Ukraine war: Meat sector braces for renewed market volatility

Russia’s invasion of Ukraine has led to renewed market turbulence across the red meat supply chain, new analysis by Quality Meat Scotland (QMS) shows.

After two years of market volatility caused by the global Covid-19 pandemic, some may have hoped for a quieter 2022, characterised by greater certainty.

However, the start of the Ukraine war has led to renewed uncertainty, with the potential for even greater disruption than the pandemic, predicts Quality Meat Scotland (QMS) economist, Iain Macdonald.

“The current crisis has once again demonstrated the complexity of global supply chains and that a sustainable and secure food supply must remain a key consideration along the path to net zero,” he said.

With the Black Sea region being one of the world’s key arable crop exporting regions, the most obvious potential impact is on an already tight grain and oilseed market balance.

The closure of Ukraine’s ports and sanctions on Russia have the potential to further reduce the supply of crops into the world market towards the end of the current marketing year and into the next.

Meanwhile, the difficulty in planting and fertilising spring crops in Ukraine will constrain supply in the next marketing year, Mr Macdonald said.

“Unsurprisingly, futures markets have seen prices surge beyond already high levels. In London, May delivery contracts have risen by a third since the start of the final week in February, while November 2022 and May 2023 contracts have seen increases of around 20%.

by Farming UK

UK secures pork market access to Chile

UK pork is to be exported to Chile for the first time.

The new deal is estimated to be worth £20million over the first five years.

Authorities have today (March 17) given the green light to 27 pork processing sites from across the UK to start commercial exports.

The UK has an association agreement with Chile, which largely maintains prior preferential trading arrangements and rules of origin.

This means that UK pork exporters can benefit from the import tariff under the Most Favoured Nation tariff of six per cent, subject to certain conditions.

AHDB international market development director Dr Phil Hadley said: “Opening the market for UK pork to Chile, following gaining access to Mexico, will provide our pig farmers and processors with another valuable market to sell their products, providing a much-needed boost for the sector in difficult times.”

By Lisa Young / South West Farmer

UK pork trade continues to struggle against global pressures

The UK pork trade continues to struggle on the main stage as issues including waning Chinese demand and oversupply within the EU persist into 2022, according to a report from AHDB.

UK pig meat exports were down by 11% in January on the previous month as the country struggles to make its mark outside a year on from its formal exit from the EU.

This has not been helped by a marked recovery in the Chinese pig herd and oversupply of pork in the EU, which continued to impact export volumes for the second half of 2021.

Duncan Wyatt, AHDB lead analyst for red meat noted that although volumes to China have been increasing in recent months, this is from a low base compared to 2020 and in January 2022 only 7,300 tonnes was exported there, down from around 11,000 in the same month the previous year. There remain three processing facilities in the UK that do not have access to the Chinese market following self-suspension in the wake of Coronavirus outbreaks.

by Iain Hoey / Pig World

Banham Poultry takeover may have broken competition rules

The takeover of Banham Poultry by Boparan Private Office (BPO) hangs in the balance as the deal may have broken market competition rules.

The Competitions and Market Authority (CMA) is investigating whether the takeover of the Attleborough poultry firm would result in the new parent company owning too too big a market share.

BPO already owns turkey giant Bernard Matthews and the 2 Sisters Food Group.

The CMA is due to make its decision about the sale by the end of next week, with an announcement expected before March 25.

The sale of Barnham Poultry was completed on October 18 2021, but it had not been fully finalised when an initial enforcement order (IEO) was issued at the start of November.

Prior to the takeover bid, the poultry factory, which processes more than one million chickens a week, had been struggling.

When the deal with BMO was first announced in October last year a spokesperson for Banham Poultry said: “We have a strong track record in investing in and supporting the food processing and agricultural sectors, and we are totally committed to maintaining production capacity and jobs at the Banham site.

“This acquisition should be viewed as very good news for Banham employees, farmers, customers and suppliers and we will ensure that their needs will continue to be fulfilled.”

by Derin Clark / Eastern Daily Press

New MD for Soanes Poultry

Yorkshire-based Soanes Poultry has recruited its next managing director from within the business.

Ben Lee, the current director of sales and marketing will succeed Nigel Upson when he retires after 10 years in his post.

Lee joined the family business in 2008 after completing his A Levels. He has worked in all areas of the business from production to sales in a variety of roles and was appointed to the senior management team as head of sales and marketing in 2019 and to the main board as director of sales and marketing in 2021.

“I have a great team around me and am grateful for the opportunities that I have been given. I’m looking forward to developing the team and guiding the business sustainably to the next level for our employees and for future generations of the Soanes family,” said Lee.

