Buffalo Meat Challenges Rice in Export Markets02 September 2013 ANALYSIS - India has become the world’s leading exporter of buffalo meat, taking more than half of the global market, writes Chris Harris. In the 2012-2013 financial year, India exported more than 1.1 million tonnes of buffalo meat worth $3.2 million (Rs13, 725 billion). According to figures from Apeda, the Indian Agricultural and Processed Food Products Export Development Authority, exports of buffalo meat have been growing at a rate of 15 per cent over the last decade. In 2011/12 total exports were 985,991 tonnes worth $2.86 billion and the year before they were 726,287 tonnes and worth $1.89 billion. The continued growth in buffalo meat exports has been put down to the growing demand for beef meat in China and fall back in the exports of beef from Brazil because some markets have been closed to Brazilian exporters because of food safety inspection concerns and concerns over sanitary controls and disease. Analysts in India believe that the growth in buffalo meat exports, which between April and May alone this year reached $578 million, could push basmati rice as the country’s largest agrifood export product. The largest single export market for Indian buffalo meat is Viet Nam, which over the last year took 330,061.23 tonnes worth just under $1 billion. The second largest export destination is Malaysia which took 115,222.85 tonnes worth £357.25 million. Most of the exports are to Asian, Middle Eastern and CIS countries as well as Africa, although small amounts are shipped to some European Countries, including the Netherlands, Germany and the UK. Viet Nam’s share of the market is around 30 per cent and Malaysia, Egypt, Saudi Arabia and the Philippines each have between seven and 11 per cent market share. According to Apeda the large shipments of buffalo meat to Viet Nam are to meet the demand of the Chinese population. The country largest exporter of buffalo meat is Allana, shipping product to 64 countries. It exports a range of products including Fresh, frozen boneless Buffalo Halal meat, chilled boneless Buffalo meat, canned corned meat and a full range of fresh quick frozen offals. The company is also India’s largest exporter of coffee.

Brazilian Pork Prices Weakened in August
06 September 2013

BRAZIL - Concerning the swine sector, the upward trend observed for hog and pork prices weakened in late August in most regions surveyed by Cepea. In some areas, quotes registered small decreases.

The supply of slaughter-ready animals, which was low, increased slightly compared to the demand. On the other hand, in the Southern Brazil, prices kept the upward trend, favored by the good exports performance.

Cattle

Cattlemen expenses regarding calves purchases resumed increasing this year, accumulating a 9.4 per cent increase from January to July. This number accounts for a “Brazilian average”, calculated by Cepea based on prices practiced on typical farms in ten states (Goiás, Minas Gerais, Mato Grosso do Sul, Mato Grosso, Pará, Paraná, Roraima, Rio Grande do Sul, São Paulo and Tocantins).

In the same period of 2012 (January to July), costs with animal purchases dropped 1.5 per cent, and for the entire 2012, the decrease was 2.25 per cent.

In 2013, the increase of expenses with calves is attributed mainly to higher prices of calves. The ESALQ/BM&FBovespa calf price Index (Mato Grosso do Sul State; nelore, 8 to 12 months age) has upped 15 per cent this year, to close at 804.18 reais (337.47 dollars) on August 30. In the same period of 2012, quotes dropped five per cent.

In August, the Index has registered a monthly average of 800.94 reais, 12.3 per cent more than in the same period of last year and the second highest of Cepea series, in nominal terms, started in February 2000 – after that registered in July/13 (804.25 reais). In real terms (IGP-DI July/13), the record for calf quotes were verified in July 2008, of 961.41 reais.

In general terms, expenses with calves and lean cattle purchases are the item that cost more in the cattle finishing, not only in Brazil, but also in other beef producing countries.

As for the fed cattle market in late August, prices from calves to beef were firm in the Brazilian market. In general, the supply was below the demand, underpinning quotes.

Poultry

As for the poultry market, broiler price rises have been leading to the narrowing of price gap between broiler and beef. In August, the average price of 3.15 reais per kilo for the chilled broiler was 50 per cent smaller than beef carcass quotes (6.27 reais per kilo), both in the wholesale market of the Greater São Paulo.

