The Meat Site:

[Mustang Sally Farm]

Friday, December 30, 2011

Brazil Company to Expand ME Chicken Exports

BRAZIL - BrazArtis Assessoria em Comercio Exterior, an import-export company based in Brazil, has announced a campaign to expand chicken exports to the Middle East.


The endeavour is aligned with the growing Brazilian poultry exportation to the region, a statement from the company said.

The total Brazilian poultry production reached 13 million tons in 2011, almost 6.9 per cent increase from 2010, according to TradeArabia. At the same time, the exportation is expected to total 3.937 million tons, over 30 per cent of the total production, according to Brazilian Poultry Union (UBABEF).

"The Middle East region is a focal exportation and trading hub for Brazil. We are confident in the prospects for the upcoming year and will continue to support our business partners by supplying top quality halal and non-halal chicken products at competitive prices," a spokesperson for BrazArtis Assessoria em Comercio Exterior said.

Brazil's exports span across the whole GCC region including Saudi Arabia, UAE, Qatar, Jordan, Bahrain, Kuwait, Lebanon, Syria and Oman.

As part of strong tie between Brazil and the Middle East, select exports are certified by the Central Islamic Brazilian Halal Food (Cibal Halal), the Brazilian Islamic Centre for Halal Food Stuff Association.

[Mustang Sally Farm]

Friday, December 30, 2011

US Lamb T-Bones Crossed Mexican Border

US & MEXICO - Earlier this month, a truck-load of portion-controlled lamb T-bones worth approximately US$28,000 were successfully exported from Wisconsin, through the Laredo–Nuevo Laredo port of entry into Mexico.

 


The Office of Agricultural Affairs (OAA) in Mexico City and the Agricultural Trade Office (ATO) in Monterrey expedited the listing of a US lamb meat producer in the National Service of Health, Food Safety, and Food Quality (SENASICA) list of eligible suppliers. This effort resulted in the successful export of a truck-load of portion controlled lamb T-bones from Wisconsin, through the Laredo–Nuevo Laredo port of entry into Mexico.

On 1 December 2011, while monitoring border trade, ATO Monterrey became aware of a truck-load of portion controlled lamb T-bones from a US company being detained at the border. ATO Monterrey worked quickly to resolve the detention. This included contacting the US exporter and the Mexican importer to ascertain adequate background information on the detained load.

ATO Monterrey realised that the US facility should have been listed in the FSIS export library and in SENASICA's system as a slaughter/processing plant eligible to export ovine meat to Mexico and not only bovine meat. ATO Monterrey relayed these findings to OAA, who immediately contacted the US exporter, the Food Safety and Inspection Service (FSIS) in Washington, D.C., and SENASICA's head office in Mexico City. With OAA's follow up, the listing process was expedited and the U.S. exporter was listed in less than five days.

On 8 December, the truckload of portion controlled lamb T-bones with an approximate value of US$28,000 was received by the Mexican importer and distributor. According to the importer and distributor, the food-service market in Mexico for portioned controlled meat cuts is growing.

[Mustang Sally Farm]

Friday, December 30, 2011

Iowa Plant Processes Hens’ Feet for China

IOWA, US - The Cedar River Processing plant plans to export chicken feet from spent hens to China.


Over the past 40 years, livestock processing facilities in Iowa have had to diversify to stay in business. Many have grown larger, but a few have been able to survive by discovering a niche market, according to Harvest Public Media.

One plant in northeast Iowa found its niche by providing a delicacy to China.

With immigration raids forcing some plants to shutter completely and others struggling to implement stringent safety regulations while still making a profit, the most successful plants are thinking outside the box, according to John Lawrence, a livestock specialist at Iowa State University Extension.

He said: "Part of it is looking for an opportunity to grow a market just in volume alone, others may be looking for a way to add value to a product that has little value here at home. Chicken feet is one that we often hear is a delicacy in places like the orient, but may not make it your menu here in the States."

Cedar River Processing in Charles City, Iowa, is preparing to process spent hens and ship their feet to China.

To remain competitive, livestock processing companies like Cedar River have to look to outside markets, Mr Lawrence said.

He explained: "In Iowa, we're blessed with a lot of natural resources in the form of soil and land and pastures and farms raising this livestock, yet we only have a population of around three million people. It would greatly limit our economic activity if we didn't trade outside our state borders. You can take that extension one step further and say outside our national borders, such as the exports to China."

The company was looking to expand and it found fertile ground in Iowa, said Gary Shank, the general manager of the plant.

Mr Shank said: "We started looking about a year and a half ago to find a processor who would process hens with the head and feet on – nobody was willing to do that. So we started looking to see where the most spent hens were in the country and we started looking at Iowa."

Cedar River Processing is affiliated with the Charles Austin wholesale meat company of Chicago, which has been doing business overseas for years, reports Harvest Public Media. Mr Lawrence said partnerships are one of the keys to success.

He continued: "Iowa, being the largest egg producing state in the nation, has a number of spent hens that historically have had a low value and at times were even a cost to dispose of." This new plant is "doing it in such a way that they can utilize that product".

Finding enough animals to keep the facility running is imperative to the plant's success. In Iowa, that should not be a problem.

Mr Shank said: "It'll be slow at first as we get people trained. We hope to get to 60,000 birds per day in one shift. A year or so down the road we would like to put on a night shift so that we're killing 100,000 birds a day."

All that processing means a number of jobs for Charles City. Mr Shank said the company will initially employ around 60 workers and hopes to more than double that number over the next three years.

Harvest Public Media adds that Cedar River Poultry was expected to begin processing hens on 27 December.

[Mustang Sally Farm]

Friday, December 30, 2011

Ukraine Extends Licensing of Poultry Meat Imports

UKRAINE - The Cabinet of Ministers has extended the licensing of imports of fresh, chilled or frozen poultry meat in 2012, which was introduced in April 2011. A respective government resolution of 26 December was made public on 29 December.
 

According to the document, the licensing of imports of lard without lean parts, pork fat and poultry fat has also been extended for next year.

According to the State Statistics Service, in January-October 2011, imports of fresh, chilled or frozen poultry meat totaled 48,340 tons for US$48.36 million, while exports reached 45,710 tons worth USD 72.35 million. Imports of lard without lean parts, pork fat and poultry fat amounted to 23,220 tons for US$19.97 million, while exports - 30 tons worth US$60,000.

According to Blackseagrain, in 2010, imports of fresh, chilled or frozen poultry meat amounted to 154,620 tons worth US$176.63 million, whereas exports - 32,460 tons worth US$41.37 million. Imports of lard without lean parts, pork fat and poultry fat totaled 42,030 tons worth US$36.43 million, and exports - 20 tons worth US$40,000.

[Mustang Sally Farm]

Friday, December 30, 2011

CME: Calf Prices Increased Contra-Seasonally

US - Why did calf prices increase contra-seasonally? That is the question posed and answered by Tim Petry of North Dakota State University in an article published by the Livestock Marketing Information Centre this week, write Steve Meyer and Len Steiner.
 

In the article, Mr Petry discusses North Dakota steer calf prices but, as you can see in the charts below, the same question could be posed regarding Southern Plains calf prices this year.

