Hong Kong – Livestock and Products Annual
Hong Kong's imports of US pork and offals are expected be 32 per cent lower this year than in 2010 as the result of a continued decrease in US pork exports transshipping through Hong Kong, according to Caroline Yuen and Juliana Madrid in the latest GAIN report from USDA Foreign Agricultural Service.


Executive Summary
US pork exports show good prospects for growth in Hong Kong’s domestic market, greatly benefiting from the Hong Kong dollar’s peg to the US dollar (US$1= HK$7.80). Products from other major competitors have become more expensive as a result of their currency appreciating against the US, and thus, Hong Kong dollar. US pork products continue to sell favourably in high-end markets. The use of Chinese cuts has helped increase sales for US pork products used in Chinese restaurants. Nevertheless, competition remains tough in an open market like Hong Kong. Chilled pork products face increasing competition from premium pork products supplied by Spain and Japan.

Despite the favourable domestic market, Hong Kong’s 2011 imports of US pork and offals are expected to drop to $190 million, a 32 per cent decline from $278 million in 2010. The decline is due to the continued expected decrease in US pork exports transshipping through Hong Kong.

Hong Kong’s trade is very volatile due to the re-export trade. In the first half of 2011, Hong Kong imported $27 million in US pork products and $67 million in offals. During the same time period, Hong Kong’s pork and offal re-exports amounted to 28 per cent and 75 per cent of total imports, respectively. The high export percentage, particularly for offals, highlights the fact that Hong Kong remains a key re-export centre for the Chinese market.

China and Brazil are the two leading pork suppliers to Hong Kong. Currently, Hong Kong importers are very reluctant to source Chinese pork because it is considered too expensive. Brazilian products are more popular in terms of prices and supply. Recently, importers said they were given very competitive offers when Russia imposed a ban on pork imports from certain Brazilian plants.

Hong Kong is experiencing inflationary pressure. From July 2010 to July of this year, the average retail price for pork rose nearly 26 per cent. In a bid to combat inflation, price-conscious consumers are replacing freshly slaughtered pork with Chinese chilled or even frozen pork.

Production
Pig production is expected to reach 1.63 million head (114,000 metruc tons; MT) in 2011 and 1.67 million head (116,000MT) in 2012, five per cent and three per cent, respectively, lower than the 1.72 million head (120,000MT) in 2010. This decline is due to ongoing high pig prices in China, which make exports to Hong Kong less attractive. Presently, China supplies over 94 per cent of the pigs for slaughter in Hong Kong, while local farms supply the remaining six per cent. Thus, a reduced supply from China would have a significant impact on local production.

The July consumer price index report for China revealed a 14.8 per cent year-on-year rise on overall prices, with pork having risen 56.7 per cent. To some extent, these figures are telling of the stringent supply of live pigs in China. Since over 94 per cent of Hong Kong’s live pig supply comes from China, the local live pig market inevitably suffers spill-over effects from the rising prices and stringent supply of the pig industry in China.

In June of this year, Hong Kong’s average import price for live pigs rose by 38 per cent compared to June 2010, a rate less than that of China’s pork prices (56 per cent) as Hong Kong agents buying live pigs from China have been unwilling to offer higher prices. On the other hand, Chinese pig traders experiencing a bullish domestic market have little incentive to sell their pigs to Hong Kong. As such, the supply of pigs to Hong Kong has been declining and may continue to decline as the situation in China is expected to continue in 2011 and 2012.

Local pig farming began to drop significantly in 2007 following a government buy-out plan of operation licences in an effort to reduce local pig farming. Hong Kong’s self-sufficiency ratio declined from 23 per cent in 2006 to six per cent presently. Since the buy-out scheme has ended, further significant decreases in local pig production are not expected, as farmers who declined the government’s reimbursement offer are likely to remain in the industry for the immediate future. These farmers may be further encouraged by the developing niche market for locally raised pigs. Some retail outlets are encouraging this niche market by specifying where their pork comes from. In Hong Kong, there is the general perception that local pigs are less likely to be subject to unnecessary hormone treatments.

On average, live pigs from China are smaller, weighing about 68kg, whereas those raised locally weigh 86kg on average. Given the appreciation of the Renminbi, rising import prices, and Hong Kong’s inflation, the wholesale prices of live pigs between January and May 2011 reached $2,919 per MT, representing a rise of 29 per cent compared to 2010.

Consumption
Hong Kong’s pork consumption pattern has been affected by escalating inflationary pressure. Once consumers get accustomed to a new consumption pattern, it is very likely that this behaviour will continue even when inflation subsides. This July, the year-on-year inflation rate was recorded at 7.9 per cent, the highest after August 2008. Aside from housing rentals, food was the largest driving cause for inflation with a 7.4 per cent year-on-year increase. Pork was among the food items that experienced the most noticeable price increase. The average retail price of pork in July 2011 was 26 per cent higher than that in June 2010. In response to increasing prices, industry sources confirmed that both consumers and catering services have modified their pork consumption.

The most noticeable change is in the sharp shift from freshly slaughtered pork to chilled pork from China. Chinese chilled pork was introduced to Hong Kong as an alternative to freshly slaughtered pork and its sales have been expanding gradually over the years. The rising cost of food has served as a catalyst in accelerating this shifting process. In Hong Kong, there is about a 10 per cent price difference between freshly slaughtered pork and chilled pork from China. Although the overall pork prices in China are on an upward trend, chilled pork prices are not as volatile as live pig prices. The price volatility for live pigs is due to the supply of live pigs being largely confined to the Guangdong province (adjacent to Hong Kong), whereas the chilled pork supply has less of a geographical restriction.

