Dear readers,

            While the price increases are slowing down, we see other positive developments related to our industry:

•          Italy’s government approved a bill banning the use of laboratory-produced food and animal feed as it aims to safeguard the country’s agri-food heritage.If the proposal is passed by parliament, Italian industry will not be allowed to produce food or feed „from cell cultures or tissues derived from vertebrate animals”.

•          Spain is not exporting only pork cuts. Exports of processed meat reached 1,660 billion euros in 2022, after growing 18.6% compared to 2021 and 40% compared to 2019. The main destinations were France, Portugal and Germany, which together account for 40% of the total exported.

•          The acquisition of a minority stake in the Brazilian meat company Master Agroindustrial , a specialist in the production of pork, is the latest move by the Spanish food group Vall Companys. The leaders take opportunities.

•          According to PorkExpo LATAM, Frimesa Brasil started the official hog slaughter operation on March 27th. The schedule takes place on a scale with a forecast of 1200 animals/day, to reach an average of 2377 in April. The new Brasilian plant has a total capacity of 15 thousand pigs/day until 2028. The animals slaughtered will be from cooperatives affiliated to Frimesa. The objective is to reach, by December, the target of 7,500 animals/day processed, 50% of the total capacity.Today, 614 employees are hired for the initial activities and, by the end of the year, 4 thousand people should join the operation.

•          Brazil is seeking further investment from COFCO, the top Chinese grains trader, which has already invested in Santos, Brazil’s main soybean port, and is expanding its export terminal capacity. COFCO has bought all 1.5 million tonnes of corn that has been shipped from Brasil to China so far.

•          China approved four new Brazilian meat plants for export.

•          An agreement to allow for electronic certification of meat export facilities will be signed during Brazilian President Lula da Silva’s rescheduled visit to Beijing.

•          A Purdue University team led by Jiqin (JQ) Ni has received a $500,000 grant from the Foundation for Food & Agriculture Research to document air-quality issues surrounding pork production in partnership with the National Pork Board.

•          Even with the emergence of Chinese demand for Ukrainian grain, the prices for feed corn in Ukrainian ports were 190-200 USD/t CPT-port, which is slightly lower week-on-week.

It’s no good

            The available pigs are shortening all over Europe. In the UK, in February, pork production collapsed by more than 20% year-on-year. According to the British Agricultural and Horticultural Promotion Agency (AHDB), only 762,000 pigs were culled in February; this was 17% less than in the same month of the previous year and the lowest monthly volume since May 2014. Pork production even fell 21% year-on-year to 70,200tn, as animals were sent to slaughter with significantly less weight.

The shortage of available pigs is also redisining the route of the pigs from countries with overproduction. According to data from the Danish producer association Danske Svineproducenter, 2.77 million pigs were slaughtered in January and February 2023. It was 13% less than in the first two months of the previous year . On the one hand, the figures show that Danish piglet production has decreased significantly (-10% of sows in January 2023 compared to the previous year). The Danes now fatten less pigs themselves, but export proportionately more piglets. This is also evident in the piglet export figures for January and February, which were almost 1% higher than in the previous year, despite a sharp decline in the number of sows. No wonder that TICAN is challenging the position of Danish Crown, offering again a higher qoutation for the pigs. Meanwhile the leader has time… „ We have a strategic target of paying our cooperative owners DKK 0.60 more per kg pork than the EU index. How can we do this…?” Danish Crown challenged the students in Aarhus Case Competition to outline a strategic initiative that can contribute as much as possible to the DKK 0.60 (8 cents) target by 2030.

The stabilisation of the German quotation Wednesday came out as a surprise. However, pricespan is stated up to 2,38 €/kg. The electronic stock exchange showed no reason for this, all lots sold with prices indicating an increase of 5-10 cents. All livestock traders stood were shocked by the development. The „explanation” was the position of slughterhouses, unable to pass the increasing pig prices to the retail. I wrote last week about the unfair margin share ont he chain of meat, will not do it again now. I feel there is another strong reason for the halt of pig prices is Germany: one of the credit insurers has announced that it is terminating its cooperation with Vion. As a result, the risk for credit insurers has increased and their credit lines are filling up faster, according to Vion. Vion does not write which credit insurer is stopping the cooperation, but it would be Euler Hermes, part of Allianz Trade. Euler Hermes has sent a letter to the suppliers, in which she writes that she is closing all German branches and the Dutch branches of Vion in Groenlo and Apeldoorn.

When one of the top pig industry players looses credit, it’s no good!

https://www.youtube.com/watch?v=_-QPvffO1gs

European pig and piglet prices: HW= Hot weight; L= live weight;

COUNTRY	PIG(EUR)	TREND	PIGLET(EUR)	TREND	OBSERVATION
GERMANY	2,33 HW		83/25 kg
NETHERLANDS	2,13-2,35 HW		75,50/25 kg
BELGIUM	1,7 L		74/20 kg
DANEMARK	1,75-1,77 HW		84,5/25 kg
FRANCE	2,38 HW
ITALY	1,91 L- 115 kg, 2,22 L- 160 kg, DOC		136/30 kg
SPAIN	2-2,04 L		101-111/20kg
PORTUGAL	2,8 HW
AUSTRIA	2,29 HW		97,5 /25 kg
POLAND	1,72-2,09 L		86 -129/20-30 kg		Partner info; no quotation
CROATIA	2-2,50 HW		100-108/ 25 kg		Partner info; no quotation
SERBIA	2,05 L		99-108/ 25 kg		Partner info; no quotation
CZECH R.	2,22-2,29 HW		75-81/ 25 kg		Partner info; no quotation
SLOVAKIA	1,9-1,95 L		100-105/25 kg		Partner info; no quotation
HUNGARY	1,86-2 L		98-109/ 25 kg		Partner info; no quotation
ROMANIA	1,8 -1,9 L		100-109/25kg		Partner info; no quotation