Measure to support European pork producers takes effect

Difficulties for the EU pork sector go back to February of 2014 when Russia put in place a ban on imports of European pig meat (and other products) following sanctions imposed as a result of the political situation in Ukraine. The new Private Storage Aid (PSA) measures, which involve EU funding to help cover the costs of storing certain pig meat products for periods of between 3 and 5 months, took effect on January 4.
The scheme is part of a EUR500 million (US$542 million) support package for farmers announced by EU Agriculture Commissioner Phil Hogan, in September 2015. Because of the large volumes of lard previously exported to Russia, this product has been included in the PSA.
Aid for private storage is a market measure within the framework of a Regulation that compensates part of the storage cost for a period of time. Member States will notify twice weekly the quantities submitted into storage.
“I am aware that the pig meat sector is facing difficulties and prices have been in decline since September, and so I hope this measure will help the market,” commented Hogan.
The latest update from the European Commission on the EU pig meat market highlights the challenges in the sector. Production in 2015 is forecast at 256.8 million head or more than 3 percent above the previous year. While exports for the first 10 months of last year were 5.2 percent higher than the same period of 2014, domestic consumption has been flat and as a result, prices in the last week of 2015 were down around 6 to 8 percent from the levels one year before.

Danish Crown, Tican merger off; Tönnies, Tican seek deal

With a proposed merger between Denmark pork cooperatives Danish Crown and Tican off of the table, German food company Tönnies is now pursuing a merger agreement with Tican, the companies announced on November 2.
Tican has signed a framework agreement on the transfer of shares in Tican A/S with Tönnies, according to a press release issued by Tican. Tican A/S is the holding company for all of Tican’s pig slaughtering and meat processing. Tican’s sales companies in Germany and China are also covered by the agreement.
A due diligence review will take place in November, and a share transfer agreement between the parties is expected by the end of November.
According to Tican, the transaction is expected to be approved by the European competition authorities; however it is expected that this approval will take place within approximately one month from the notification – around the end of 2015.
If the agreement is approved, the financial interest of the cooperative members for a competitive residual payment for the 2014-15 financial year will be secured. The agreement with Tönnies also provides Tican confidence that the future settlement price of finishers and sows will be at a competitive level. It has also been of crucial importance for the board and management to ensure the future operation and development of Tican's companies.

Danish Crown disappointed Tican deal not approved

Prior to the announcement of the Tican-Tönnies merger, Danish Crown had been planning a merger with Tican, with the owners for both cooperatives approving the merger in March. Among Tican’s owners, 91 percent approved the deal and 100 percent of Danish Crown’s owners giving their approval. However, Danish competition authorities did not approve the pending merger before its stipulated deadline of October 31.
 “We have declared our willingness to undertake a large number of commitments to the Danish Competition Authority, and even though we have consulted with the authority on what it would take for the merger to go through, the commitments that we have been ready to undertake have not satisfied the authority’s requirements,” Kjeld Johannesen, president and group CEO of Danish Crown, said in a statement.
“It is, of course, a great shame, and we have to admit that we were surprised by the very national perspective adopted by the Danish Competition Authority in its review, given that the merger would be one of two export businesses. It’s hard to see how a European single market can develop if all the national competition authorities maintain a local perspective.”

EMA approves product use during pregnancy, lactation in sows

The European Medicines Agency (EMA) has granted the use of Boehringer Ingelheim’s Ingelvac CircoFLEX® during pregnancy and lactation in sows. The vaccine is registered worldwide for the protection of pigs against Porcine Circovirus Type 2 (PCV2) related diseases. Ingelvac CircoFLEX reduces mortality, clinical signs and lesions associated with PCV2.
Today, piglet vaccination is the global standard measure for the prevention of PCV2 related diseases in pigs; Ingelvac CircoFLEX is the global market leader in this product segment.¹
George Heidgerken, Head of Boehringer Ingelheim Animal Health, said: “Ingelvac CircoFLEX is the first PCV2 vaccine licensed in the European Union to protect piglets as well as sows. We are proud that we can now offer veterinarians and farmers the means for an even broader protection of pig herds against this fatal virus.”