In a bid for lower prices, a similar shifting in consumer preference is taking place between Chinese chilled meats and frozen meats. Hong Kong retail outlets have seen a sharp increase in the consumption of Brazilian frozen pork. Ribs and pork chops are popular Brazilian cuts.

Given the strong exchange rate of Renminbi and the rising pork prices in China, Brazilian products have become more competitive and attractive at the expense of Chinese chilled and frozen pork.

Hong Kong’s inflationary pressure will remain notable. To avoid the upward price pressure, the shift in consumer preferences is very likely to continue in the coming year.

One distinct advantage for US chilled pork is the stable exchange rate. Additionally, US pork products enjoy an established premium market image associated with its taste and safety. US chilled pork, primarily consumed by the well-to-do consumers and upscale catering services, continue to sell well despite high prices. However, the coming years will be challenging for US chilled pork products because many traders are gradually introducing premium chilled pork from other countries. The most noticeable is Spanish Iberico pork and Japanese Berkshire pork. Both pork types are being well received in the market. Australian and Canadian pork are also making inroads to upscale markets. Currently, Australian and Canadian pork exports are disadvantaged by the high exchange rate, but they are likely to build on the Hong Kong consumers’ receptiveness to new food products.

There has not been any significant consumer shift towards different types of meats as a result of rising pork prices, because other meat products are facing similar upward trends in price. More importantly, pork and chicken are staple meats consumed by the Hong Kong Chinese.

Trade
US supplies
US pork and offal exports to Hong Kong in 2011 are forecast at $190 million, representing a significant drop of 32 per cent. This forecast is based on increasing direct US exports of pork and offals products to China. In efforts to cut transaction costs, many US pork exporters have decreased their transshipments through Hong Kong. In the first half year of 2011, US pork and offal exports to China increased tremendously by 2,234 per cent reaching $147 million, while its exports to Hong Kong declined by 55 per cent shrinking to $67 million. As a large portion of Hong Kong’s imports are re-exported – 28 per cent and 75 per cent for pork and offals, respectively – any decline in re-exports will inevitably affect total imports significantly.

As of 2010, the US was the third largest pork supplier to Hong Kong. As a result of the increasing direct exports to China, the US is now the fifth largest supplier to Hong Kong after China, Brazil, Spain and Germany. In the first half year of 2011, Hong Kong imported a total of $27 million in pork products but the import value of offal was as high as $67 million. Both chilled pork and processed pork, primarily consumed in Hong Kong, showed a remarkable increase. On the other hand, Hong Kong’s imports of US frozen pork and variety meats declined as they are most affected by the changes in re-export trade.

Removing the re-export trade, US pork products have performed very well in the domestic market. US exports have benefited tremendously by the pegged exchange rate, particularly when the Hong Kong currency has depreciated against the currency of other major suppliers such as China and Brazil.

From January to June 2011, Hong Kong’s imports of US chilled pork rose to $2 million or 113 per cent compared to the same period in 2010. The strength of US pork is rooted in its established market image of high quality and food safety, in addition to the benefited the stable exchange rate with the Hong Kong currency. US chilled pork sell primarily to high-end retail outlets and five-star hotels.

As mentioned in the previous section, US pork is facing competition from high quality pork supplied from Spain, Australia, and Canada. Industry sources indicated that Canadian pork is also doing very well as a beginner in the market. Despite their slow acceptance in the market, industry sources believe Canadian pork has great potential. It is also worth noting that chilled pork from Thailand has enjoyed significant growth. Given the more economical pricing and comparable quality, importers view it as a good value for their money.

US frozen pork products, including premium frozen pork parts and commodity cuts, are expected to perform well for the remainder of 2011 and 2012. In addition to the high value US loin cuts which have been traditionally well accepted by the high-end catering industry, other cuts like butts are being gradually introduced to Chinese restaurants. For example, pork butts are being used to prepare traditional Chinese pork roast. Wider acceptance of US pork by Chinese restaurants offers good opportunities for US pork exports. After all, Hong Kong’s catering industry is dominated by restaurants highlighting Chinese cuisine.

Other suppliers
China is the largest supplier of pork to Hong Kong. It accounts for over 86 per cent of all chilled pork supplies to Hong Kong. Chinese chilled pork is primarily used as an alternative for freshly slaughtered pork and is not a direct competitor of US chilled pork. Despite the increasing substitution of freshly slaughtered pork for chilled pork, Chinese chilled pork is expected to decline in 2011. This decline is partly due to some consumers and catering services replacing chilled pork with frozen pork as a result of escalating pork prices from China.

Presently, there is not a significant amount of Chinese pork coming into Hong Kong because it is considered too expensive. This trend will continue for the remainder of 2011 and is likely to continue in 2012 because Chinese pork prices are not expected to drop significantly in the near future. Chinese frozen butts used to be very popular for making Chinese pork roast, but many end-users are now opting to use Brazilian products. A similar shift is happening with many other cuts. On the whole, prices are a determining factor in all purchasing decisions particularly for commodity cuts.

Brazil is the second largest supplier of pork to Hong Kong. Just in the first half of 2011 Brazil had a 26 per cent increase and sales are expected to continue to rise in the near future. There are several underlining reasons for the success of Brazilian pork. According to industry sources, as a result of the Russian ban on Brazilian pork they saw an influx of Brazilian pork products enter Hong Kong at very competitive prices. This surge in Brazilian supplies has made up for the limited supplies of Chinese pork. Furthermore, Hong Kong buyers are very familiar and comfortable with Brazilian cuts. Brazilian pork is considered to be lean and well-trimmed.