5-6 weight (500-600 pound) steer calves hit their normal spring peak at around $160/cwt. in April before retreating to the $140 level in June and July.

Mr Petry points out that those prices “would [typically] have continued to decline into November as calf marketings increased in the Northern Plains and across the US.”

But they in fact rallied back to year-long highs in early December. The same was true in spades of lighter calves which are now trading near $185/cwt.

Mr Petry cites several factors that have driven this unusual fall rally in calf prices:

Corn futures prices have fallen sharply. The demand for calves is derived from the demand for fed cattle roughly a year hence and the cost of converting a calf into a fed steer. The feeder cattle market serves as an intermediary in that calf demand derivation. When corn futures were near $8,00 per bushel at the end of August, those calf-to-feeder-to-fed steer conversion costs loomed huge and kept calf prices low relative to heavierweight cattle markets. But the plunge in corn futures to near $6/ bushel during September promised much lower-than-expected feed costs, adding value to calves.

2012 live cattle and feeder cattle futures increased. Both of these added potential value to the end-product of calf grazing or backgrounding. Live cattle futures rose from $122 in September to near $130 by early November. Feeder cattle went from $134 to $150 from September to November.

Calf supplies are tight. The July 1 Cattle report pegged the 2011 calf crop at one per cent smaller than one year earlier and had feeder cattle supplies outside of feedlots (which includes calves) at 2.5 per cent lower than last year. Summer placements saw many more light cattle moving into feedyards, further tightening the number of calves available this fall.

A feed cost advantage caused some calves to move from the Northern Plains into Canada for feeding. That is an unusual circumstance but it certainly contributed to stronger calf prices, especially in the north.

As for the outlook, Mr Petry points out that calf prices are already at record levels, implying that more strength may be difficult to come by. Calf supplies usually increase into the spring months but they may be historically tight this year given the reduction of the beef cow herd and continuing drought conditions in the Southeast and Southern Plains.

We would add that the recent rally in corn prices will put some pressure on calf prices — though the concurrent rally in live and feeder cattle futures will blunt that impact.

Will we see $200 light-weight calves? It is a real possibility as we go into the normal spring highs. Much will depend on grazing conditions and corn prices. The size of the spring fed cattle rally (or, perhaps summer rally given 2012’s goofy placement patterns) will be another key in pushing the derived demand for calves higher.

If you are not familiar with the Livestock Marketing Information Centre, we would urge you to check it out at www.lmic.info. The centre is a cooperative effort among 28 state extension services, six federal agencies and, currently, eleven associate institutions. CME Group is one of these associate members. Opened in 1955, the Centre has been a leader in data collection and analysis for over 55 years. The website provides access to a number of analyses and to members’ homepages where more statespecific materials can be found.

[Mustang Sally Farm]

Friday, December 30, 2011

New Import Regulations Introduced

INDONESIA - The government has introduced new regulations on the import of live animals and animal products.




Two new implementing regulations under Law 18/2009 have been issued by the Government of Indonesia for the import of carcasses, meat, edible offals and processed products of animal origin.

Those are Minister of Agriculture No: 50/PERMENTAN /OT.140/9/2011 and Minister of Trade No. 24/M-DAG/PER/9/2011, both dated 7 September 2011.

[Mustang Sally Farm]

Campaign Against Antibiotics Stepped Up

ANALYSIS - The campaign against the non-therapeutic use of antibiotics in livestock production in the US was stepped up this week with renewed appeals from Congresswoman Louise Slaughter for the practice to be ended.


 

The campaign will undoubtedly be met with cries of anguish from some sections of the US farming community, who regularly use antibiotics to enhance feed conversion and boost weight gain.
 
However, there is a growing clamour of concern over the potential for a growth in antibiotic resistance in humans being passed on by eating meat from animals raised this way.
 
There is particular concern over the salmonella strain, Salmonella typhimurium, which is resistant to multiple antibiotics important for human health including beta-lactams, animoglycosides, and cephalosporins.
 
Congresswoman Slaughter has introduced a bill to phase out the practice using antibiotics.
 
"The routine, regular dosing of antibiotics to healthy animals is absolutely contributing to the rise in antibiotic-resistant bacteria," she said.
 
Meanwhile, the US beef and pig meat industries are reporting an increase in exports.
 
During October beef exports were up 10.7 per cent compared to a year ago and beef imports were down 4.4 per cent and pork exports were up 42 per cent compared to a year ago and pork imports were down 11 per cent.

October has seen net exports of pork, beef, broiler and turkey meat hit the highest month ever at 1.225 billion pounds and also represented the largest per cent of total US monthly production at 15.5 per cent.
 
The October results for pork exports were the second highest month ever at 438 million pounds year on year. Exports to China/Hong Kong were up 277 per cent, Japan up 38 per cent, South Korea up 65 per cent and Canada up 27 per cent.
 
This is reflected in global trade as Europe is also reporting strong exports of both beef and pork, with the EU now becoming a net exporter of beef following years of being a net importer.
 
The dynamics seen in the US pork exports with the majority going to Asia points to where the new demand is.

 Chris Harris, Editor-in-Chief

[Mustang Sally Farm]

US Poultry Outlook – December 2011

Sharply lower broiler chick placements and slower growth in bird weights have lowered the fourth-quarter 2011 broiler meat production estimate by 25 million pounds to nine billion pounds and resulted in decreased estimates for the first and second quarters of 2012, according to the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service (ERS).
 

Summary
 
Pork/Hogs: October pork exports were more than 42 per cent greater than a year ago, propelled primarily by very strong Asian demand, i.e. Japan, China and South Korea. Strong export growth is expected to continue through the fourth quarter, before tailing off in 2012. Total US pork exports are expected to be 5.1 billion pounds, both this year, and in 2012.
 
Beef/Cattle: Disproportionally large cow slaughter has kept average dressed weights lower during most of 2011 than if steers had constituted half or more of beef slaughter, as they typically do. Packer margins and high feed and feeder cattle prices are exerting downward pressure on fed cattle prices.
 
Beef/Cattle Trade: US beef exports are expected to increase by 21 per cent in 2011. Although US domestic beef supplies will be five per cent lower in 2012, exports should remain strong and stay about even with levels exported this year. As tight global beef supplies will continue into next year, US beef imports are expected to increase only moderately into 2012.
 
Poultry: Sharply lower broiler chick placements and slower growth in bird weights have lowered the fourth-quarter 2011 broiler meat production estimate by 25 million pounds to 9.0 billion pounds and resulted in decreased estimates for the first and second quarters of 2012. The lower production is expected to gradually lower stocks. Turkey production was basically unchanged in October as slightly higher bird numbers were offset by lower bird weights. Cold storage holdings for whole turkeys continued below those of a year earlier, putting upward pressure on prices.
 
Poultry Trade: Broiler and turkey shipments rose in October. Broiler exports totalled 689.7 million pounds, a 2.5 per cent increase from a year ago. Turkey exports totalled 59.2 million pounds, an increase of 20.7- per cent from October 2010.
 