PCV2 can have a devastating impact on the pigs’ health, causing suffering to the animals and economic damage to the farmers. An infection with this virus may lead to wasting, paleness of the skin, dyspnea or diarrhea in piglets. In breeding herds, PCV2 infection can cause reproductive losses in sows. In both, piglets and sows, PCV2 can also cause medically and economically relevant subclinical infections (infections without evident clinical signs). It has been demonstrated in further studies that sow vaccination with Ingelvac CircoFLEX® has significant positive effects on the reproductive performance, in particular the farrowing rate, the number of piglets born alive and weaned per litter.^2,3,4,5,6
References:
1) Based on local and international market research data (data on file).
2) Misener M. et al. 2014: Impact of Reproductive Performance on a sow herd vaccinated with Ingelvac CircoFLEX®. Proceedings of the 2014 Allen D. Leman Swine Conference, p. 39.
3) Hauray K. and Delisle G. 2013: Effect of mass vaccination of Ingelvac CircoFLEX® on reproductive performance of sows. Proceedings of the European Symposium of Porcine Health Management 2013, p. 113.
4) Menard J. 2011: Vaccinating sows and gilts for PCV2 in PRRS positive herds – a case report. Proceedings of the 2011 ISERPD - International Symposium on Emerging and Reemerging Pig Diseases, p. 241.
5) Grimbeek P. J. 2010: The reproduction and production improvements in a South African commercial piggery after introducing whole herd vaccination against PCV2. Proceedings of the 21st International Pig Veterinary Society Congress, p. 372.
6) Kostuchenko E. et al. 2013: Positive Impact of PCV2 vaccination of gilts and sows on reproductive performance demonstrated in a side by side field observation. Proceedings of the 2013 Allen D. Leman Swine Conference, p. 204.

Europe’s organic pig sector sees mixed fortunes

There were just under 794,000 pigs being reared in organic systems in the European Union (EU) in 2014, according to new figures from Eurostat, representing a fall of 1.5 percent from the previous year. Data from 20 of the community’s 28 members have been included for that year and 2013, the first year for which statistics were collected.
In 2014, Denmark had the most organic pigs – at almost 215,600 – but this was 10 percent down from the previous year’s count. France recorded an increase of 5.8 percent from 2013 to just under 213,000, followed by Germany with more than 195,000 animals, slightly more than the year before.
Estonia experienced the largest percentage increase in organic pig numbers between 2013 and 2014 of 139 percent, albeit from a fairly low level to 2,731. Slovenia’s count was up by 12.0 percent to 3,135, Hungary’s increased by 9.4 percent to 5,340 and the Dutch total was up 8.4 percent to 68,914. There were just under 2,000 organic pigs in the Czech Republic last year, 7.2 percent more than in 2013. Finland added 5,656 to the total with an increase of 3.9 percent.
Dramatic reductions in organic pig numbers were recorded by Romania (126 animals; -51.2 percent), Lithuania (256; -32.1 percent), Latvia (4,007; -24.2 percent), Poland (7,958; -18.6 percent) and Belgium (9,532; -16.0 percent). At 6,790, there were 12.9 percent fewer organic pigs in Spain in 2014 than 12 months previously and the count in Greece was down 2.8 percent at 4,664. There were 961 organic pigs in Croatia, 14.3 percent fewer than the year before.
Among the bigger producers, the U.K. count was down by 6.1 percent at just over 28,300 and Sweden recorded a decline of 4.3 percent to 19,666 pigs in organic systems.
Three countries have not yet reported figures for 2014. The previous year, Austria, Italy and Ireland had 70,935, 43,318 and 489 organic pigs, respectively.
Although not EU member states, Switzerland and Norway are included in the 2013 data set with 26,613 and 2,808 pigs, respectively. A year later, the Norwegian count was down 6.3 percent at 2,631.

Measure to aid European pig industry takes effect

The European Commission has formally adopted measures providing aid for private storage measures for the EU pig meat sector, with the measure going into effect March 9. Under this standard market support measure, the commission pays for part of the costs of storing pig meat for 3 to 5 months.
The measure was proposed by European Agriculture Commissioner Phil Hogan in February.
Past experience has shown that this move to temporarily reduce supply on the EU market eases market pressure and thus tends to help prices pick up. The sector has been under pressure since the Russian ban on pig meat imports from the whole EU in February 2014 linked to an outbreak of African swine fever in East Poland and the Baltic Republics, according to a European Commission press release.
Although traders have managed to find alternative markets for most products and animal feed costs have been lower than usual, the lengthy squeeze on margins is being felt, with many producers having previously made substantial investments in order to meet new EU animal welfare rules. The measure was discussed and voted on by member state experts in the Common Market Organisations (CMO) Committee on February 24, and was recently published in the Official Journal.