Re-exports
Hong Kong continues to serve as a centre for re-exporting products to China. Over 28 and 75 per cent, respectively, of pork and offals imports to Hong Kong were re-exported and China is the key market.

Hong Kong’s re-export trade to China is dominated by offals. The US is a key supplier of pork offals to Hong Kong. A distinct advantage of US products is their abundant supplies. When buying from a US supplier, an importer can place a large order from one US plant, whereas the importer would have to deal with several European buyers in order to source the same quantity. Therefore, importers prefer to go to US suppliers. This advantage has also allowed US offals to sell well in Hong Kong.

Nonetheless, in the near future, European pork offals exports to Hong Kong are expected to increase because the Chinese government is increasingly approving more European pork products and registering more plants. While importers noted that this trend does not necessarily reduce the demand for US offals because of the large scale of the Chinese the market, Hong Kong’s imports of US products are highly affected by direct exports to China.

Policy
Ractopamine is not an issue in Hong Kong. Hong Kong food laws do not prohibit or restrict the presence of ractopamine in meat products. As such, pork trade has not been affected by this issue.

Carolyn's Mozzarella Pressed Cheese; Rich Chocolate Goat Milk Pudding; & Goat Milk Cream Cheese






 
Carolyn's Mozzarella Pressed Cheese Recipe
By Carolyn Alley

Heat two gallons goat milk (sometimes I add a bit more—no need to be right at two) to 85°F and add rennet. I use 1/2 tablet rennet dissolved in about 2 tablespoons cold water, but I'm sure liquid rennet would work. (A whole tablet will do 5 gals.) Stir in 2 tablespoons lemon juice (I use Realemon), cover and let it set until curd forms. (Usually between 45-60 minutes.) I then break up the curd with my hands and slowly heat it up to 110°F. I don't time it per se, but I think it usually takes about 20 minutes. I stir this all the time because I don't want the curd to stick together yet. When it reaches 110°F, I hold it there, continuing to stir, for 15 min. (I like the squeakiness of that amount of time.) Then I drain it in a muslin type cheesecloth lined colander, pushing out as much whey as possible. (Reserve some of the whey as the pressed cheese will go back into that later.) It then goes into the press.
 
Since I usually make the mozzarella cheese in the evening, I let the cheese set in the press overnight. In the morning (or whenever it comes out of the press), submerge it in the reserved whey which has been heated to 185°F. I then let it set in there until it is cool. I used to take the cheese out, wash it off with cold water, dry it off and put it in a plastic bag. But, when the room temperature cheese got to refrigerator temperature, moisture would form inside the bag and I'd have to dry it all over again. I discovered that if I put the pan of whey with the cheese still in it, in the refrigerator, the cheese gets refrigerator temperature cold and after I rinse the cheese in cold water (I just put it under the cold water out of the faucet), dry it off, moisture doesn't form inside the bag. I don't age this—use it right away.
 


Rich Chocolate Goat Milk Pudding
By Shere Crossman

4 cups fresh goat milk
 1-1/3 cups honey
 1/4 cup butter
3-4 squares baking chocolate
 2 teaspoons vanilla
8 tablespoons cornstarch
 2 well-beaten farm-fresh eggs
 
Combine honey, cornstarch, and chocolate in saucepan. Gradually add goat milk and beaten egg. Cook, stirring constantly over medium heat, until thick and bubbly. Remove from heat, add butter and vanilla. Beat until creamy. Chill.
 For further enjoyment, use a graham cracker crust and layer sliced bananas with the pudding, or decorate/top with whipped cream or Cool Whip. May also top with crushed chocolate chips and almonds. This dessert can also be served frozen.
 Hint: I did try substituting the baking cocoa powder instead of the chocolate squares and it wasn't very good. Everyone here liked the baking chocolate instead!



Goat Milk Cream Cheese
By Nicci Pretti

4 cups whole goat milk
 1 cup cream
 2 tablespoons buttermilk
 Salt
 Herbs (optional)
 
Heat milk and cream to 90°F, then stir in buttermilk. Pour into mixing bowl and cover with plastic wrap. Place bowl in warm area and wrap with towels; let sit for 24 hours. After 24 hours should have consistency of yogurt and not move when bowl is moved side to side. If it does move culture needs more time to develop and let it sit another 6-12 hours. Once it's firm pour into cheesecloth lined colander with catch bowl. Allow to drain 15 minutes, then fold cloth over cheese and cover colander with plastic wrap. Place colander with catch bowl in fridge for another 12 hours. Remove from cheesecloth and salt to taste and add herbs if desired.
 
Reshape cheese into balls and wrap them with cheesecloth. Put back in colander to drain more, and cover with plastic wrap. Let sit 36-48 hours depending on the firmness desired.
 

Depth of Body Important for a Fully Functional Dairy Goat

By Shelene Costello






 
Dairy goats are ruminants and as such, need deep wide bodies with wide open ribbing and lots of room for the rumen to expand and digest large amounts of high-fiber, lower protein feeds along with plenty of water to make lots of great tasting milk. When we add they have to have enough body to carry heavy loads of developing kids for part of the year and several pounds of milk each day, it means we need a good size body for the size of the animal. We are basically looking for that deep, wide body to be what is called a dairy wedge, being wider at the hips than the withers, wider still at the barrel behind the ribs and having a level topline with a bottom line that drops from elbow to the udder giving a wedge shape to the body from top, rear and side views.
 