Sheep/Lamb: The sheep industry, buoyed by strong prices and an industry policy to grow the inventory, may be poised to see its first inventory increase since 2006. Consistently high Choice Slaughter lamb prices at San Angelo coupled with reductions in production and live trade may be signaling increased retention.
 
Dairy: An improved feed price outlook is balanced by lower milk prices in 2012. Production in 2012 is forecast to rise slightly based on higher milk output per cow. Exports are likely to decline next year compared with 2011, contributing further to the lower milk price outlook.
 
Poultry

Broiler Meat Production in October Falls by Three Per Cent
 
Broiler meat production, which has fallen in three of the last four months, totalled 3.1 billion pounds in October, down three per cent from the previous year. Total broiler meat production during the first 10 months of 2011 was 31.4 billion pounds, 2.6 per cent higher than in the same period a year earlier. In October, the number of birds slaughtered fell to 700 million, down 3.2 per cent from the previous year, as integrators have been reducing the number of chicks placed for grow-out over the last several months. The lower number of birds slaughtered was partially offset by an increase in the average live weight of birds at slaughter, up fractionally to 5.94 pounds. Average broiler weights at slaughter are expected to continue higher in November and December but the rate of growth is expected to be much slower than it was over the first three quarters of 2011. With these expected changes, the estimate for fourth-quarter 2011 broiler meat production was decreased 25 million pounds to 8.98 billion pounds, 5.4 per cent below the previous year. This lowers the annual forecast for broiler meat production in 2011 to 37.3 billion pounds, an increase of one per cent from 2010. The broiler meat production projections for first- and second-quarter 2012 were each reduced by 100 three quarters of 2012. The revised forecasts in the first two quarters are down 5.3 and 4.2 per cent on a year-over-year basis, and the revised total broiler meat production for 2012 is now 36.5 billion pounds, down 2.1 per cent from 2011.
 
With relatively high corn prices forecast for the remainder of 2011 and into 2012, and with relatively weak prices for most breast meat products, broiler integrators are expected to scale back production through much of 2012. The number of chicks being placed for grow-out continues to be well below that of the previous year. Over the last five weeks, (5 November to 3 December), chick placements have averaged 154 million, down 6.6 per cent from the same period in 2010. Chick placements are expected to remain below year-earlier levels through the first half of 2012 and gradually pull even with and then exceed year-earlier levels in the second half of 2012.
 
Cold storage holdings of broiler products at the end of third-quarter 2011 were revised downward slightly to 639 million pounds, down six per cent from the previous year. With strong declines in broiler meat production expected in fourth-quarter 2011 and the first two quarters of 2012, ending stocks are expected to remain below year-earlier level through third-quarter 2012.
 
Broiler stocks at the end of October totalled 667 million pounds. This is an increase of around 28 million pounds from September but still about five per cent lower than the previous year. Stocks for most broiler products continue to be well below their year-earlier levels, with the exception of breast meat products. With lower year-over-year production expected and resulting lower stocks levels, broiler product prices are expected to get some upward pressure.
 
Prices for almost all broiler products were higher in November than the previous year. The lone exception was whole broilers, which are still considerably lower (down six per cent). Strong exports continue to place upward pressure on leg quarter prices (up 31 per cent) and other leg meat products such as boneless/skinless thighs (up 27 per cent) and whole thighs (up 44 per cent).
 
The forecast lower boiler production levels through the first half of 2012 are expected to gradually place upward price pressure on almost all broiler products. Whole bird prices are expected to be at $0.77-$0.78 per pound in fourth-quarter 2011, down three per cent from the previous year. However, prices in 2012 are expected to increase and be above year-earlier levels throughout the year.
 
October Turkey Production Even with Year Earlier Output
 
Turkey meat production in October totaled 525 million pounds, almost identical to production a year earlier. Although the total meat production was unchanged, the number of turkeys slaughtered rose by 0.5 per cent to 23.3 million. The increase in the number of birds slaughtered was offset by a slight decline in the average weight at slaughter from a year earlier to 28.3 pounds.
 
The fractional growth in turkey meat production in October contrasts to the strong expansion in production over the first half of 2011, when production was up 5.5 per cent compared with the same period in 2010. Over the first 10 months of 2011, turkey meat production has been 3.4 per cent higher. The second half of 2011 is expected to be a sharp contrast as production was only 0.5 per cent higher in the third quarter, and the fourth-quarter production forecast is 1.5 billion, only 0.3 per cent above the previous year.
 
With little growth in production and turkeys being taken out of storage in preparation for the Thanksgiving holiday, stocks of all turkey products fell by over 100 million pounds between the end of September and the end of October. Total turkey stocks were 407 million pounds at the end of October, down almost one per cent (0.7) from the previous year. This is a significant change from stocks at the end of September that were 7.6 per cent higher than the previous year.
 
Declines in stocks of whole birds accounted for 69 per cent of the decline in total turkey product stocks from September to October. Whole turkey stock levels always decline at this point in the year but stocks of whole birds fell by almost 71 million pounds, dropping the level for whole birds to 209 million pounds, almost 14 per cent lower than the previous year. Whole bird stocks at the end of September were only 2.6 per cent lower than the previous year. The decline in stocks of turkey products was much less (down 32 million pounds), and stocks of turkey products at the end of October were 199 million pounds, 18 per cent higher than in October 2010.
 
With the steep October decline, the estimate of ending stocks for 2011 was lowered to 205 million pounds, down 10 million pounds from the previous estimate but still seven per cent higher than a year earlier. The stock estimate for first-quarter 2012 was lowered by 15 million pounds to 325 million. However, the estimates for the second and third quarters were both increased to 500 million pounds. Anticipating a strong draw-down in stocks during in the holiday period in 2012, ending stocks for 2012 were reduced by 10 million pounds to 200 million.
 
During the first 11 months of 2011, the national price for whole hens has been higher than the previous year on a year-over-year basis. Prices for November were $1.14 per pound, up seven per cent from a year earlier and 38 per cent higher than the 2009 price. Prices are expected to decline seasonally in December but remain well above a year earlier, and the average for fourth-quarter 2011 is forecast at $1.10-$1.11 per pound, an increase of over six per cent from fourth-quarter 2010. Lower stocks of whole birds during most of 2011 have placed upward pressure on prices. Even with higher production, low stock levels at the start of 2012 are expected to pressure prices higher and whole hen turkey prices are expected to average $0.90-$0.94 per pound in first-quarter 2012, an increase of approximately two per cent from the previous year. However, production gains in 2012 are expected to gradually reduce prices, with hen prices in the second and third-quarters lower than the previous year.
 
Over the first 10 months of 2011, turkey poults placed for grow-out totalled 232 million, an increase of 0.9 per cent from the same period last year. The small increase would indicate that turkey production in the first half of 2012 is likely to be close to or slightly higher than in 2011. Given the strong wholesale prices for whole birds and most turkey products in the second half of 2011, turkey producers would normally be more heavily expanding production, but forecasts for continued high feed prices and a weak domestic economy through 2012 are likely contributing to producer resistance to expand.
 