European pork producers facing losses

Europe’s sharp decline in pig prices since the end of 2013 has been highlighted at a UK conference that also heard warnings of a continuing oversupply on the European market due to weak demand.
A primary influence on the European Union pig scene last year was Russia’s decision to ban imports of pork from member countries. In 2013 the EU had supplied 60 percent of all pork imported into Russia, noted BPEX market intelligence manager Stephen Howarth at the Agriculture & Horticulture Development Board’s Outlook 2015 conference in London. The imposition of the Russian ban in 2014 suddenly meant that large quantities of European pig meat had to find an alternative outlet.
Pork exports by the EU are unlikely to show a substantial increase this year as the competition on the international market intensifies due to larger supplies, particularly from the United States, Brazil and Chile.
Meanwhile, latest calculations suggest that most EU-28 producers are losing money on each pig marketed after their feed costs edged higher in the first part of 2015. Stephen Howarth reported some evidence from Germany over the last 3-4 months that the country’s sow numbers are being cut back in response to the poor profitability of 2014-15, with herds downsizing or even being closed. Similar trends may be occurring in other EU member states, he commented, which could lead to a tightening of pork supplies across the European Union marketplace in the 2015-16 period.
From a British perspective the size of the national breeding herd seems to have stabilized around 425,000 sows, so that any increase in pork production this year will be driven by sow productivity and the carcass weight of pigs at slaughter. A further gain in productivity looks certain for 2015 in line with a trend over several years that has seen the number of pigs slaughtered per sow per year in the UK rising by 2-3 percent annually under the influence of better management, health feeding and genetics. The national average carcase weight may also rise in 2015, but any increase is likely to be small compared with the situation in 2014 when it trended higher every month to reach record levels as pig finishing enterprises delayed marketing in order to take advantage of cheaper feed.

EU rules on pig blood imports revised

European Union officials have agreed on new rules for the treatment of imported pig blood for use in animal feed, but decided not to change the rules on the import of live pigs. The rules were discussed by EU officials at a May 6 meeting due to concerns of the spread of porcine epidemic diarrhea (PED) virus in North America and Asia.
According to a Reuters report, an expert committee had introduced a requirement that any blood products to be imported to the EU for use in pig feed must have been treated at 80 F, followed by storage for six weeks at room temperature, which the European Commission said would ensure any coronavirus present was inactivated.
The EU opted not to change its rules on live pig imports, stating import rules on live animals were already strict, and that U.S. and Canadian authorities had told them no live pigs were scheduled to be sent to the EU.
Citing worries of the spread of PED virus, France had earlier proposed a ban on imports of pigs and pig products from the U.S., Canada, Mexico and Japan. However, France opted to wait until after the May 5 EU meeting before making a final decision. A spokesperson confirmed that no such ban would be implemented at this time.

Dutch pig farmers petition against rule limiting time sows can be in stalls

Pig producers in the Netherlands are signing a petition against a rule that allows Dutch farmers to keep sows in stalls for only four days. Those signing the petition argue the rule's fairness, as the January 2013 European partial sow stall ban allows European Union producers to keep sows in stalls for four weeks, yet a four-day rule is in effect in the Netherlands.
According to reports from the National Pig Association, a large number of Dutch producers have signed a petition against the four-day rule, and the farming minister is being challenged on the issue in the Netherlands House of Commons.

EU pig production to recover slowly, commission forecasts

After two years of declines, EU pig meat production will begin to increase again, the EU Commission forecast. However, the commission does not expect EU pig production to return to 2011 levels until around 2020.
The recent decline has been partly driven by the new welfare regulations introduced in 2013. However, the report indicates that the new rules will force out some less competitive producers, which will boost productivity going forward. Growth is only expected to be modest because of environmental constraints in some of the main producer countries, and this trend is forecast to continue over the coming years, therefore pig production is not expected to return to 2011 levels until around 2020.
Over the projection period, EU pig meat consumption is set to recover slowly, reversing the decreasing trend seen since 2007 because of the economic crisis and the limited supply. However, even by the end of the period in 2023, per capita consumption of pig meat is forecast to remain below its level in 2011 at 31.8 kilograms per head, according to a BPEX report. EU pork exports are forecast to be steady over through 2015, but then to grow slowly over the rest of the decade. Growth will be constrained by competition from the U.S. and Brazil, where production is expected to increase significantly.

