marker using SNP technology for which a meat sample will be taken and tested. (Source, Topagrar)

Exports According to the newspaper Süddeutsche Zeitung, Germany has grown to be one of Europe's largest meat exporters. Since 2005, exports of meat and meat products have increased by nearly 60% (2005: 2,3 Mio. t; 2010: 3,7 Mio. t). Due to this increase, Germany has moved from being a net-importer to being a net-exporter of meat. While 10 years ago the level of self-sufficiency for meat was at 94% it was at 113% in 2010. (Source, Lebensmittel Praxis)

Antibiotics in fattening pigs Careless disposal of residues of dairy production has led to the closure of 26 pig fattening sites in Southern Germany, one of which was reopened shortly afterwards. The antibiotic Chloramphenicol got into pig feed due to a diary farm's employee having incorrectly disposed of laboratory waste. It is expected that some of the farms will be reopened next week. (Source, Various)

Nürnberger Bratwurst must use Franconian pork According to a new German law, the famed pork and marjoram grilling sausage, probably the most famous produced in Germany (some 1.5 billion of them are produced annually) must now use local pork from Franconia the distinctive region of Northern Bavaria. Franconia produces 1.7 million pigs per year. (Source, AFZ)

Pork Prices Hamburg Market Week commencing 23 January 2012 Cut Name Price Range (€ / kg) Round cut leg 2.05/2.25 Leg (boneless, rindless max fat level 3mm) 2.90/3.10 Boneless Shoulder 2.25/2.45 Picnic Shoulder 1.95/2.10 Collar 2.20/2.45 Belly (bone in, ex-breast) 2.20/2.35 Sheet Boned Belly (rindless) 1.90/2.20 Jowl 1.30/1.45 Half Pig Carcasses U class. 1.97/2.07

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January 2012 – Week 04 Export Bulletin

NETHERLANDS

Academic scandal Last August, Diederik Stapel from Tilburg University and Roosje Vonk from Radboud University Nijmegen issued a press release regarding an investigation on the psychological meaning of meat suggesting that meat eaters were “more selfish”. It later emerged that Stapel had used falsified data for his study. He was placed on „administrative leave‟ and Vonk was reprimanded in December. Vonk was chairwoman for animal welfare lobby Wakker Dier from 2005 to 2008 (Source, Vleesmagazine, various).

Vion centralises its organic meat activities Organic pork will be produced from Groenlo from slaughter to retail packing. Distribution (Distrifresh) and administration (Groene Weg) will be done from Boxtel. Some 1,200 to 1,300 pigs from 50 farms are processed every week. Van Rooi, Westfort and Van Loon also produce smaller volumes. (Source, Boerderij Vandaag)

SPAIN

Exports to listings Some 62 plants are listed to export to Vietnam. These include all the main pork export abattoirs of Catalonia and Aragon. For Russia, some 152 plants are listed

Pork prices Barcelona Market Week commencing 23 January 2012 Cut Name Price Range (€ /kg) Carcases (secondary grade) 1,450/1,456 Gerona Loin Chops 2,21/2,24 Loin Eye Muscle 3,11/3,14 Spare Ribs 2,73/2,76 Fillets 5,38/5,41 Round Cut Legs 2,28/2,31

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January 2012 – Week 04 Export Bulletin

Cooked Ham 1,82/1,85 Rindless Picnic Shoulder 1,54/1,57 Belly 1,96/1,99 Smoked Belly with Spare Rib Section Cut off 2,39/2,42 Shoulder chap or Head Jowls 1,08/1,11 Back Fat, Rindless 1,08/1,11

RUSSIA

ASF The experts of Tver Veterinary Laboratory examined samples taken from the body of a dead wild boar found in one of the villages in Tver Oblast. The test showed that the animal died of ASF. The results of the test were sent to Rosselkhoznadzor Tver Department and the State Veterinary Inspection of Tver Oblasts so that the necessary measures could be taken as soon as possible, one of the measures being quarantine. Another pig death caused by ASF was registered in Krasnodarskiy Kray (Farm Kolos). There are 6,324 pigs in the epicenter of the outbreak and they are currently tested for ASF virus. It should be noted that during 2011 the population of pigs in the region decreased, mainly due to ASF, by 150,000 animals (1,034,000 pigs in December 2011 vs. 864,000 pigs as of Jan 1, 2012). (Source, Meatinfo.ru)