Table Egg Production Continues Higher
 
The table egg laying flock in October was estimated at 282 million hens, 0.9 per cent above the previous year. Changes in the table egg flock numbers on a year-over-year basis have generally been lower in 2011. The flock size was higher in only three of the first 10 months, although table egg production has been higher throughout the year. The table egg flock is expected to remain higher than the previous year through the remainder of 2011 but only slightly. At the beginning of November, the estimate of the number of birds in the table egg flock was down but the decrease was less than one per cent. With expected higher feed prices and continuing economic uncertainties, egg producers are not expected to have much of an incentive to expand production in 2012.
 
Even with table egg production higher throughout the first 10 months of 2011, total production has been 5.5 billion dozen, only marginally higher (0.8 per cent) than the same period in 2010. In October, production was 562 million dozen, an increase of 1.9 per cent from the previous year. Fourth-quarter 2011 table egg production is estimated at 1.69 billion dozen, or about 1.1 per cent higher than the previous year. Even with the higher forecast, table egg prices are expected to remain strong through the end of the year. The fourth-quarter 2011 wholesale price for one dozen Grade A eggs in the New York market is forecast to average $1.27 to $1.28, up about 10 cents per dozen from third-quarter 2011 and about four per cent higher than a year earlier.
 
Hatching egg production has been lower than the previous year through the first 10 months of 2011. Over the first half of 2011, hatching egg production was down by relatively small amounts per month but since July, the declines have been much sharper, averaging around three per cent per month. Although there have been some declines in the number of egg-type eggs produced, the majority of the decline has come from a lower number of broiler-type eggs. The decrease in the production of broiler-type eggs is expected to continue through the first half of 2012 or until broiler integrators begin to expand production.
 
Total Egg Exports Fall in October
 
Monthly exports of eggs and egg products had been mostly higher in 2011 on a year-over-year basis through September but fell in October to the equivalent of 22.4 million dozen eggs, 13.3 per cent below a year earlier. The exports were down to Canada, Hong Kong and Germany and a number of smaller markets but were partially offset by higher shipments to Japan and Mexico. Exports of both shell eggs and egg products declined in October, with shipments of shell eggs at 11.5 million (down 12 per cent) and shipments of egg products at the equivalent of 10.9 million dozen (down 12 per cent). The October shipments were likely impacted by strengthening US prices. Domestic shell egg prices have continued to strengthen in November and into December. Over the first 10 months of 2011, total egg shipments were 232 million dozen, up 6.7 per cent from the same period in 2010.

Poultry Trade
 
Broiler shipments remain strong in October
 
October broiler shipments were up from a year ago. Broiler meat shipped in October 2011 totalled 689.7 million pounds, a 2.5 per cent increase from the same period in 2010, although last October shipments in 2010 were at the highest monthly volume recorded that year. There are several notable differences in trade flows between 2011 and 2010. Shipments to Russia in October 2010 totalled 211 million pounds, which accounted for 31.5 per cent of the US broiler exports for that month. In October 2011, Russia imported only 64.4 million pounds, a 69.5 per cent reduction. One reason for this big change is that imports were high in 2010 as the US re-entered the Russia’s market following resolution of trade restrictions.
 
Another market that made a considerable difference in 2011 October broiler shipments was Hong Kong. Broiler shipments to Hong Kong totalled 55.7 million pounds in October 2011, a 45 per cent increase from last October. In October 2010, shipments to Angola totalled only 14.4 million pounds. However, 12 months later, these shipments rose to 60.5 million pounds, a 320 per cent increase from a year ago. Secondary markets also imported more broiler meat in October 2011, offsetting lower shipments to Russia.
 
Turkey shipments rose in October
 
Turkey shipments totalled 59.2 million pounds in October, up 20.7 per cent from a year ago. Shipments to the largest US market, Mexico, totalled 31.4 million pounds, accounting for 53 per cent of total turkey exports. Exports to China, the second largest US turkey market, rose considerably in October, from 3.2 million pounds in October 2010 to 5.2 million pounds in October 2011. Sizable turkey shipments also went to the Philippines, for an increase of over one million pounds from a year earlier. Through October, turkey exports are up 23 per cent in 2011.

[Mustang Sally Farm]

Thursday, December 22, 2011

This Week's Poultry News Round-Up

Looking ahead to 2012 and beyond, will the Chinese economy power the global meat industry? Meat consumption in China is expected to increase and the meat processing industry will develop further – albeit at a slower place than over the past decade.
Following recent criticism of Canada's international poultry trade policy, the Executive Director of Chicken Farmers of Canada, stressed: "We stand alone in providing clean, consistent and transparent access to our market, while other countries hide behind phoney non-tariff barriers."
 Action has already begun at European level to punish Member States that have made little or no effort to conform to the new hen welfare law, which comes into force across the EU on 1 January.



 

Is the Chinese bubble about to burst? For some time now, the growth rate in China has been the most rapid of the BRIC countries (Brazil, Russia, India and China). China's growth has also been dragging the rest of the world economies along behind it, shining as a beacon to the faltering economies in Europe and the US, wrote ThePoultrySite Editor in Chief, Chris Harris.

Tthere has also been growth in wealth and in the middle class in China and the population has been moving to an urban way of life. These developments have also brought about changes in eating habits: meat and protein diets are replacing cereals and crops. Meat consumption in China reached around 59kg per head in 2010, and the processed and pre-cooked product markets are growing.

The International Monetary Fund forecasts that China's economy that spiked at over 14 per cent growth about four years ago, has now settled to a growth rate of about nine per cent. And the meat industry there is virtually keeping pace with it. An IBIS World report, published this month, forecasts that the industry will develop at a rate of 8.3 per cent a year, reaching $82.38 billion in 2016.

Revenue from the meat processing industry in China this year is expected to have risen by 13 per cent year on year to $55.24 billion. On average, since 2006 the industry has seen a 22.5 per cent rise in value.

Prospects for the future depend on how and whether the Chinese government can keep a cap on inflation. The latest figures show it running at 4.2 per cent in November, down from the July figure of 6.5 per cent.

If inflation is kept in check and the economy continues to expand, meat consumption is expected to increase and the meat processing industry will develop further – albeit at a slower place than over the past decade.

Turning our attention from Asia to North America, Canada pledged to support free and open trade at the World Trade Organization (WTO) ministerial meeting. However, there was no mention of Canada's protected poultry or dairy industries, wrote Charlotte Johnston, editor of ThePoultrySite.

At the meeting in Geneva, Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway said that free and open trade is the best way to create jobs and economic growth for people around the world.

But while over the last five years, Canada has pursued an ambitious and active free trade plan to open doors for Canadian businesses around the world and is on the way to becoming the first tariff-free zone for manufacturing imports in the G-20, back home, the situation is quite different: the poultry and dairy industries are protected by supply management systems. Canada is coming under criticism from abroad over this apparent anomaly in its trade policy.

However, Mike Dungate, Executive Director of Chicken Farmers of Canada, responded to the article, saying Canada's trade policy is misunderstood. While Canada has a great deal of export interests in agriculture (world's 4th largest exporter), Canada is also the 6th largest importer of agricultural products.