EU pig production to recover slowly, commission forecasts

After two years of declines, EU pig meat production will begin to increase again, the EU Commission forecast. However, the commission does not expect EU pig production to return to 2011 levels until around 2020.
The recent decline has been partly driven by the new welfare regulations introduced in 2013. However, the report indicates that the new rules will force out some less competitive producers, which will boost productivity going forward. Growth is only expected to be modest because of environmental constraints in some of the main producer countries, and this trend is forecast to continue over the coming years, therefore pig production is not expected to return to 2011 levels until around 2020.
Over the projection period, EU pig meat consumption is set to recover slowly, reversing the decreasing trend seen since 2007 because of the economic crisis and the limited supply. However, even by the end of the period in 2023, per capita consumption of pig meat is forecast to remain below its level in 2011 at 31.8 kilograms per head, according to a BPEX report. EU pork exports are forecast to be steady over through 2015, but then to grow slowly over the rest of the decade. Growth will be constrained by competition from the U.S. and Brazil, where production is expected to increase significantly.

Some EU countries still struggling to meet sow loose housing rules

The first week of September 2013 was the deadline by which European Union (EU) member states of the EU-28 group of countries must inform the European Commission of their progress in implementing the requirement for all sows to be in loose housing for gestation. A failure to supply the information could result in the particular country being referred to the European Court of Justice and penalized financially for infringement.
Under rules introduced by the European Union, from January, 1 2013, all pregnant sows in EU herds must be loose-housed rather than in individual confinement stalls or crates.

EU pig meat production down 2 percent in 2013

Figures presented to the European Commission suggest that EU pig meat production will be around 2 percent lower in 2013 than in the previous year, according to BPEX. This is a smaller decrease than the 3 percent indicated by previous forecasts. 
This is partly because pig production had already fallen more sharply than expected in the second half of 2012, precipitating significant price increases across the EU. However, there is still considerable uncertainty about the forecasts, particularly for the second half of the year, as the impact of animal welfare changes is unclear.
At the same meeting, the prospects for future pig prices also were discussed. The general view was that there was unlikely to be a repeat of the sort of dramatic price rises seen last year. Nevertheless, prices are expected to remain high, probably increasing as the year progresses. 
The ongoing economic crisis is having an impact on consumer demand in the EU, limiting any upward pressure on prices. At the same time, export markets are proving more difficult this year, with the weak yen affecting shipments to Japan and higher production in Russia and China limiting opportunities there.

Pork trade within EU down 5 percent in 2012

The volume of pork traded between EU Member States declined nearly 5 percent in 2012 than in previous years as supply tightened for some key exporters, such as Denmark and the Netherlands, according to Eurostat. Annually about 5 million tons of pig meat is traded between EU Member States, however far more is shipped to non-EU markets. 
About 85 percent of pork products originate from six Member States. Ireland is the only other Member State that exports more pork to the rest of the EU than it imports. Germany is the largest exporter to other EU Member States but last year it also was the leading importer of EU pork.
In contrast, 20 Member States were net importers of pork from elsewhere in the EU. Italy, Poland, UK, Czech Republic, Greece and Romania all imported at least 100,000 tons more than they exported in 2012. Several smaller Member States import significant quantities of pork while and export very little. Ten EU countries recorded increased imports in 2012, mostly as a result of higher demand following sharp falls in domestic production.
Denmark, the Netherlands and Germany were the three leading exporters of cured pork products, and the UK was the main market for all three. Italy and Spain also were significant exporters of specialty hams, with France and Germany the two leading markets.