To get this shape the dairy doe needs to have a rib cage that is deep enough at the elbow to provide plenty of space inside for organs and deeper still as it drops back to the barrel. It needs to be narrower at the front than the rear to allow the front legs to move easily around it, yet not be so narrow as to pinch those internal organs. There should be plenty of heart girth, the depth right behind the front legs and this area should be fairly flexible to provide plenty of expansion for the lungs.
 






Dairy goats need room for the rument to expand in order to digest large amounts of fiber.

 

The front of the rib cage on a nice, deep-bodied dairy doe should extend a bit in front of the point of the shoulders. It should have enough width in the chest floor between the front legs, to give those organs room to expand and do their job, yet not so wide as to interfere with efficient comfortable movement, so they can range far and wide to forage, if needed. Each rib should be of flat bone and set wide apart, angled down and back to give as much room as possible to protect the vital organs. The beginning of the stomach system in a ruminant is in the back of the rib cage with the bulk of the rumen extending behind the ribs and set under the loin. The ribs round out and down almost in an oval shape, but are more narrow at the top where they connect to the spine and wider down below, angling back into the breast bone underneath. If the ribs are close together and more vertical, they make for a short tight body that just can't carry the sheer amount of body capacity a dairy goat needs.
 
The loin should be wide, well muscled and able to support that deep wide barrel of the body, where the rumen pokes out and where the bulk of kids reside during pregnancy. The barrel should drop down, blending smoothly into the front of the udder, leaving plenty of room for milk making tissue in the udder, without a lot of excess body tissue where they join. The body should be relatively long in proportion to height of the animal. Plenty of that length is in the rib cage, but some will be hanging under the suspension bridge called the loin and some under the rump above the udder. Too short of a body and there is no room for the rumen to expand or for kids to be carried comfortably, other than to displace the organs. Too long, and the weight will weaken the topline over time.
 
The skin is the largest organ in the body and in dairy goats it wraps the whole body in a silky supple covering. A thick skin often covers a shorter-bodied rounder animal that tends to put more of its feed into weight, rather than milk. A thin silky skin tends to go with the true dairy type body. The reason we look for fine supple skin is that while they are out browsing in thick bramble and woody browse, anything that catches, causes the skin to roll. Often the point of the thorns or the tip of the branch will slide over the skin rather than digging in, ripping and tearing looser thinner skin.
 
The dairy scorecard, by which dairy goats are compared for judging purposes, calls for short fine hair to cover that lovely skin. Less hair and a finer texture makes it easier to milk cleanly. Owners who spend time milking find that longer hair, particularly on many Swiss-type breeds, needs clipping to remove the excess hair that gets caught and pulled while milking.
 
It is typical in the U.S. for most dairy goats to be clipped for show, and also for ease and cleanliness in the milking parlor. Goats with short, fine hair naturally need less maintenance that way, saving both time and extra work.
 
I have learned to appreciate the things that make a dairy goat body functional: the deep wide bodies, the fine silky skin, and tight short coats. And I am amazed at how varied the expressions of that body type can be—in each breed. A bit more here or there and still they fit the functional ideal.
 

Wednesday, September 07, 2011
Pork Commentary: Hog Production in Tricky Position
CANADA - This week's North American Pork Commentary from Jim Long.


Jim Long is President &
CEO of Genesus Genetics.
Corn closed Friday at $7.60 up $3.00 a bushel from a year ago. That’s at least a $25.00 per head farrow to finish increase in cost of production year over year.


On Friday, soybean meal closed at $385 per ton up $100.00 per ton from a year ago. Put the corn and soymeal price increase together it’s a cost of production increase of at least $30.00 per head year over year. A big increase and one that with October Lean Hogs 85.80 Friday we expect financial losses in the coming weeks.


If there was any consideration of breeding herd expansion we believe it has come to a halt. We believe that the USA-Canada breeding herd is getting smaller every week. Cash early weans around $20.00 doesn’t work for the sow owner. This in itself is lowering the breeding herd. Throw in $7.00 plus corn and the risk to reward for any expansion is daunting.
Chicken
The chicken industry is suffering serious financial losses. Sanderson Farms, the 4th largest chicken producer lost $55.7 million last quarter. Pilgrim’s Pride the second largest producer lost $128 million last quarter. The chicken industry is reacting to this grim reality. The latest egg sets were down almost 13 million (-7 per cent) from the same week a year ago.

Throw in the announcement that Chicken Integrator Townsends Inc. is closing down the first of October due to losses and Allen Family Foods have filed for liquidation. While some chicken industry observers are speculating 8-10 companies are struggling with potential bankruptcy. Put the pile of all these stories together and you get a strong feeling the chicken industry has been hit hard and there will be less chicken in the coming weeks and months. The chicken industry run to gain market share from beef and pork is looking like it was assisted suicide.


This past week we had meetings with some Genesus South Korea customers. Their country is still recovering from the devastating Foot and Mouth disease that lead to 1/3 of their production to be destroyed. They told us the market price in South Korea is equivalent to $2.50 US liveweight a lb. ($5.50 a Kilo).

This is down from over $3.00 per lb. now that pork is being allowed in tariff free. We expect US – Canada pork exports to South Korea will stay strong until at least the summer of 2012. All feed is imported into South Korea but at $2.50 a lb. the producers with hogs are making over $300 per head. They are one happy group.


On a real personal note we are very pleased that Genesus has supplied over 60 per cent of all the breeding stock imported in South Korea from everywhere in the world since 1 June, when imports where first allowed since the Foot and Mouth break. In our meetings last week we asked our South Korea partners why do they think we have such dominance. They replied "Performance" Genesus over the past five years has shown South Korean producers, more pigs, growth and that there strong. Strong being under disease conditions less problems and strong better feet and legs. As President of Genesus the reason “performance” was gratifying. South Korea producers have lots of genetic choices as every genetic company from all over the world has been in South Korea trying to get sales.