He stressed that Canada is not a closed market for dairy and poultry: it is, in fact, the 16th largest importer of chicken in the world and the 3rd most valuable market for US chicken exports.

"We stand alone in providing clean, consistent and transparent access to our market, while other countries hide behind phoney non-tariff barriers. While many countries have implemented protectionist measures in the past two years, Canada has maintained the access it has always provided to its chicken market – access that is almost twice our WTO commitment," said Mr Dungate.

European Union Commissioner John Dalli says that action has already begun at European level to punish Member States who have made little or no effort to conform to new hen welfare laws in the EU. The ban on conventional battery cages for egg production in the region comes into force on 1 January 2012. Those producers who have invested in alternative housing systems for their hens fear that their local markets will be flooded with 'illegal' eggs produced in other countries where little investment and effort have been made to comply with the directive.

Turning to bird flu news, the discovery of one dead wild bird in Hong Kong last week with H5N1 highly pathogenic avian influenza led to the immediate closure of live bird markets when infected carcasses were discovered at a market and authorities across China are now on alert. There have also been four new outbreaks of H5N1 in poultry in Bangladesh and two more human victims have been reported in Egypt, one of whom has died.

 Jackie Linden, Senior Editor

[Mustang Sally Farm]

Key Points on Bird Flu Control Outlined at WVPA Meeting

Avian influenza viruses have been and remain important public and animal health due to economic and human fatalities that cause, according to Dr Alejandro Garcia of Laboratorios Avilab in Mexico. Chris Wright, senior editor, reports.

 



Dr Alejandro Garcia
 
Dr Alejandro Garcia of Laboratorios Avilab in Mexico shared his experience of avian influenza with delegates during the XVII Congress of the World Veterinary Poultry Association (WVPA), held in Cancun, Mexico in August 2011.

The Avian Influenza virus (AIV) is an animal disease; veterinarians and vet scientists play an important role in the management in preventing humans coming into contact with the disease.

We must resolve the problem of the carriers (wild and migrating birds) because they mobilise the virus, putting at risk commercial animals, said Dr Garcia. The control and prevention of them are essential in avoiding a possible human pandemic.
 
Control and Eradication of Avian Influenza
 
The best action for a country, zone or compartment in the control and prevention of AIV is the total eradication by slaughter of diseased animals' destruction of carcasses and all the elements related to infected birds (bedding, feed etc.), said Dr Garcia.

Washing and disinfection of the barns and contaminated material according to the standards specified by the OIE in its Code of Animal Health Land, is another of the practices to be implemented.

In some countries, the characteristics of the poultry industry and the circumstances under which there have been outbreaks and epidemics caused by viruses of high and low pathogenicity AI, force the use of vaccination.

Vaccination is a useful tool for the control of avian influenza (AI) outbreaks, continued Dr Garcia, but its use is forbidden in most countries worldwide because of its interference with AI screening tests and its negative impact on poultry trade.

Currently licensed AI vaccines increase host resistance to the disease but have a limited impact on the virus transmission, he said. To control or eradicate the disease, a carefully conceived vaccination strategy must be accompanied by strict biosecurity measure.

Recently, the World Organisation for Animal Health (OIE) and the United Nation's Food and Agricultural Organization (FAO) have recommended the use of vaccination against H5N1 HPAI virus in developing countries where mass culling of poultry is no longer acceptable for ethical, cultural, ecological and economic reasons.
 
Conclusions About Avian Influenza

Based on the author's extensive knowledge of avian influenza and its effects on the poultry industry, Dr Garcia offered 21 important observations about the disease.

1. AIVs have been and remain important for public and animal health due to the economic and human fatalities they cause.

2. AIV, by its genetic nature, has the ability to mutate very quickly, producing viruses that are mostly new to the immunological memory of the human or animal populations. This feature of the virus also generated highly pathogenic virus from one that had originally been of low pathogenicity.

3. AI is a very dangerous virus and is capable of changing its life cycle – either by glycosylation, deletion, insertion or substitution events, some amino acids in different proteins in their genomes etc. – when it is under pressure from the animal's immune system. It does so in order to survive.

4. The role of migratory birds is still inconclusive in the spread and occurrence of the disease in affected countries.

5. The presence of the disease in poultry populations is determined primarily by discrete biosecurity measures and management of products and subproducts, as poultry flocks are free of the disease are found in areas where the virus is endemic.

6. AIV subtype H5 or H7 has killed humans of all ages from young children to adults.

7. It is known that H5N1 has the capacity to be transmitted occasionally from human to human. Such transmission, however, has only occurred in exceptional instances, usually involving very close contact with a patient during the acute phase of illness. To date, H5N1 has not spread beyond one generation of close contacts.

8. The risk of transmission and adaptation of AIVs from animals to humans and the increase in mortality is low, e.g. Asian H5N1, H1N1 North America. This is related to the cell receptors that have each species in their epithelial cells of the virus target organs.

9. Vaccination has helped to mitigate the disease in the poultry population and reduced the number of deaths in humans.

10. There are areas in developing countries, which lack electricity and have AI vaccines of poor efficiacy, where it is difficult to control the disease in poultry populations.

11. Different degrees of protection and immune responses have been observed in some avian species, e.g. chickens versus waterfowl or gulls and ducks, that have been vaccinated with inactivated emulsified AI vaccine.

12. Maternal antibodies influence the response to the vaccine. In some cases, the antibodies completely block the response, leaving the poultry susceptible to disease.

13. The smuggling of live or dead animals as well as products and by-products of poultry, may be the most important source of spread of a disease-free country – more than the presence of migratory birds.

14. Live bird markets represent an ideal environment for the transmission, survival and crossing of the virus.

15. When statutory notifiable avian disease is confirmed, action to confine and stamp out disease includes movement controls on susceptible species in the area around the premises, enhanced biosecurity, culling of susceptible poultry on the farm, and cleansing and disinfection of the premises.

16. The elimination of highly pathogenic virus either H5 or H7 subtype in poultry flocks can be achieved as long as affected and exposed birds are slaughtered and movement of poultry products and by-products is strictly controlled. Epidemiological surveillance and biosecurity are also required.

17. The measures taken by developing and underdeveloped countries to free poultry flocks from the disease are dramatically different and depend on the level of financial support (compensation), the first countries, affected birds slaughtered, the suspect and the adjacent, coupled with strict biosecurity measures and movement of poultry products and by-products, which have to comply with health campaigns, immunisation and different levels of biosecurity measures.

18. Timely notification of AI virus and transparency of governments and people involved in the poultry-animal interface help to control and possibly eradicate the disease.

19. AIVs emerge and re-emerge: for example, in the Netherlands, subtype H7N1 from 2010 re-emerged in March 2011.

20. The press and other media (TV, radio, internet, etc) and some academics have been responsible for magnifying and sometimes exaggerating the pathogenicity of the virus. This has affected the productive sectors (animals) and the economy of a country, said Dr Garcia. He cited the example of Mexico in 2009, when H1N1 swine flu, which is then considered a pandemic. A year later, the title 'pandemic' was dropped but not before the sector was severely damaged. It is known that there were pressures to classify this virus as pandemic in 2009.