Upson joined Soanes Poultry in 2012 and was credited with returning the business to profit in 2014 which allowed significant investment in infrastructure, quality, personnel and marketing. He will remain with Soanes in a business support role until his official retirement in 2023, with Lee assuming overall responsibility with immediate effect.

By Chloe Ryan / Poultry News

Russia to ban more meat imports

Russia has extended the number of companies from which it no longer will obtain poultry meat or pork. In total around 70 companies have their name on a black list.

Meanwhile the import ban on poultry meat and pork is costing more than €100 million, EU administrators said.

Companies involved come from Germany, France, Denmark, Italy, Spain, Belgium and Hungary. Meat from these suppliers is supposed not to match hygiene criteria regarding salmonella and residues.

The European commission is deeply concerned about this development and the issue has been high on the agenda. According to European authorities there is nothing wrong with meat from the listed companies.

Russia has no membership in the World Trade Organisation yet and thus the EU cannot claim any agreements made within WTO.

Poultry World

Ripon online butcher acquired

INVERLEITH, the Edinburgh-based investment company, has expanded its portfolio by acquiring a majority stake in a Yorkshire online butchery specialist.

Ripon-based Farmison declared it now has the “backing to take the business to the next stage” further to the deal, which comes shortly after Inverleith acquired a majority shareholding in Eden Mill, the St Andrews gin and whisky distiller.

Farmison, which was founded by John Pallagi and Lee Simmonds in in 2011, is described as a leading player in the growing online premium meat and butchery market. It employs about 100 people and turned over £15 million in its most recent financial year

The investment will allow Farmison to introduce more consumers to its “traceable and sustainably sourced beef, pork and lamb breeds,” it added.

By Scott Wright / The Herald

Butchers JC Rook & Sons goes into administration

One of Kent’s oldest and biggest butchery firms with 11 shops across the county has gone into administration, putting more than 130 jobs at risk.

JC Rook & Sons has been established for more than 55 years after opening its first butchers in Dover in 1965.

But today all its shops failed to open, with bosses said to have put the business into administration.

It has left staff heartbroken and is a huge blow to the industry and high street where the firm has outlets in Broadstairs, Deal, Dover, Folkestone, Gillingham, Herne Bay, Hythe, Maidstone, Southfleet, Ramsgate and Sittingbourne.

Writing on the Broadstairs’ shop’s Facebook page this morning, manager Dean says: “It’s a sad day. JC Rook & Sons went into administration last night. I got a phone call at 8pm saying we cannot open today or in the future.

“I am absolutely heartbroken at this time in writing this, not just for myself but my fantastic team I had working for me and also for the town of Broadstairs.

“In the nearly five years I have been back at the shop, we as a team have turned it around and moved it forward.

By Gerry Warren / Kent online

Lamb prices fall well below last year’s levels

Deadweight lamb prices are under pressure, dropping for a second consecutive week to put them 43p/kg below the same week last year.

The GB SQQ for the week ending 26 February averaged 570.9p/kg, a decrease of 15.1p/kg on the previous week, according to the AHDB.

Throughput for the deadweight SQQ totalled 31,682 head – up 2,247 head (8%) on the previous week, but down 3,143 head (-9%) on the same week in 2021.

Rebecca Wright, AHDB senior analyst, said: “We have had a slightly larger carryover of lambs than we had last year, so there is just a little bit more supply available this year, which is putting pressure on lamb prices.”

Ms Wright said the price is still underpinned by reasonable demand and the lack of New Zealand product coming to the UK.

“New Zealand is still looking largely towards Asian markets at the moment and has less product available to send. Freight prices are also very high, which makes New Zealand sending large quantities to the UK quite uncompetitive.”

by Charlie Reeve / Farmers Weekly

Plans for new Scotbeef abattoir remain on hold

Plans to build a new abattoir in the north-east of Scotland will remain on hold, Scotbeef Inverurie has confirmed in its latest accounts.

The company – which is jointly owned by Scotland’s largest red meat processor JW Galloway and north-east farmers’ co-operative ANM Group – has long been planning to build a new abattoir on land at ANM’s Thainstone Business Park near Inverurie.

However, the plans were put on hold due to the “unknown impact” of Covid-19 and Brexit on the company’s marketplace.

In its latest accounts, which cover the year to February 28, 2021, JW Galloway and Scotbeef Inverurie managing director Robbie Galloway said: “In light of the continued uncertainty posed by further Covid-19 outbreaks, the directors have decided to keep the project in its current status, and the group will look to restart it when the economic outlook is more certain.”

The accounts reveal a drop in both turnover and pre-tax profits during the year.

Turnover was down slightly to £68.25 million, from £68.28m the year before, while pre-tax profits were down 48% to £350,000.

By Gemma Mackie / The Press and Journal