Another Genesus customer Evergreen Colony recently was chosen as the Maple Leaf Foods – Signature Award winner for 2011. The Signature award is a weighted combination of backfat, loin depth, index, yield and sort. Evergreen was chosen based on 12 months of carcass data out of producer pool that supplied over 4.3 million market hogs to Maple Leaf Foods – Brandon in the 12 month period. Only one number one – Evergreen – a 20 year Genesus customer using Genesus Duroc sires being bred to Genesus Yorkshire Landrace. Evergreen weaned 29.5 pigs per sow in the last calendar year. Congratulations to Evergreen! Congratulations to Maple Leaf Foods. As we say Genesus – The Total Package. More Pigs, Better Pigs and more Profit for you.


A big win for US pork producers with Mexico scheduled to remove the retaliatory duty on US pork in October, because Mexico’s trucks will be allowed in the United States after a ten year dispute. Removing Duties on pork by Mexico, the United States second largest buyer of pork should be price supportive for US producers.
Summary
Feed Prices are daunting – chicken is cutting back under financial distress. The coming weeks for hog producers will be margin challenging. We expect there is breeding herd liquidation and we are setting up hog prices to meet and exceed this year prices next year.


Author: Jim Long, President & CEO, Genesus Genetics

Friday, September 09, 2011
July Pork Exports Continue to Surge
US - July was another very strong month for US beef and pork exports, according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF). Both are on pace to set new export value records in 2011 and to eclipse the $5 billion mark for the first time ever.
 

July pork exports totaled 169,547 metric tons valued at $480.06 million – an increase of 16 per cent in volume and 24 per cent in value. This pushed the 2011 total to 1.25 million metric tons valued at $3.3 billion – increases of 14 per cent and 20 per cent, respectively, over last year.

July exports equated to 28.7 per cent of production with a value of $59.35 per head, compared to 23.8 per cent and $45.95 in July 2010. For the year, pork exports equated to 27.3 per cent of production with a per head value of $53.63.

“July was another outstanding month for red meat exports, as we continued to expand the presence of US beef and pork throughout the world,” said USMEF President and CEO Philip Seng.

“This is a testament to the commitment US producers and exporters have made to the international markets. Despite market access restrictions, high tariffs and other trade barriers, the investments we are making in foreign markets are paying tremendous dividends. And this success couldn’t come at a better time, as it is adding jobs to the US economy and delivering much-needed returns to our farmers and ranchers. Those producers are dealing with high operating costs, adverse weather and many other significant challenges, and the export markets are clearly the best thing they have going in terms of profitability.”

Japan, Korea critical to steady growth in pork exports
With an impressive July performance of $157.6 million, US pork exports to Japan shot past the $1 billion mark for the seventh consecutive year. Coming off a record value year of more than $1.6 billion in 2010, exports to Japan were up 11 per cent in volume through July at 287,466 metric tons and up 14 per cent in value at just over $1.1 billion.

Exports to South Korea continued to surge as a wider range of US pork cuts continue to find success in Korea’s retail and foodservice sectors. Exports were up 144 per cent in volume through July at 136,359 metric tons and nearly tripled in value to $343.4 million.

Other highlights include:

While year-over-year exports to Mexico are down four per cent in volume and steady in value, it remains a critical market for US pork. Mexico is the leading volume destination for US pork at 300,234 metric tons so far this year and ranks second to Japan in value at $561 million. Mexico’s retaliatory duties on bone-in pork shoulders, hams and pork skins were cut in half earlier this summer with a compromise agreement on the NAFTA trucking dispute, but remain a hindrance to US exports. USMEF is hopeful that these duties will be removed entirely next month.


Exports to China through the first seven months of 2011, which were hindered in 2010 due to lingering restrictions related to A-H1N1 influenza, totaled 152,986 metric tons valued at $244.6 million. This is higher in volume and only slightly lower in value than the pace established in 2008, when pork exports to China reached an all-time high.


While widely known as a successful pork exporter, Chile also has a rapidly growing appetite for US pork. Exports to Chile in 2011 have climbed 186 per cent in volume (9,103 metric tons) and 138 per cent in value ($21.1 million) over last year. This helped exports to the Central and South America region grow by 19 per cent in volume (38,758 metric tons) and 32 per cent in value ($98.2 million) over last year.


Exports to the Oceania region so far this year increased 16 per cent in volume (45,921 metric tons) and 41 per cent in value ($146.7 million). Australia accounts for about 90 per cent of these totals, though exports to New Zealand have increased by more than 20 per cent in value to $11.6 million.

Friday, September 09, 2011
CME: High Feed Costs Equal Lower Weight?
US - One impact of higher feed costs should be lower market weights for livestock and poultry, right? Steve Meyer and Len Steiner weigh up the choices.


That expected reaction on the part of feeders is predicated on the fact that animals convert feed progressively less efficiently as they get older.

Pigs will convert well under two pounds of feed to a pound of gain at young ages but may require three or more to put on a pound of gain as they near market weights of 260-300 pounds at six months or so of age.

One way to make the economics work with higher-priced feed is to sell the animals at lower weights as long as they are not so light that their price is docked by packers.

Packers, in general, do not like light animals at all since the plant and labor costs for processing a light animal are virtually the same as those of processing a heavier critter and, since premiums for light products are usually not large, sales from the lighter animal are lower.

Look at the three major species average weight performance, though, and you wonder if anyone has actually read the economic textbooks.