21. The presentation of pandemic or epizootic of any subtype of the AIV is difficult, concluded Dr Garcia. Protection involves not only humoral immunity but also cellular and innate forms and there is also cross-protection between some subtypes, e.g. between H9N2 and H5N1, as they share some peptide homology along the HA protein.

[Mustang Sally Farm]

Wednesday, January 04, 2012
CME: Meat Demand Maintains Annual Increase
US - 2011 ended with a piece of good news as the National Restaurant Association’s Restaurant Performance Index (RPI) for November hit a five-month high, indicating a continuing rebound for the foodservice sector. It also showed that US beef, pork and chicken demand are maintaining year-on-year increase as of October, write Steve Meyer and Len Steiner.


These indexes, which we compute monthly, appear in the chart below. All observations except the last represent calendar year changes from the year before. The final observation in each series represents the 12 month period from November 2010 to October 2011, the last month for which data are available.

The indexes represent overall domestic consumer level demand for each protein since they are based on per capita consumption and real retail prices. “What about foodservice product?” is a usual, and legitimate, question when we mention that retail prices are used in the index calculations.

The retail price is used for two reasons. First, there are no data for the price of foodservice protein components that, to our knowledge, are publicly available.

Second, the retail price should be a shadow value of product sold through foodservice in that any increase in foodservice volume will reduce the volume available through retail outlets and thus push retail prices higher.

If readers see the latter as rationalisation, we will have to plead guilty. The fact remains that no other data are available.

The trailing-twelve-month indexes for bot pork and chicken declined when October data were added as the October year-onyear index changes for both species were negative.

Chicken demand in October was six per cent lower than in October 2010 while pork demand was down 4.6 per cent, Oct ‘10 to Oct ‘11. The October 2011 beef demand index was 0.9 per cent higher than one year earlier.

[Mustang Sally Farm]

Friday, January 06, 2012
CME: 2011 Year of Adjustments for Meat Sector
US - 2011 will go down in the history books as a year of continued adjustments for the US beef, pork and broiler sectors, write Steve Meyer and Len Steiner.


All three were still adjusting to higher feed costs in an effort to restore long -run profitability. The differing biological characteristics of the three species, of course, were impacting those adjustment processes.

The vaunted flexibility that the chicken’s short reproductive cycle provides to the broiler industry proved to be both a blessing (can react quickly) and a curse (quick reactions leave you open to unexpected reversals).

The curse of a long reproductive cycle prevented the beef industry from going for the “head fake” of lower corn prices in 2009 and early 2010. Mother Nature, of course, made sure that the beef industry did not launch itself into a premature expansion by severely impacting grazing conditions in some major beef cattle regions. Meanwhile, the pork industry appears, for the moment, to have made a painful reduction and, perhaps, learned its lesson from quick output reversals of the past that led to severe price pressure.

The charts at right show annual data for slaughter and production for the three major species. The overall trends and patterns are, we think, very telling. Among the lessons are:

Each species has relied upon heavier slaughter weights to increase output. The practice began with hogs in the ‘60s when some major improvements in leanness and, consequently, feed efficiency, began. Cattle followed in the ‘70s and chickens joined the trend to higher weights in the ‘80s.

This trend is not over — at least for cattle and hogs. Feedlots, hog buildings and packing plants are all denominated in HEAD. Products are still sold by the POUND. Increasing POUNDS PER HEAD is an obvious and easy way to increase revenue per unit of physical plant.

The only limit will be the size of cuts but new processing techniques will, we believe, solve most problems that arise there. The chicken sector may be different because its weight increases are driven by, in essence, a separate boneless/skinless breast business — which has NOT performed well of late.

There was, for many, many years, no such thing as a chicken cycle. The primary reason, of course, is that chicken demand increased steadily and, due to that reproductive cycle, companies could respond quickly. The growth pattern has obviously been slowing, though, and some cyclical characteristics are appearing in the annual data. Will they continue?

There was, for many, many years, a pronounced hog cycle that has virtually disappeared. Take away the 2007-2008 output surge driven by circorvirus vaccines and hog slaughter and pork production have steadily risen since output finally settled after the 1998- 1999 bloodletting in the production sector.

Even the cattle cycle (historically eight to 10 years in length) has waned. Has it fallen by the wayside, too? Or has it ust lengthened and flattened? The slaughter and production dip of 2004-2005 was caused primarily by fewer Canadian cattle in the wake of their first BSE case in 2003. Take away that reduction and cattle slaughter and beef prod have declined in a very steady manner since 1996 and 2002, respectively.

[Mustang Sally Farm]

Friday, January 06, 2012
OFC - Reduce Waste to Meet Food Demand
GLOBAL - In the next 25 to 50 years, food production will have to double to keep up with growing populations and growing consumption, writes editor in chief, Chris Harris.

However, if global wastage of food is cut, then production will not have to grow at such a rate to meet demand, the UK government's chief scientific advisor, Prof Sir Bob Watson told the Oxford Farming Conference.

Sir Bob told the conference that recent reports such as the Foresight Report and the study by Sir John Beddington's Commission on Sustainable Agriculture, showed that the current food production system is unsustainable.

He said there is huge wastage in present food production and there are growing concerns over the excessive use of nitrogen and fertilisers to produce food.

"We are not feeding the world sustainably and at the same time one billion people go to bed each day hungry, and that is not acceptable," said Sir Bob.

He told the conference that there will be a growing demand for better food in developing and progressing countries such as China, but food production is also in competition with land, water and energy usage. He added that climate change is also having an effect on food production, with drought and floods in some regions.

He said that taking no action is not an option and there is a need for a change in attitude right along the food production chain.

"Food demand will double in the next 50 years, but you don't need to double production if you get rid of wastage," he said.

However, he said the challenge is to do it with less labour and to increase yields with less land.

He said that food production only needed to be increased by between 30 and 60 per cent if waste is cut.

He said that in developing countries a vast amount of the food that is produced is wasted either on the farm or in transport to market, whereas in developed countries such as the UK and the US, the majority of the wastage comes in the home, in retail and in food service.

While reducing waste will be one part of meeting the challenge of feeding a growing population, research and development also need to be addressed.

He said that it will be necessary to access new technology in seeds, agricultural chemicals, irrigation and to address weather changes, as climate change will also be critical in meeting food demands.

"Science will be critical in meeting then challenge of climate change, biodiversity loss and increased pollution," he said.

Prof Watson said to meet these global challenges it is necessary to build food stocks, trust and cooperation and to champion and non-integrated approach to food security and support sustainable intensification as well as press for trade liberalisation in the common agricultural policy and common fisheries policy.

He said that agriculture has to be at the centre of sustainability and diversification.

He added that it is necessary to manage the ecosystems better and improve food production with a smaller footprint.

To achieve innovation along the whole food production chain, science and technology will be critical.


Chris Harris, Editor-in-Chief

[Mustang Sally Farm]

Food Processing Sector in Russia

The Russian economy has entered a “post-crisis” period of moderate growth. Domestic demand, which collapsed in 2009, has been gaining strength, according to the USDA Foreign Agricultural Service.

