Pork Quarterly Q1 2020: Opportunities Are Emerging from Risks

Rising disease pressures continue to challenge the global market and will remain the major change driver in global animal protein in 2020, according to Rabobank’s latest Pork Quarterly titled ‘Opportunities Are Emerging from Risks.’

“Although the severity of African swine fever’s (ASF) impact is subdued in some regions, the scope of the disease has expanded over recent months,” according to Chenjun Pan, Senior Animal Protein Analyst. “The ramifications in 2020 will lead to continuous caution on production expansion in some regions and higher import demand on the global balance sheet.” Several ongoing, regional trade-deal discussions will influence global trade flows. However, the ‘phase one’ US-China trade deal will open up opportunities for US exporters to increase shipments to China.

US beef position strengthens as China trade deal is unpacked

United States beef is emerging from recent trade negotiations with China in a far more lucrative position to supply the world’s number one beef importer as details from this month’s phase-one deal gradually unfold.

However, there is still much that needs to fall into place for the US industry before it will be a contender for market share currently held by Australia.

Rabobank’s US-based senior analyst Don Close said there was so much bundled into the agreement that it was taking a while to unpack all the issues.

The US beef industry was very pleased with the agreement – it removes more non-tariff barriers than was anticipated, he said.

“While they are initially cautious, expectations are for substantially more beef trade with China in the future,” he said.

“At the same time there are a lot of details to understand.”

In a comprehensive article on the trade deal, Meat & Livestock Australia market insights manager Tim Ryan explained the deal removes many of the technical barriers that have prohibited the US from supplying the Chinese market since it officially gained access in 2017.

These include:

a shift from strict HGP-free requirements to maximum residue levels;
recognition of US industry traceability systems, with no individual animal identification required;
and the removal of the 30-month age limit on cattle supplying the trade.
Under the agreement, China has 30 days to implement many of the changes. However, the timeframe as to when that will translate into beef on the water is less clear, Mr Ryan reported.

Mr Close said the US could send measurably more product to China under the new rules.

“We are still dealing with a substantial tariff rate that will be a challenge,” he said.

Another major unknown was the issue of beef from cattle treated with the beta-agonist ractopamine, currently banned from entering China.

A review of this is ongoing with US interests watching closely for the final ruling.

The majority of the fed cattle in the US consume ractopamine, Mr Close reported.

“Keep in mind that product is only fed for the last 28 days with no withdrawal period,” he said.

“Once the issue is resolved with China the decision to not continue with ractopamine can be accomplished in a very short time window.

Shan Goodwin

GB pork sales suffering

Total GB pig meat sales fell by 4.5% in volume, compared to the year before, in the 12 weeks to December 29, which includes the key Christmas period. Total spend remained stable though, as average prices were up 4.5%.

Primary fresh/frozen pork recorded particularly significant losses in both volumes (-8%) and value (-7%). Losses were driven by roasting joints and chops/steaks.

Although prices for primary pork moved above year-earlier levels during this period (+1%), prices have been increasing much more strongly throughout the supply chain. The SPP was 16% up on year-earlier levels by the end of 2019, and in November, primary pork import prices were 30% higher year-on-year.

Bacon sales continued to slide (vol -6%), though prices have recorded a strong 8% rise, which supported spend. There has been some growth in bacon from premium and healthy ranges while the standard tier has suffered.

Among other red meats, total lamb sales slipped by 4% in volume compared to the same period last year; prices were 2% higher. Total beef sales were quite stable in volume terms, falling by less than 1% year-on-year.


Simon King

GB pig prices for week ending January 18, 2020 – limited movement again in the SPP

AHDB Pork’s weekly pig prices, slaughter data and commentary for Great Britain

The EU-spec SPP has recorded another marginal decline in the week January 18. The average price declined by 0.09p on the week.

Prices typically fall early in the year; the five-year average decline of over the first three weeks is 2.7p. This reflects poorer demand at this time, and the potential for excess supply if too many pigs are rolled over the holiday period. This year, prices have barely moved, losing just 0.13p. The SPP remains well above both last year, and the five-year average.


Slaughter continued to rise, with the weekly estimate at 186,900 head. This is over 12,000 pigs more than at the same point last year. Reports suggest that demand was relatively steady, which would be expected at this time of year. Despite a recent lull, processors are expecting that exports to China will lift again in the coming weeks.

Carcase weights dropped back from last week (-130g) to average 86.3kg. Carcase weights tend to creep up over the festive period as pigs are rolled to accommodate processors’ kill schedules over the festive period.

In the week ending January 11, the EU-spec APP recorded some uplift, to average 163.97p/kg. In the same week the SPP recorded a slight decline. As such, the difference between the two widened to 1.57p.

For the week ending January 18, the 7kg weaner prices recorded a considerable lift on the week, putting prices almost £7 above the same week last year. Unfortunately, there was insufficient data to provide a 30kg weaner price this week.

Booming market for EU pork exports

The increase in EU pork exports, seen throughout 2019, has continued. November shipments were up 54% on the year at 315,000 tonnes. This reflects escalating Chinese import demand towards the end of 2019.

Shipments to China were over three times higher on the year while volumes to other typically important destinations (e.g. South Korea) declined significantly.

The average price of shipments to China has been increasing substantially, so it’s not surprising it has been “outbidding” volumes from other markets. In November, the average price of EU pork exports was €3.10/kg, 40% higher than last year.