Only hog weights are lower than they were one year ago.

Further, average cattle weights are lower than last year only because cows have averaged nearly 20 pounds (3.2 per cent) less since 1 July.

Steers and heifers have been one per cent heavier than last year during that period.

The biggest “non-responder,” though, has been the broiler sector where average dressed weights continue to hover around 4.2 pounds, up 2.4 per cent from 2010.

They have gradually declined since late spring but the decline appears to us to be little more than a normal seasonal reduction. Will broiler weights continue to fall as broiler companies’ losses continue to mount? We certainly hope so.

Wednesday, September 07, 2011
More Tainted Pork Seized in Manila; One Arrested
PHILIPPINES - Authorities seized 250 kilos of tainted pork loaded aboard a semi-stainless pickup in Manila’s Paco district before dawn yesterday.


City veterinary inspection teams arrested the helper of the pickup even as the driver managed to elude arrest, radio dzBB’s Manny Vargas reported.

It was the third seizure of tainted meat in one week, and the second in the last two days, GMA News reports. On Monday, 400 kilos of tainted meat aboard a pedicab were seized in Divisoria.

The pickup (CRD-791), allegedly from Pulilan town in Bulacan province, was spotted at about 1 a.m. along Paz Street in Paco, Manila.

An initial investigation showed the meat was to be taken to Paco Market.

While the driver of the pickup managed to escape, the team arrested one Richard Cruz, 18, the driver’s helper.

Authorities said they expect to make more seizures as the Christmas season draws closer, due to the expected rise in demand for meat during the season.

Meanwhile, the Bureau of Fisheries and Aquatic Resources intercepted two tons of illegally caught fish in Manila, according to a separate report on dzBB.

The report said the fish was aboard a boat that docked at Del Pan in Manila. The fish supposedly came from Palawan province but there were signs they were caught via dynamite fishing.

Monday, September 05, 2011
Authorities Seize More Tainted Pork in Manila
MANILA, PHILIPPINES - Some 400 kilos of "botcha" or "double-dead" (tainted) pork aboard a pedicab were seized in Manila's Divisoria district before dawn today.


City veterinary office operatives acting on a tip intercepted the pedicab at the corner of Dagupan and C.M. Recto Streets, radio dzBB's Paulo Santos reported.

According to GMA News, the report said some of the meat already smelled bad, while some of the meat was cut into portions to be mixed with fresh meat and sold in the market.

It quoted pedicab driver Danilo Nuque as saying he was told by a man riding in a taxi to deliver the meat to a certain "Michael" at the Divisoria Market.

Mr Nuque claimed he did not know the man aboard the taxi but he knew "Michael", the report added.

Dr Hector Dimaculangan of the city veterinary office said the "menudo-cut" was a ploy by those selling the tainted meat to slip past authorities and mix the tainted meat with fresh meat.
He said they expect more attempts by unscrupulous parties to sell such tainted meat since demand is likely to rise as the Christmas season approaches.

Friday, September 02, 2011

Philippines Govt Seizes Opportunity to Export

PHILIPPINES - Following a global warning about bird flu earlier this week, the government is planning to export poultry meat to China and Viet Nam.



The government plans to ship local chicken to China and Viet Nam after reports said a new strain of bird flu virus were affecting the poultry industries in those countries, an official said, reports Manila Standard Today.

At the opening of the Food and Drinks Asia 2011 exhibition at the World Trade Center, Agriculture Assistant Secretary, Salvador Salacup, said: "We are now 93 per cent self-sufficient in poultry production.

"We can tap China and Viet Nam as possible markets for our exportable chicken since they cannot rely on their own production anymore."

San Miguel Corp., the Philippines' leading poultry producer, has been exporting chicken yakitori to Japan for eight years. It expects a 27 per cent increase in its export output this year as Japan is yet to rebuild its food industry, which was destroyed by the tsunami in March.

The Agriculture Department says the Philippines does not import chicken from either China or Viet Nam. The Philippine government's ban on Vietnamese poultry stays.

Mr Salacup continued: "Our country remains free from the dreaded bird flu virus.

"We don't want to compromise our industry and the safety of our people by allowing the entry of bird flu-infected chicken. The Philippines is the only country in Asia where the neighbouring nations may safely import their chicken requirements."

Manila Standard Today adds that earlier, the Food and Agriculture Organization urged heightened readiness for a possible resurgence of the H5N1 influenza amid signs a mutant strain is spreading in Asia and in other territories.

Friday, September 02, 2011
500 Kilos of Tainted Pork Seized in Manila
MANILA, PHILIPPINES - Authorities acting on a tip seized some 500 kilos of tainted pork ("botcha") in Manila yesterday at midnight.


Inspection teams from the Manila veterinary office found the meat inside a cart near the railroad along Claro M. Recto Avenue, radio dzBB reported early Friday.

The pork was hidden under a layer of vegetables in what the inspection team suspected was an attempt to fool them, the report said.

According to GMA News, initial investigation showed the tainted meat was to be brought to markets in the Divisoria area, where it was to be sold at a lower price.

The report said the meat was brought to the Vitas Slaughterhouse.

A separate report on dwIZ said vendors at the Divisoria market were mum on the source of the tainted meat, which authorities said would be fed to crocodiles at the Manila Zoo.

Authorities have started stepping up their watch against tainted meat, since demand for the product is expected to rise as the Christmas season approaches.

Friday, September 02, 2011Print
Study: Composted Hog Manure for Potatoe Protection
CANADA - Researchers with the University of Manitoba will launch a study this fall to assess the value of composted hog manure in improving the yield and quality of Manitoba potato crops, Bruce Cochrane writes.