 


The food processing sector in Russia continues its recovery, supported by rising disposable income, increasing real wages, declining unemployment and growing food expenditure. During the January to August 2011 period production of the following increased versus 2010: meat and offal, sausages, meat products, dry milk and cream, butter, canned milk, pasta, sugar, confectionery, frozen fruits and vegetables, and mineral water. However most food processing companies believe that the food industry has not fully recovered yet from the crisis. The majority of raw materials and ingredients used by Russian food processors/manufacturers are imported. This leaves ample opportunities for U.S. exports to Russia. WTO accession, which is anticipated for 2012, should ease import restrictions for some products, such as dairy products and certain meats, from the United States.

SECTION I. MARKET SUMMARY
 
Although the food processing sector in Russia weathered the last global economic recession well, it is still being heavily influenced – both positively and negatively -- by the past two global economic crises. In 1998, Russia suffered a financial crisis which turned out to be a starting point for growth in the local food processing industry after a long period of stagnation. Locally manufactured products were affordable for local consumers compared to imported products and manufacturers improved quality to meet consumers’ needs and seize a larger market share. Prior to the latest economic downturn, the food industry had been growing by about 10% per annum. Foodmag.ru estimates that from 2005 to 2008, investments into food processing enterprises totaled more than 135 billion rubles which demonstrates the attractiveness of this sector for both Russian and foreign investors. Producers of meat and meat products, dairy, edible oil, beverages, and confectionary items made the most capital asset improvements. Two-thirds of total investments were used for modernizing equipment to increase labor productivity, create efficiency, and lower overhead. New equipment helped strengthen Russian food processors making their products more competitive.
 
Increased expenditures on food products in 2011 indicate that the Russian food industry has joined other markets -- such as the car, consumer electronics, apparel and shoes, tourism and construction materials markets -- demonstrating active growth and recovery from the 2008 crisis. However, according to Ernst & Young, as of 2011 most food processing companies do not think that the food industry has fully recovered from the 2008-2009 slow down. Internal factors including drought, fires and crop failure plagued 2010. In addition, the food sector had to cope with the consolidation of certain beverage and dairy products manufacturers and the Retail Trade Act 1 which put limits on pay-offs to retail buyers and mangers among other rules that have impacted food processing companies directly or indirectly. The global economic recession also led the majority of companies to reconsider their development strategies and direct their efforts toward, first, optimizing their business processes in order to raise their operational efficiency. Secondly, companies are diversifying in order to reduce vulnerability on any one sector.
 
The most crisis-resistant sectors were businesses that specialized in manufacturing primary goods and that received government support, namely: farming, grain processing, manufacturing flour, bread production, milk production and dietary foods. To the extent that food processors relied on these sectors they have benefited. However, the majority of raw materials and ingredients used by food processors are imported.
 
The food processing industry is made up of foreign and domestic manufacturers with the latter dominating number wise. The biggest Russian food manufacturers are: Baltika Brewery Company, Unimilk, “United Confectionaries”, “Cherkizovo”, “Efko” Groups of Companies. Among the most well-known foreign food manufacturers in Russia are Kraft Foods and PepsiCo which invested heavily in WimmBill Dann in 2010-2011 These foreign investors are strengthening their positions with investments and marketing activities that overshadow domestic companies. The leaders in this market are focused on consolidation and expansion into regions outside of Moscow and St. Petersburg.
 
The factors that have restrained faster growth in the food-processing sector are as follows:
 
•Higher prices of raw materials
•Growing demands from large retail chains and greater competition among food manufacturers for shelf space
•Problems with recruiting qualified personnel
•Sales and distribution problems of manufactured products
•Cost of public utilities
•Logistics problems
•Significant debt load
•Lack of financing in necessary volumes, terms and at affordable interest rate
•Lack of developed distribution system

Table A. Russian Food Processing Sector 2007-2010
 




There was significant contraction in the number of businesses after the 2008 economic crisis. However, the data suggests that economically viable firms survived and more than filled the void. For example, the value of food production actually increased each year during the 2006-10 period, and as up by 12.6% in 2010. Net profit was also up in 2010, by 15%.
 
According to Russian Federal Statistics Service, in January-August 2011, the production index of food products amounted to 100.6% against 104.9% in January-August 2010 including broader categories such as meat and meat products - 106.9%, pasta products - 100.6%, mineral waters and soft drinks - 101.1%, beer - 100.3%, sugar - 125.2 percent. Compared to the same period of 2010, output of the following products increased: meat and offal (7.5%), sausages (4.5%), meat products (12.2%), dry milk and cream (21%), butter (2.9%), canned milk (1.7%), pasta (3.1%), sugar (21.5%), confectionery (4.2 %), frozen fruits and vegetables (by 48.8%), mineral water (5.7%). Production of flour from grain crops was almost the same as last year (growth rate - 0.4%), as well as pasta (0.5%) and beer (0.4%). On the decrease were: production of cereals (17%), cheese and cheese products (3.5%), dairy products (3.4%), vegetable oils, unrefined (16.7%), canned fruits and vegetables (1.1%). The decline in output of dairy products was associated with decreased domestic raw material output. Decreased production of vegetable oils is due to reduced production of domestic oilseeds in 2010.
 
The major consumer of food ingredients in the Russian food market is the meat processing industry with average annual growth of 15%. One of the latest trends in the meat processing sector is increasing emphasis on “natural” food ingredients. Meat processors source both domestic and imported ingredients. Domestic poultry and pork production have shown steady growth while beef production decreased in 2010. Ernst and Young experts explain that the poultry production was hampered in 2010 by the drought that drove up feed prices which make up 70% of production cost and to a lesser extent by the lifting of the ban on American poultry imports. The poultry industry is the most consolidated sector and is comprised of around 600 producers. According to Russia’s State Statistical Service (Rosstat), farms of all types produced about 4.6 MMT of poultry and livestock for slaughter (live weight) in the first half of 2011, 3.8 percent more than January-June 2010. Agricultural enterprises increased production by 7.4 percent at the same time. The Russian Ministry of Agriculture (MinAg) reported that Russia will increase livestock production by 2.8 percent, while total agricultural production will grow 10.0 percent in 2011. The poultry market appears to be close to self-sufficient although imports are still well represented in the processing sector. Pork production totaled 739,000 tons in 2010 which is 14% more than in 2009. Since 2005, pork production has more than doubled. Despite the fact that some anticipate self-sufficiency in pork production within 3-4 years, pork imports remain rather high; in 2010 pork imports totaled 625,000 tons which is 2% lower than in 2009. The biggest pork suppliers are Brazil (34.4%), Germany (17.6%) and Denmark. Meat imports are subject to a quota system which is as follows for 2012: fresh and chilled beef – 30,000 tons, frozen beef – 530,000 tons, fresh, chilled and frozen pork- 320,000 tons, pork trimmings – 30,000 tons, poultry meat – 250,000 tons, mechanically deboned poultry meat (mince) – 80,000 tons. Upon WTO access the quotas will likely change and exporters should monitor the FAS Attaché reporting page for updates.
 