EU pig breeding herd down 4 percent in 2012

The EU pig breeding herd is down by more than 4 percent in, according to a pig census of 19 countries taken in November and December 2012 by Eurostat. The census revealed a smaller decline in sows and gilts, 3.5 percent and 1.4 percent, respectively.
However, maiden gilt numbers were down 5 percent, suggesting no recovery in EU pig herd numbers is imminent. Only Slovakia, recorded an increase in its pig breeding herd, while the Czech pig herd was stable. In the other EU countries, declines ranged from 1 percent in Denmark to 21 percent in Slovenia.
The figures also show that the overall pig herd in the 19 countries was down by nearly 2 percent. The fall would have been even larger, but for changes in the methodology of the German census which significantly increased the number of pigs recorded. Other than Germany, only a few smaller pig producers recorded increased herd numbers.
Meanwhile, three eastern member states, including Poland, recorded double-digit percentage falls. The contraction in the EU herd confirms that pig meat is likely to be tight through 2013, particularly in the second half of the year.

Czech Republic’s pig meat production declined 8.9 percent in 2012

The Czech Republic’s pig meat production declined 8.9 percent to 239,753 tons in 2012. However, producer prices of pigs for slaughter grew 17 percent.
Producers sold pigs for slaughter in S, E and U quality classes for CZK 33.26 per kg of live weight or CZK 42.78 per kg of carcass weight on average (minimum CZK 39.83 per kg in February, maximum CZK 46.40 per kg in October). A deficit of external trade in live pigs from December 2011 to November 2012 was 9,035 tons. Imports and exports of live pigs were 29,883 tons, an increase of 30.7 percent and 20,848 tons a decline of 11.3 percent, respectively.
Young pigs up to 50 kg (mainly piglets with average weight 25.6 kg) as well as pigs above 50 kg (predominantly pigs for slaughter with average weight 106.2 kg) contributed to increased imports. Imports accounted for 522.8 thousand piglets and increase of 6.9 percent and 16,346 tons of pigs for slaughter an increase of 63 percent.
Exports of fattened pigs decreased by 11.2 percent to 19,423 tons, while exports of piglets grew three times (to 33.6 thousand heads). Piglets were imported from Denmark, Germany and the Netherlands; pigs for slaughter were exported to Hungary and Slovakia.

EU pig producers initiate pork futures changes

Pig producers in Belgium and the Netherlands are banding together to create a sufficient volume of pigs between them to trade on the futures market operating in Frankfurt, Germany, according to Albert Vernooij, animal protein markets analyst for Netherlands-based Rabobank International.
The projects have been backed by local state authorities in support of their farmers. The development is a reaction to increased volatility of international prices for feed ingredients and livestock, commented Vernooij at an outlook conference held in London. Rabobank’s team of analysts believe that, on average, commodity prices will trend higher and remain more volatile, at least until the end of 2014.
Perhaps in the coming years, Vernooij added, Europe will have a US-style scenario in which slaughter pigs have eight or nine different ‘owners’ through futures market trading before they arrive at the abattoir.

17 EU countries are not sow stall compliant

Only 10 EU member states are now fully compliant with the implementation of the group sow housing rules, while 17 countries continue to flout the law, according to the EU Agriculture Council. Germany, France, Cyprus and Portugal still remain less than 75 percent compliant. Belgium, Greece and Ireland are less than 90 percent compliant. Large-scale pig producers, such as Denmark and the Netherlands still remain a short way off.
As of January 1, 2013 all European Union countries implemented a sow stall ban. Under these new rules, sows and gilts in all holdings with at least 10 sows must be kept in groups during part of their pregnancy.
Overall, 75 percent of the EU’s 13 million sows are held on compliant holdings. Urging non-compliant countries to finalize the implementation of the ban, Member States must provide regular updates of relevant data and Farm Ministers to apply dissuasive sanctions to non-compliant pig producers.
Warnings under infringement proceedings will be distributed at the end of February. With regard to some delegations deploring the unfair competition between compliant
and non-compliant countries. The council opposes any unilateral restrictions on trade of pig meat products from noncompliant countries.

EU pig production and income predictions for 2012-2020

The contraction in the pig herd in 2011 compared to 2010 (-1.7 percent), and more markedly in breeding sows (-3.2 percent), generates a marginal decline in EU pig meat production in 2012 (-0.4 percent), according to a recent study “Prospects for Agricultural Markets and Income in the EU 2012-2022.”
In 2013, the decrease is expected to be even larger (-3.2 percent), as it will cumulate with the impact of mandatory welfare standards coming into force as of January 2013 and of higher feed costs incurred due to the United States drought.
After its fall in 2012 and 2013, pig meat production is projected to resume its growth from the second half of 2014, as production is expected to respond to high prices, with farmers progressively adjusting to the new welfare requirements. By 2022 pig meat production would roughly settle at the level of 2011, i.e. approximately 23 million tons.