Farm-Scape is sponsored by
Manitoba Pork Council and Sask Pork

FarmScape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council
and Sask Pork. 

A three-year study being launched this month will compare the effect of composted beef cattle manure, the composted solids from liquid-solid separated hog manure and conventional fumigation in reducing the yield losses in potatoes caused by Verticillium Wilt.

Dr Mario Tenuta, a soil scientist with the University of Manitoba and Canada Research Chair in Applied Soil Ecology, explains previous work has shown the addition of composed beef cattle manure reduces the amount of Verticillium in the potato.

Dr Mario Tenuta-University of Manitoba
Verticillium Wilt is the major cause disease agent of potato early dying which a lot of potato producers in the province of Manitoba are concerned about in their potato fields believing that it robs them of yield.

We know when the compost is added the disease incidence in the field is much lower and we have these increased marketable yields.

How it does this, we're not certain.

Of course, we always think of compost as having nutrients, particularly phosphorus, in the compost so that's on our radar in terms of teasing out is it actually an increase in phosphorus nutrition and then there's also, what we're finding is that there's healthier potato plants.

Particularly, they don't die as early as untreated plants although those plants have had synthetic fertilizers added.

This extra longevity in the potato plant actually allows the late tuber bulking stage to be a bit longer and this means we get bigger tubers which relates to greater marketable yield and in cases where the larger tubers are desirable actually greater marketable yield and bonus payout to producers.

Dr Tenuta says the effectiveness of the treatments in killing Verticillium and in reducing disease and how that impacts marketable yield, size distribution of the tuber and quality parameters will be assessed.

He hopes to have the first preliminary results from the study available by next fall.

Friday, September 02, 2011Print
CME: Producers Hedge Feed Costs and Hog Prices
US - US pork producers have been, for the most part, sitting on their hands regarding expansion as they enjoyed record-high hog prices this year, write Steve Meyer and Len Steiner.


The reason, of course, has been concern over extremely high costs of production — concerns that have indeed been realized in the past week as both new-crop corn and new-crop soybean meal futures have hit contract life highs. Those increases as well as the expiration of the last of the summer Lean Hogs contracts on 12 August have put a decidedly negative tone to the outlook for pork producers for the next 12 months.

The chart below shows historic Iowa hog prices and costs of production as estimated by Iowa State University. The costs represent average Iowa farrow to finish operations and include a major adjustment to the production parameters beginning January 2010. That adjustment accounted for growing operations (basically going from a one-man business to a more modern 1200-sow farrow-to-finish organization) and changes to production efficiencies. It also put some feed cost weight on distillers dried grains with solubles (DDGS) to reflect the growing adoption of this ethanol by-product as a feed ingredient. The argument can be made that the weighting for DDGS is now too low as producers have used more and more of that product.


The chart also includes projections of costs and hog prices for the next 12 months and the picture is not pretty. Any 12-month-out projection had to get worse as this past summer progressed and record-high futures prices for June, July and August dropped out of the 12 month period and into the history portion of the chart. The prospect of a small average profit over the next 12 months, though, has turned into what appears to be substantial losses. The only profitable month on the chart is the month just completed. Returns are currently negative for every other month from now through July 2012 and the average loss over the time period is $14.60/hd.

Readers should note that yesterday’s warning that assuming hand-to-mouth cash transactions for packers lead to some potential discrepancies in estimated margins applies here as well. Many producers have done more hedging feed costs and hog prices this year than ever before. Some of that has been of their own making, some has been at the strong "urging" (and in some cases, requirement) of their lenders. Those producers likely had slightly LOWER returns than this model shows for this past summer since they would have sold fewer on the robust cash markets. But they likely have higher returns locked in for the coming year.

And we must add a warning that many very efficient hog operations achieve production efficiencies and capture economies of scale (even compared to the 1200-sow model) that put their costs $4 to $8/cwt. carcass ($8-$16/head) lower than this ISU model. So, while average Iowa farrow-to-finish operations face losses, these producers will be breaking even or, perhaps, earning small profits.

What does this mean for the breeding herd? We do ot think it is changing much. The drop in sow slaughter in July was more a function of weather than of a shift to expansion. Anecdotal evidence suggests that sow death losses spiked higher during the heat wave and producers were no doubt reticent to ship sows in those conditions when the prospect of transport losses was much higher. Sow slaughter has moved back above year-ago levels the last three weeks for which we have data (the latest being 14 August) and we suspect that the past two weeks will show further increases when they are published by USDA. Lower expected profits and $70/cwt.-plus sow prices — even $75/cwt.-plus prices last week — will get sows moving again. Does that mean the herd is contracting? We doubt it. These dimmed profit prospects are too new to be having a huge impact yet. Further, Missouri’s gilt data showed the percentage of gilts in the slaughter mix was near record low at 45.1 per cent last week. That series is pretty variable but the low number suggests that producers may be cashing in older sows and laying in new gilts at an even faster pace than in the past.

Thursday, August 25, 2011
Vision for Future of the UK Pig Industry
UK - BPEX has just produced a new health and welfare strategy with support from across the industry and launched by Chief Veterinary Officer at a press conference in London yesterday, 24 August.
 

Improved pig health and welfare could easily be worth as much as £25 million a year to the British industry.

An extra 50g weight gain per day as a result of improved health would return between £2 and £3.50 per pig – between £15 and £25 million a year.

BPEX has just produced a new health and welfare strategy with support from across the industry. It was launched by Chief Veterinary Officer, Nigel Gibbens.