According to the Agrarian Marketing Institute, by 2012 meat production in Russia will increase by more than 30 percent compared to 2009 level. The main growth is expected in the poultry market where the poultry share is expected to exceed 40 percent of the Russian market’s meat production. Beef’s declining share will continue in spite of the forecasted increase in beef production.
 
Effective January 1, 2010, Russia requires all imported poultry products be processed with only those ingredients approved for use in Russia. Please consult the FSIS Export Library for a list of approved ingredients <http://www.fsis.usda.gov/Regulations_&_Policies/Russia_Requirements/index.asp>. Also since January 1, 2010 frozen poultry was prohibited for use in processing select foods (e.g., baby food and food for nursing or pregnant mothers). Please consult your importer or USDA FSIS for guidance on a case-by-case basis.
 
The dairy products market is valued at $16-17 billion and is growing annually by 7-9% in terms of value. Wimm-Bill-Dann and Unimilk maintain the dominant positions in the Russian dairy market. 2010 was a significant year for the Russian milk processing market: Danone took over Unimilk then PepsiCo acquired Wimm-Bill-Dann. The Russian dairy market produces milk, cottage cheese and sour cream and Russians are very loyal to local brands. However, in 2010 Russia imported 255,000 tons of dairy products and cheese.
 
The Russian juice market is worth $6 billion with 2.9% growth compared to 2009. The leading players are international companies PepsiCo and Coca-Cola which in 2010-2011 acquired, respectively, Wimm-Bill-Dann and Nidan Soki - the biggest Russian manufacturers. PepsiCo and Coca-Cola have a collective market share of almost 85%.
 
Experts assess the Russian confectionary market at around $12 billion annually which makes Russia the second-largest confectionary market in the world. The confectionary sector is consolidated around a few domestic and foreign players. Top players include United Confectioners which brings together 15 manufacturers including Rot Front, Babaevsky and Krasny Oktyabr which are household names. Nestle, Roshen, KDV-Group Lamzur’, Neva, Slavyanka, and Sladko follow the leaders and also have huge production facilities, wide assortment, active brand support, effectively developed distribution and logistics. Baked products occupy the largest share of the market - approximately 55% followed by chocolate products (32%) and sugary products (13%). Production of chocolate and baked products in 2010 grew by 12.3% compared to 2006 and totaled 1.3 million tons.
 
The size of Russia’s specialized food ingredients market is evaluated around more than $2 billion. This sub-sector has quickly recovered after the 2008-09 crisis showing 5% growth in 2010 due to domestic food processing industry demand. RBK Research experts forecast 10% growth in 2011.
 
Russia’s specialized food ingredients market is weighted as follows: flavors (29%), preservatives (24%), colorings (19%), antioxidants (13%), food acids (6%), and cloud emulsions (2%). The market is dependent on imports, due to lack of raw materials domestically and high risks of entry into business.
 

Regulatory Framework
 
In 2010, the Government of the Russian Federation (GOR) passed the “Principles of the Russian Federation State Policy in the Field of Nutrition for the Period to 2020” which is considered by many as some progress in terms of GOR support for the food processing industry including food ingredients manufacturers. The main objectives of the policy are: expansion of domestic production of basic raw materials that meet modern standards of quality and safety, the development of manufacturing food products enriched with essential components, specialized baby food, functional food products, dietary (curative and preventive) food products and dietary supplements. Also, the GOR pays attention to the development and implementation of innovative technologies in agriculture and the food industry, including biotechnology and nanotechnology, and development of healthy eating educational programs for various groups of the population. In this regard, technical regulations relating to food are expected to be adopted. It is proposed to strengthen the legal responsibility of the manufacturer for production of food products which are consistent with statutory requirements, and to improve quality control mechanism for food and raw materials produced in Russia and imported from abroad. Also, according to the document, the GOR would provide the conditions for investment in production of vitamins, enzymes for the food industry, probiotics and other food ingredients, consumer foods enriched with vitamins and minerals, as well as would prioritize development of research in the field of modern biotechnological and nanotechnological methods to obtain new sources of food and biomedical estimation of its quality and safety.
 
The main regulations for the industry will be the Customs Union’s technical regulations "Safety Requirements for Food Additives, Flavorings, and Technological Aids". The draft of these technical regulations is published on Customs Union website and the document is expected to be accepted in the coming months: http://www.tsouz.ru/db/techreglam/Pages/Pishdobavki.aspx.
 

Trade
 
The Russian food industry in general is characterized by its dependence on imports. Around 40 percent of products used by the Russian food industry are imported: $36.4 billion was spent in 2010 for importing food products and raw materials. More than a half of the meat and milk products in major Russian cities are imported. 70% of the raw materials in meat processing plants are imported.
 
According to data from the Federal Customs Service in January-August 2011, Russia’s imports of food products and agricultural raw materials totaled $25.8 billion which is 26.2% more than in the corresponding period of 2010. Compared to the same period in 2010, import volume of fresh and frozen meat increased by 9.6%, butter - by 16.8%, citrus fruits - by 19.0%, tea - 5.7%, cereals - 2.2 times, sunflower oil - 2.1 times, products and canned meat - by 44.2%, raw sugar - by 21.5% cocoa - 5.9%, products containing cocoa - by 10.2%, alcoholic and nonalcoholic beverages - by 18.8%. At the same time imports of fish declined by 18.0%, condensed milk and cream - by 38.2%, white sugar - by 8.8%, cigarettes - by 29.7%. Average contract prices for some produce and other food increased. The greatest increase in contract prices was on fresh and frozen meats (11.4%), fish (1.4 times), concentrated milk and cream (7.3%), butter (25.5%), citrus (16.2%), coffee (1.6 times), tea (5.7%), sunflower oil (45.9%), meat products and canned meat (10.8%), raw sugar ( to 36.0%), sugar (38.6%), and products containing cocoa (22.5%).

[Mustang Sally Farm]

Monday, January 09, 2012

Argentine Beef Consumption Continues To Fall

ARGENTINA - Upward pressure on prices has seen beef consumption fall to 53.8 kg per capita per annum - the lowest levels in 91 years.


Reduced availability of products, increasing population size and higher prices are to blame.

The Chamber of Meat Trade and Meat Products (CICCRA) says that the consumption of beef fell 6.7 per cent over the last year. The lowest recorded levels of meat beef consumption occurred in 1920, at 47 kg per capita.
 
On the other hand, sales of poultry and pork products have increased. This is likely due to it being more price competitive rather than changes in consumer eating habits. Beef prices have increased by 130 per cent in the last year.

President of the Poultry Processing Companies (CEPA), Roberto Domenech said that in 2011 the consumption of poultry meat increased to 40 kg per capita, a 1.5 kg increase.

CIICRA reports that the consumption of pork products increased 9.2 per cent over the last two years.
 
Butchers and traders are saying that whilst they have seen slight increases in the sales of poultry and pork, these increases do not match the drop in beef consumption.
 
Economists from the Institute of Economic Studies of Rural Argentina said that between 2009 and 2011 prices rose by 80 per cent, whilst consumption fell 14 per cent.
 
Price increases can be put down to increased global beef prices, but also a decrease in the number of animals slaughtered last year.