Imported Pork Prices Saint-Petersburg Market: Leg (bone/in): USD 4.55/kg Heart: USD 3.11/kg Imported Pork Moscow Market: Shoulder (bone-less): USD 5.95/kg Neck (bone-less): USD 7.36/kg (Source, Meatinfo.ru)

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January 2012 – Week 04 Export Bulletin

UKRAINE

Pork prices in Ukraine as of Jan 20, 2012 According to the information provided by the Ministry of Agrarian Policy and Food of Ukraine, as of January 20, 2012, the average purchase price for pigs of the first and the second categories was USD 2,160/t. The price didn‟t grow within the last month (since Dec 20, 2011), but during the last year it increased 25%. Average retail price for pork as of Jan 20 was USD 5.44/kg (Source, PigUa.info)

Meat import to Ukraine decreased by 37% in 2011 Last year the volume of meat and meat products imported into Ukraine decreased by 37% compared to 2010 results. In 2011 there were 216,000 t. of meat (342,100 t. in 2010), including 83,000 t. of pork (179,800 t. in 2010) imported to Ukraine. In comparison, there were 80,500 t. of meat including 12,500 t. of pork exported from Ukraine abroad in 2011. (Source, LigaBusinessInform)

BULGARIA

Back to growth Growth is back since the end of 2010 and ING Bank forecasts a healthy 2.8% rise GDP for 2011 and even 3.8% for 2012. Bulgarian public debt is one of the lowest in the EU. However, agriculture, manufacturing and exports remain weak and the grey/informal economy still account for 40% of official GDP. The value of the retail trade is around € 6 bn. but this is up from € 1.8 bn. in 2000 boosted by rises of wages. Food consumption is expected to rise by 0.6% in 2010, 1.6% in 2011 and 2.0% in 2012. Supermarkets (Metro, Rewe, Schwartz and Carrefour are the main players) account for only 25% of food sales, mainly in the large towns. Unlike other Central European countries, co-operatives are out of favour and hypermarkets are showing the biggest growth.

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January 2012 – Week 04 Export Bulletin

GREECE

Pork imports steady Despite the economic difficulties, pork imports remain at high levels with Dutch pork still dominating the trade with more than 50% of shipments. (Source, BPEX)

Greek producers’ woes Greek pig producers face a difficult conjuncture. Firstly, finance is about impossible to come by and is this is slowing production and the fresh meat trade considerably despite good demand. Greek producers have high production costs and cannot afford to rejuvenate their genetics. Finally, imported pork is cheaper than Greek pork and this is generating downward pressure on price. Greek pork is not differentiated in retail butchers and much imported pork is sold as Greek.

CHINA

Pork production set to rebound in 2012 AHDB is forecasting a growth of production of 4% in 2012 to 51.28 million tonnes following a retraction of 3% in 2011. The 4% seems at the high end of expectations. However, demand should remain strong and the USDA does not forecast a fall of imports. (Source, International Meat Market Review)

China dominates imports of soya In 2001-02, China accounted for 18% of World soy imports with 10 m. tonnes. In 2011-12, China now accounts for 60% of World imports with 54 m. tonnes. It is difficult to see from where further growth will come from despite rapidly rising production in Argentina, Brazil and the USA. This will keep the pressure on soya prices for years to come, particularly as other far eastern countries are importing more soya too. (Source, Porc Magazine)

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January 2012 – Week 04 Export Bulletin

VIETNAM

PRRS causes production to fall Porcine Reproductive and Respiration Syndrome (PRRS) has caused a loss of production of 10- 30% in the first half of 2011 in Vietnam. This created a shortage of pigs in June and July. In addition “interest rates soared above 20% whilst feed prices increased discouraging many farmers from increasing production. Large pig producers such as Saigon Trading Group (Satra – own Vissan the major pork processor of Ho Chi Minh City) and Dong Nai Food Ind. Corp. (own Proconco, an important feed mill) are joining in an integrated business to develop 25,000 sows in production and benefit from the window of opportunity. Some 70% of all meat consumed in Vietnam is pork (Source, Asian Pork).

Exports to China Some 6,000 pigs per day are exported from the Northern provinces of Lang Sonand Quang Ninh as producers seek to benefit from the major price difference between China and Vietnam.

THAILAND

After the floods The major floods that affected Thailand at the end of 2011 affected 63 provinces and killed 529 people. Small pig farmers and 189,000 pigs were affected as was feed distribution. Logistics to supermarkets was perturbed, many of them closed, and pork consumption fell down leading to a decline in the price of slaughter pigs. Economic growth was reduced from 3.7 to 2% (Source, Asian Meat).

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