20:20 Pig Health and Welfare builds on the success of the first strategy launched at the end of 2003.

One of the key elements is the Pig Health Improvement Project (PHIP). The national Stage 1 is underway and in addition there will be pilot projects with groups of producers across the country. It aims to change completely the way endemic pig diseases are managed, mitigated and controlled across the country.

This will require a radical change in the mindset of all involved – from a rather singular, self-contained approach to a far more inclusive, co-ordinated and collaborative one.

BPEX Chairman, Stewart Houston, said: "Improving the health and welfare of pigs is of paramount importance to all of those involved in the industry in England.

"It affects our cost of production, our ability to compete in a highly competitive EU market, our impact on the environment, the safety of the food we produce, our responsibility to the animals in our care, our reputation as a producer of high welfare pork, bacon, ham and other pork products and ultimately our ability to produce a secure supply of food in an increasingly volatile world.

"Despite the progress we have already made we remain behind many of our immediate competitors on key measures of efficiency. Improving pig health is key to closing this competitiveness gap," said Mr Houston.

The key elements of the strategy are:

Support pig producers in delivering their objectives for continual improvements in pig health and pig welfare
Eliminate or control significant enzootic pig diseases locally, regionally and nationally
Eliminate or control significant infections of food safety and public health concern (eg Salmonella)
Develop and promote new knowledge on the assessment of welfare outcomes
Promote the open exchange of information on the disease status for herds and regions
Promote and encourage responsible and appropriate use of antimicrobials
Maintain freedom from notifiable exotic and emerging diseases of pigs
Deliver an integrated approach to improving pig health and welfare with all stakeholders, allied support industries, retailers, foodservice and Government.
BPEX Interim Head of Research and Development, Derek Armstrong, said: "The really encouraging part is that there are a lot of organisations committed to working together to deliver a coherent vision of health and welfare."

Thursday, September 01, 2011
Shandong Issues New Pork Quality Rules
CHINA - East China's Shandong province issued new rules that require all pig abattoirs to keep records of animal's source, circulation and consumption information to guarantee its safety, according to the Shandong Provincial Commerce Department.


Under the new rules that will be implemented on 1 October, abattoirs should establish a well-functioned system to recall unsafe products.

Once plants discover any health issues, they should stop production, inform distributors, who should then recall the product and inform the public immediately.

Abattoirs caught injecting water or other unsafe materials into pork will be fined 10,000 yuan to 20,000 yuan ($1,565 to $3,130). Their products and equipment will also be confiscated. In serious cases, the related producers and sellers will be investigated for criminal acts in accordance with the law.

Friday, September 02, 2011
Spanish Hog Market – Tough Times
SPAIN - The summer is getting its end, tourists are leaving the Spanish beaches and consequently the Spanish pork market has started to decrease, writes Javier Santamartina from Sales and Services, Genesus, in Spain, Portugal and Italy.
 

This is a regular higher demand over the 22-week cycle every year. The good news is that this year, the drop in prices seems to be less dramatic for producers than previous years.

A different story to tell is the cost of production, severely affected by enormous price increasing on grains. This situation has caused great discomfort among the producers and the market is apprehensive. The margins in most of the cases have touched the break-even point or a little bit higher with a lot of producers still surfing on uncharted waters of negative margins. Spanish net pig farm income is expected to close the year with red ink on higher prices for grain. There are also others factors involved. On the other hand, finishers are happy buying 23-kg pigs at record low prices now; they have been sold under their cost of production over the last few weeks.

A study by Rabobank, a reliable source in the animal protein industry, (Note Rabobank 268) estimates how feed cost in Spain is the highest in the the EU and higher than in the US and Canada. We always watch at these studies cautiously because of diverse levels of production in Spain, but one thing is clear: grain prices in Spain have cancelled out any expected income as a result of higher pork prices. It is hard to compete in these times with other European countries that are natural competitors in this market place. It is true that other costs are lower too, such as fixed costs and labour.



Cost price comparison for pork for selected EU countries, 2009 (€/kg)
Source: Rabobank estimated based on interpig, USDA, 2010
The same study reveals a drop in pork production of 1.2 million tons in the EU, partly due to animal welfare regulations that will be completely effective in 2013. It also suggests that the adjustment will be made mainly in countries that rely on grain imports, like Spain. In the case of the Spanish pig industry, it suggests two production models: number one, large corporations filling retail chain stores; and number two, smaller independent producers working to meet the domestic demand of processed meats. This latter segment is one of the most affected in the industry due to lower demand cause by reduced family income.

Summary
We are living in tough times, just expecting some step up in pork prices. If reduction on cost of production comes first, it will be welcome as well for the fall-winter season but this scenario is unlikely. The good news is prices are falling at a moderate rate compared with other years, but unfortunately it does not help to bring some break with better profit to an industry in distress.

The future brings two big questions. Firstly, what will be the effect on the European herd as a result of the new animal welfare and environmental regulations in 2013? And second, when we will real margins return to Spain’s pig production?

Genesus Global Market Report
Prices for week of 22 August 2011
Country Domestic price
(own currency) US$
(per pound liveweight)
USA (Iowa-Minnesota) 94.52¢
US$/lb carcass 69.94¢
Canada (Ontario) 1.86
C$/kg carcass 67.82¢
Mexico (DF) 21.95
MXP/kg liveweight 79.40¢
Brazil (south region) 2.23
BRR/kg liveweight 63.52¢
Russia 95
RUB/kg liveweight $1.48
China 19.90
RMB/kg liveweight $1.41
Spain 1.22
€/kg liveweight 79.54¢