Spain Calls for Negotiations to Avoid Tariffs on Pork Exports to China

MADRID, June 17 (Reuters) – Spain has called for negotiations to prevent tariffs on its pork exports to China, following Beijing’s announcement of an anti-dumping probe into pork imports from the European Union. The investigation appears to mainly target Spain, the Netherlands, France, and Denmark, in response to the EU’s curbs on Chinese electric vehicle exports.

Spanish Agriculture Minister Luis Planas expressed hope for a resolution, stating, “I hope and expect that there will be room for understanding, for negotiation, and to avoid the imposition of tariffs on agricultural and food products.” The probe, announced by China’s commerce ministry, will focus on pork intended for human consumption, including fresh, cold, and frozen whole cuts, as well as pig intestines, bladders, and stomachs

Spain, a leading EU pork exporter, is working with EU officials to avoid damaging tariffs that could impact the industry significantly. The investigation could last more than a year, and immediate measures are not expected.

Reuters

Irish Pig Market Update 12th June

There was no announced change to Irish pig prices on Friday. Producers are reporting quotes of at least €2.26 – €2.33 available from processors in ROI, with some reporting up to €2.35/kg.

This signals strong demand for pigs with the average price circa €2.30/kg following an increase of 2c/kg delivered to many producers.

According to the Commission the average European price for a grade E carcass pig for week 22 was €2.21/kg (Excluding vat). This price is still 8% less on prices for the same week last year, however it is up 1% on last month’s average EU grade E carcass price.

The weekly throughput for week ending June 9^th was 53,573 of which 1,493 were sows.

German authorities have reported a 9th pig farm to be infected with African Swine Fever. The virus was confirmed in a finishing farm in the state Mecklenburg-Vorpommern, in the country’s north east just 20km from the border of Poland. There were 3,000 finishers on the farm. Authorities have stated that there has been no wild boar infected in the surroundings.

IFA

Irish Cattle Trade & Prices w/e June 8th 2024

Cattle & Beef

Throughput: There were 28,736 cattle processed in DAFM approved plants during the week ending June 8th 2024, taking throughput for the year to date to 782,949 head. This is a 14,280 head or 2% increase on the corresponding period in 2023 when a total of 768,669 cattle were processed. There have been 560,851 prime cattle processed in the first 23 weeks of 2024, a 3% increase from the same period last year (+7,723 head). Cow throughput has remained strong with 189,745 cows processed so far this year, a notable increase of 17,809 head (+10%)

Prices: Base quotes this week are in the region of €5.10/kg – €5.15/kg for steers while starting quotes for heifers are around €5.15/kg-€5.20/kg. The trade for the smaller numbers of young bulls on offer remains steady with €5.40/kg available for R grading animals under 24 months of age.

The cow trade has remained solid. Well fleshed O grading cows are being quoted at €4.50/kg with €4.70-4.90c/kg available for good quality R grading cows. A significant proportion of the cow kill have achieved a conformation score of P in recent months and the prices available for these animals vary significantly based on grade, weight and quality.

For the week ending June 8th 2024, the average price paid by Irish beef processors for R3 increased by 4c/kg to be €5.17/kg. This was 3c/kg behind the corresponding week in 2023 when the R3 steer price was €5.20/kg. Note that reported prices exclude VAT but include all bonus payments such as in-spec bonus, breed-based producer groups etc.

EU and UK prices:

European young bull prices have held relatively stable in the early weeks of 2024. The average reported price for R3 grading young bulls was €5.07/kg (excluding VAT) for the week ending June 8th 2024. This is the same as Week 23 last year. Tighter cattle supplies and firm demand have meant deadweight beef prices in the UK have remained strong. This week the average R3 steer price increased slightly by 1c/kg to be €5.68/kg (equivalent to £4.87/kg).