The gains made throughout the year, mean EU pork exports for the year to date were up 26% at 2.48 million tonnes. Unsurprisingly, China was also the main growth market for the year as a whole.


Simon King

Climate crisis: Farmers warn of danger of blaming UK livestock

Farmers have warned of the dangers of focusing on UK livestock production or ‘inappropriate’ tree planting as ways to tackle the climate crisis.

Addressing the key findings in the latest Committee on Climate Change report, the Farmers’ Union of Wales warned that ‘agriculture alone can’t fix the problem’.

The report highlighted issues such as the need for a strong UK food production sector and the dangers of delivering emissions reductions at the expense of increasing reliance on food imported from countries with greater carbon footprints.

Agriculture is currently responsible for around 10% of UK emissions, with methane from livestock production making up just over half of this figure.

By comparison, transport and energy make up around a half of all UK emissions.

FUW president Glyn Roberts said: “This means that if we stopped producing food completely in the UK, 90 percent of the problem would still be there.

“Agriculture alone can’t fix the global problem and it will take each and every single one of us to take a hard look at what we consume and produce in terms of food, energy, electronics, motoring, travel and make adjustments.

“Farmers want to and are playing their part, and as acknowledged by the Committee switching away from Welsh and UK produced red meat would increase the nation’s carbon footprint because we have some of the lowest greenhouse gas emissions of meat reared anywhere in the world.”


China lifts 30-month age restriction on US beef imports

China and the US have signed an agreement whereby the Asian country will remove the 30-month age limit for beef it imports from the US.

The ‘Phase 1′ Trade Agreement between the US and China – signed by Donald Trump last week – will also see China recognise the US’ beef and beef products traceability system.

The agreement covers agricultural and food products moving between the two countries, across several sectors.

Under the agreement, the US will also commit to “meeting or exceeding” the requirements for maintaining ‘negligible risk status’ for bovine spongiform encephalopathy (BSE). In return, China has committed to not impose import restrictions on US beef products as long as the latter country’s BSE status doesn’t change.

In terms of hormones, China will adopt ‘maximum residue levels’ for three hormones used in US beef cattle.

For the importation of live breeding cattle, the agreement states that, within one month of its coming into force, the two countries will “commence technical discussions” on preparing a US export health certificate, with a view to begin trading in live breeding cattle “as soon as possible”.


Charles O’Donnell

EU suspends imports of Ukrainian poultry meat

KIEV (Reuters) – The European Union has suspended imports of Ukrainian poultry meat and related products after Kiev reported an outbreak of highly pathogenic bird flu, the state food safety and consumer protection service said on Thursday.

The outbreak, the first such outbreak in nearly three years, was registered on a farm in the west-central part of the country.

Ukraine is a major European poultry meat exporters.


Reporting by Pavel Polityuk; editing by Jason Neely

Stillman’s (Somerset) Ltd denies five charges of breaching safety and hygiene laws

THE owners of a slaughter house on the edge of Taunton have been accused of five serious breaches of safety and hygiene laws.

Stillman’s (Somerset) Ltd are contesting the charges relating to its operation at Staplegrove Mills, Staplegrove.

The case was mentioned at Taunton Magistrates’ Courts yesterday (Tuesday) and the defendant faces a five-day trial starting at the same court on Monday, February 3.

Stillman’s (Somerset) Ltd, based at Foxhill Farm, Blackborough, Cullompton, is accused of committing four of the offences between February 11 and 13 last year. The fifth count dates from February 15 to 18 last year.

All counts, which are denied by the company, relate to alleged breaches of the Safety and Hygiene (England) Regulations 2013.

Stillman’s is accused of:

*placing on the market a product of animal origin that is part of a detained pig carcase without a health mark;

*failing to ensure that post mortem inspection of all slaughtered animals is carried out under suitable conditions by removing the detention tape and cutting a pig carcase without the permission of the competent authority;

*failed to comply with a requirement that until post mortem inspection is complete, parts of a slaughtered animal must remain identifiable as belonging to a given carcase by cutting and removing parts of a detained pig carcase prior to post mortem inspection being carried out;

*did not have in place systems and procedures to identify food business operators from who they had received and to who they had delivered products of animal origin by allowing parts of a detained pig carcase to leave the establishment without the commercial document;

*failed to give a named person assistance or information which that person may reasonably require of them for the performance or their functions under the hygiene regulations by furnishing that person information known to be false or misleading by producing an invoice with false or misleading information.

As well as its abattoir at Staplegrove and head office in Cullompton, Stillman’s has butcher’s shops in Tiverton and Taunton. The charges relate to alleged incidents at the Staplegrove abattoir.


Phil Hill

Italy seizes 9.5 tonnes of Chinese pork to prevent African swine fever contagion

MILAN (Reuters) – Italy’s tax police seized and destroyed 9.5 tonnes of pork from China which was banned by the Health Ministry after African swine fever broke out in the Asian country, police in the northeastern city of Padoa said on Wednesday.

The illegally-imported pig meat was hidden under a shipment of vegetables from China in a storage facility near Padoa managed by a Chinese citizen.

The load of pork was destroyed and the man was charged with smuggling, trade in harmful foodstuffs and spreading of animal diseases, police added.

China said on Wednesday it found African swine fever virus in 5% of slaughterhouse samples.