Feed prices, inventory
Increased feed prices as a result of the drought in the US during the first half of 2012 were compensated by high pig meat prices which led to stable pig producers' margins. After reaching the historical high of 1 900 EUR/t in September 2012 (31 percent more than the 2007-2011 average), prices fell slightly in October (-0.5 percent against the previous month). Piglet prices have so far followed the seasonal trend and are situated around 470 EUR/t.
As regards trade, January-August 2012 data confirm stronger EU exports, 5 percent higher than the same period last year, mainly due to the weak Euro and the strong global demand, particularly from China, Russia, Ukraine and Japan. Overall, 2012 is projected to end with an estimated 1% increase in exports compared to the already very high level registered in 2011.
Lower availabilities in 2013 would trigger a projected decline of 15 percent in EU exports, followed by a rebound in 2014, when production is expected to recover; this trend would be of short duration as exports would then start decreasing again (-9 percent on aggregate over 2011-2022).

Pig meat consumption
Overall EU pig meat consumption is expected to increase by 4.3 percent (+3 percent and +10 percent in the EU-15 and EU-N12 respectively). Although EU per capita consumption would decrease by 1.6 percent between 2011 and 2022, pig meat would continue to represent half of EU total meat consumption. It is worth observing that, at world level, poultry meat would represent the most consumed meat overtaking pig meat (on average 14.5 kg/capita versus 12.7 kg/capita).
The EU is more than self-sufficient in pig meat, producing about 110 percent of its domestic consumption and this trend is expected to continue throughout the outlook period. However, increased competition from other producing countries (for example, China) would see the EU production share in global production slowly decline.
This medium term outlook provides a projection for major EU agricultural commodity markets and agricultural income until the year 2022, based on a set of coherent assumptions. Under these assumptions agricultural commodity prices are expected to stay firm over the medium term, supported by factors such as the growth in global food demand, the development of the biofuel sector and a prolongation of the long term decline in food crop productivity growth.

Pig production report finds UK and EU costs narrowing

The latest cost of production report for BPEX, found that UK pig producers costs increased 7 percent while the European average was around 12 percent. Part of the reason for the narrowing of the gap is that pig feed prices increased earlier in the UK than in the rest of Europe.
Despite the higher relative cost of production in Great Britain, most aspects of physical performance did improve between 2010 and 2011. The InterPIG report, which covers data from 2011, looks at costs in selected European countries together with Canada, Brazil and United States.
“We are improving year-on-year, but so is the rest of Europe and we need to close the gap faster,” says Andrew Knowles, head of knowledge transfer at BPEX."There is some good news for the industry in the report, but there are still challenges, which need to be overcome. For example, the overall average number of pigs weaned per sow per year in the European InterPIG countries showed a 2 percent increase in 2011, while there was a 3 percent increase in pigs weaned per sow in Great Britain.”
For a copy of the report, email Emma Whitlock at Emma.Whitlock@ahdb.org.uk.

Pig breeder ACMC calls for meeting to prevent illegal imports

EU pig breeding company ACMC Ltd. has called for an emergency summit meeting to address the issue of illegal pork imports in Europe beginning on January 1, 2013, as a result of countries' noncompliance with the sow stall ban going into effect.
Recent figures from the National Pig Association show that 80 percent of the EU may still be noncompliant, and that roughly 2 million pigs per week may enter the production chain from farms operating illegally come January 1. “Imports of such meat will have serious implications for British pig farmers who follow high-welfare practices and who have had to comply with a total ban on sow stalls for over a decade,” said Matthew Curtis, managing director of ACMC. “Due to cheaper production methods, this lower-welfare meat could undercut UK-produced meat and the fiasco in the EU surrounding non-compliance with the battery-cage ban in 2012 will pale into insignificance compared with this.”
The summit should involve all UK retailers, wholesalers, slaughter-processors, producers and consumer bodies to ensure that no pork from illegal production systems in the EU enters the UK, according to ACMC.