Bord Bia

EU Pork Industry Faces “Nightmare Scenario” Amid Potential Chinese Import Restrictions

HAMBURG/LLEIDA, June 14 (Reuters) – Europe’s pork industry is bracing for a “nightmare scenario” of lower prices and falling profitability if China restricts imports from the region, according to industry executives and analysts. The concerns arise after Chinese firms requested an anti-dumping probe into pork imports from the European Union, as reported by state-backed Chinese media on Friday. This development escalates tensions following the EU’s imposition of anti-subsidy duties on Chinese-made electric vehicles.

In 2023, China imported $6 billion worth of pork, including offal, with more than half of these imports coming from the EU, according to Chinese customs data. A halt in these orders would result in a significant loss of business for Europe’s meat industry. Justin Sherrard, global strategist for animal protein at Rabobank, stated, “The full suspension of EU pork exports to China would be a potential nightmare scenario for the pork supply chain, with implications across the EU.”

The potential disruption could lead to lower prices and reduced profit margins for European pork producers, who may struggle to find alternative markets for their products. The ability to export pork parts such as ears, noses, and feet to China has been crucial for generating higher value from the whole carcass. While alternative markets might be found for pork muscle meat cuts, it is doubtful that the same could be achieved for variety meat exports currently shipped to China.

Germany’s pork industry, already affected by an import ban from China since 2020 due to swine fever, could face further challenges. Spain, another major exporter, may also need to seek new markets, potentially leading to downward pressure on EU pork prices.

The situation underscores the interconnectedness of global trade and the potential ripple effects of trade disputes on various industries.

Michael Hogan and Belén Carreño | Reuters

China firms seek anti-dumping probe of EU pork imports, ramping up tensions

BEIJING, June 14 (Reuters) – Chinese firms have formally applied for an anti-dumping probe into pork imports from the European Union, the state-backed Global Times reported, escalating tensions after the bloc imposed anti-subsidy duties on Chinese-made electric vehicles.

The move opens a new front in bilateral strains in one of the world’s key trading relationships after Brussels slapped tariffs of up to 38.1% on EVs made in China to shield its auto industry from competition.

China imported $6 billion worth of pork in 2023, including offal, with the EU accounting for more than half, customs data showed.

The Global Times report, posted on X, gave no details of the requested anti-dumping probe, and it was unclear which pork products would be targeted.

Pig parts that are not favoured in Europe such as feet, ears and offal are popular among Chinese consumers, providing a valuable and important market for Europe.

“Much of the imports from Europe are not muscle meat … If also (offal), China would need to import more from other countries where (offal) is not consumed in the local market,” said a livestock analyst who declined to be named due to the sensitivity of the matter.

Mei Mei Chu | Reuters

Is the Australian lamb market becoming more volatile?

Key points:

Lamb prices are more volatile as market players become more reactive to market conditions.
Slaughter can help indicate the overall supply of the market.
Relying on the lamb production life cycle to predict prices without considering the overall market can lead to unfavourable outcomes.

Many will be asking themselves what has happened to the lamb market in recent years, with the uncertainty of the market having resulted in unexpected price changes.

Prices are at the highest they have been in last two years, following good weather conditions since the El Niño was announced in 2023. There has been a rebound in prices in the previous couple of months. With lambing season beginning, prices typically rise during this time.

Historically in 2018–2019 and 2021, a clear trend appeared which reflected the seasonality where prices start to increase at the start of lambing season, reaching its peak at the beginning of spring. This trend completely breaks down in the following years due to reasons such as unpredictable world events and foot-and-mouth disease (FMD).

In 2020, prices peaked in March and continued to ease into August where prices were at their lowest. This trend is unusual but can be explained the COVID-19 outbreak.19. During this period, demand eased from processors which were unable to process more animals. This diverges from the standard yearly seasonal trend. Notably, there are a multitude of factors that influence price, but overall supply will have a larger impact on the operating environment. Lamb slaughter typically begins to dip from lambing season up until spring flush. In 2020, slaughter hovered around 300,000 to 350,000 head. This is well below the figures of 2018–19 where drought led to increased destocking. During 2020, the dynamic flipped into a rebuild where slaughter eased and there was increased attention on restocking.

During 2022 there continued to be a buck in the trend. Prices reached their peak in November at 833¢/kg carcase weight (cwt), with a dip in prices in July to 667¢/kg cwt. July is when prices would typically rise in line with the beginning of lambing season. Although the prices bucked the seasonal trend, the combination of a FMD scare, a strong season and decent processor capacity meant there was minimal price volatility. Slaughter figures were consistently strong throughout 2022 without seasonal dips. This points to increased supply in the market after a strong rebuild in 2021.

MLA

Browns Food Group Partners with AK Stoddart

AK Stoddart has become Scotland’s largest privately-owned meat business, thanks to a multi-million pound investment from Browns Food Group.

This move creates Scotland’s largest privately-owned meat business and reinforces investment in the Scottish meat sector.

The combined company’s market position will accelerate processing capacity and export capabilities, positioning the new entity as the largest Scottish owned meat business with £300 million turnover and plans to reach £500 million via a committed investment programme.

This alliance between Browns and Stoddart’s ensures the long-term sustainability of the pork and beef sectors from farm to fork.

Grant Moir, Managing Director, and Julie Fancourt, Finance Director, the remaining shareholders of Stoddart’s, will continue to manage day-to-day operations as usual.

Both companies will work together to develop and grow, maintaining the high standards of quality and brand reputation.

Mr Moir said “The key message here is that nothing changes. We have known the Browns team for many years and feel confident that this is the right decision for our business providing greater stability and growth opportunities”

Irish Sheep Trade & Prices w/e June 1st 2024

Quotes: Base quotes for hoggets from the major processors have tightened this week with base quotes of €8.80-€9.20/kg (+QA bonus) on offer. Small numbers of spring lambs have started to be processed in Irish processing plants with quotes of €9.10-9.20/kg (+QA bonus) available.

The strong deadweight trade at the minute is being driven by the tighter supplies of suitable hoggets for processing and spring lambs have been slow to come forward also.

The tight supply situation has not been confined to Ireland, with hogget throughput in the UK so far this year operating five per cent behind 2023 levels with reports of significant numbers of ewe lambs previously set aside for breeding now being processed. The latest supply forecast for the EU has indicated a two per cent decline in throughput during the first half of 2024 which equates to a 580,000 head reduction in the sheep kill. Tighter supplies are expected until the 2024 lamb crop starts to come forward for processing in significant numbers.

Demand for lamb on both the domestic and export markets has shown some signs of recovery as indicated by Kantar figures and Bord Bia’s own market insights. However, while consideration for lamb has recorded some improvement in recent months lamb continues to be the most exposed to shifts in consumer buying habits as the highest priced protein.

Prices: Last weeks reported price increased to €9.12/kg, an increase of 11c/kg from the week previous. In the corresponding week in 2023 the reported price was €7.41/kg. The deadweight trade has also remained firm in the UK regions with reported spring lamb prices the equivalent of €10.48/kg (+1c/kg) in mainland GB last week while the reported price in Northern Ireland was €9.54/kg (-1c/kg) for w/e June 1st 2024. Southern Hemisphere prices remain well below European prices which makes Southern Hemisphere product very competitive on EU markets, even with the extra costs of transport factored in. Deadweight lamb prices in Australia and New Zealand were the equivalent of €4.18/kg and €3.57/kg respectively last week.

Throughput: The total sheep kill in DAFM approved plants for week ending June 1st 2024 was 42,815 head, back marginally from the corresponding week in 2023. Throughput for the year to date has totalled 1,042,642 head, 10% behind the corresponding period in 2023. The hogget kill for the year to date has totalled 852,215 head, operating 9% behind 2023 levels. Meanwhile the ewe/ram kill year to date is back by 14,870 head (-13 %) to 101,896 head. Spring lambs have started to increase for processing with 88,612 processed so far this year.

Bord Bia

Jais Valeur to step down as Group CEO of Danish Crown

In May, the Board of Directors of Danish Crown and the Executive Board started work on a new group strategy, which is expected to be ready for presentation in the autumn.

Prior to this, Group CEO Jais Valeur has discussed with Chairman of the Board Asger Krogsgaard the need to find a long-term CEO profile to take Danish Crown through the next strategy period. The Board of Directors has now decided to accelerate this process.

“Both the Board and Jais have come to the conclusion that Danish Crown needs a new leadership and one that will be in place for the duration of the comprehensive task ahead of us. Jais is handing over a core business which in many ways is geared to delivering positive and long-term value creation for us, its owners. However, it is vital for the Board of Directors that we always pay competitive settlement prices to our owners, and the situation at the moment is such that Danish Crown’s competitiveness must be improved. Therefore, we believe it is important for all parties to start the forthcoming strategy process in the knowledge that the strategy will be executed by a new CEO,” says Asger Krogsgaard.

The process of appointing a new Group CEO has commenced. It has been agreed that Jais Valeur will head the business until a replacement has been found to ensure no momentum is lost during the recruitment process.

“Earlier in the year, I informed Danish Crown that I do not see myself as CEO of the company in the longer term. I can therefore appreciate why the Board of Directors wants to accelerate this process and look further ahead to ensure that the company can embrace its new strategy with a new Executive Board in place for the longer term.

Danish Crown has come a long way while I’ve been at the helm, but there is still a huge and also highly exciting task facing the company in the coming years. It will call for a massive and persistent effort by the Executive Board. I will now focus on steering Danish Crown through the coming period to create the best possible conditions for my replacement.

Danish Crown is a fantastic company with dedicated employees and huge unfulfilled potential,” says Jais Valeur.

“Jais has worked extremely hard for Danish Crown for the almost nine years that he has headed our business. Under his leadership, the group has been extensively developed and professionalised. It says everything about Jais’s sense of dedication to Danish Crown that he has agreed to stay on to ensure consistent leadership focus in the organisation until his replacement is ready to take over. I have great respect for that,” says Asger Krogsgaard.

Danish Crown

Australian Red Meat Continues to Gain Popularity in the USA

Lamb

During May, 36,703 tonnes of lamb were exported, which is the highest lamb export on record for a single month. The United States (US) continues to be the largest market for Australian lamb, followed by China and the Middle East and North Africa (MENA) region.

The increase in total export volume has led to a diversification in markets. For example, exports to Iraq have increased fivefold from last year to 1,386 tonnes, becoming Australia’s eighth largest lamb market in May. As Australian exports maintain a strong pace, it will present opportunities to develop market share both in Australia’s traditional key markets and emerging markets.

Key points:

Lamb exports have reached record highs, and beef exports are the highest since December 2019.
Strong demand from the United States makes it the largest market for lamb, beef and goatmeat.

Beef

There was a rise of 9% from April and 25% (113,923 tonnes) when compared to May 2023 for beef exports. This makes May the biggest month for beef exports since December 2019, and the largest May export figure since 2015.

The export growth was led by strong exports to the US, which lifted by 74% year-on-year to 31,294 tonnes, making up 27% of total exports. US declines in production are now having a noticeable impact on export flows; Australian exports to the US have been consistently high this year, and lower US exports to Japan and Korea have caused increased demand for Australian beef in those markets. Exports to Japan rose by 31% year-on-year to 19,366 tonnes, and exports to Korea lifted 9% year-on-year to 17,096 tonnes.

China was the only major market to see a decline in volumes, with exports falling 22% year-on-year to 15,359 tonnes. Brazil is the major exporter to China, and with Brazilian production currently running at near-record highs, this is impacting the Australian market share.

Mutton

Australian exports of mutton rose 11% year-on-year to 21,664 tonnes, the largest single month figure since November 2019.

China was the largest market for the month, though exports fell 38% year-on-year to 5,363 tonnes. Most of the export growth came from markets in MENA; Exports to Saudi Arabia doubled to 1,950 tonnes, exports to Oman rose by 146% to 1,284 tonnes and exports to Qatar lifted eightfold to 1,229 tonnes.

Exports to our other key markets (outside of China and MENA) remained robust; exports to Malaysia rose 26% year-on-year to 2,365 tonnes, exports to the US also rose by 26% to 936 tonnes and exports to Singapore lifted 11% to 889 tonnes.

MLA