In July, broiler prices were 54 per cent cheaper than beef, also in the wholesale market of the Greater São Paulo.

Shuanghui to Buy Back Smithfield Investment Notes30 September 2013 US - Following the completion of the takeover of Smithfield Foods by the Chinese processor Shuanghui last week, the company has told investors in senior notes in Smithfield that they can call on the new company to buy them back. Smithfield said that holders of its 7.750 per cent senior notes due 2017 can call on the company to buy them back at 101 per cent. The completion of the takeover now means that the combined company will have greater access to a large and growing Chinese market while at the same time retaining its food safety and quality control standards. Shuanghui International Chairman Wan Long said: "Today marks an exciting new chapter for both of our proud organizations as we formally begin a partnership that will benefit our customers, employees, producers and partners. "Together we look forward to utilizing our individual strengths, including Shuanghui's extensive distribution network in China and Smithfield's leading production and safety protocols, to provide safe, high-quality products to consumers worldwide." Smithfield Chief Executive Officer and President C. Larry Pope added: "Our partnership ensures the stability of our business for all our stakeholders, particularly our employees and the communities we serve, while simultaneously unlocking exciting opportunities for growth in the large and rapidly growing Chinese pork market. “This is a new era for Smithfield, but one that will continue to be defined by the strictest adherence to the highest standards of food safety and quality, an unwavering commitment to giving back to our communities and acting as a responsible global corporate citizen." However, the future of some of Smithfield’s foreign subsidiaries was also thrown into doubt as the deal went through. In Spain, Smithfield held a 37 per cent stake in the processor Campofrio, which also has processing interests in France, Italy, Switzerland, Germany, Portugal and the Netherlands. This stake was transferred to Shaunghui in the takeover and the Chinese company could be forced by Spanish law to make a bid for the whole company unless it reduces its stake. In the takeover deal, each Smithfield shareholder will receive $34 per share in cash for each share of Smithfield common stock that they own. Smithfield will be a wholly-owned subsidiary of Shuanghui International Holdings Limited, operating as Smithfield Foods and under its existing brand names. Shares of Smithfield's common stock are no longer listed on the New York Stock Exchange.

Hog Carcase Prices Fall15 October 2013 Ron Plain US - The USDA stopped issuing market reports on 1 October following the federal funding breakdown and as a result, there is little data available on current livestock prices, meat prices, weights or slaughter, write Ron Plain and Scott Brown.The only hog price data available is for the few hogs that move through the traditional auction markets. Peoria had a live price top this morning of $59/cwt, down $3 for the week. Zumbrota, MN was $2 higher than last Friday with a top at $62/cwt. Missouri country markets were 75 cents lower with a top at $63.75/cwt of live weight. On average, carcass prices for hogs decline by $1.68/cwt per week during October. This week doesn't appear to have been far from average. Trade estimates put this week's hog slaughter close to 2.29 million head. That is up 3 per cent from the week before, but down 4 per cent from a year ago. On average during October, hog slaughter increases by about 9,000 head per week and dressed weight increase by 0.6 pounds per week. Testing data from the National Animal Health Laboratory Network says that as of 29 September, the Porcine Epidemic Diarrhea virus (PEDv) has been found in 724 swine premises in 17 states. This is an increase of 40 locations from the week before. There is an unknown amount of double counting in this data. The CME has announced that absent USDA hog price data, they will calculate the final settlement price of the October lean hog futures contract based on the weighted average of trades on 11 and 14 October. The October lean hog futures contract settled at $90.75/cwt today, down $1.10 from the previous Friday. December hog futures ended the week at $86.50/cwt, down $1.12 from the week before. February hogs settled at $88.90. April close at $89.85/cwt. The December corn futures contract ended the week at $4.33/bushel, down 10 cents for the week. February corn settled at $4.46/bushel also down 10 cents from the previous Friday. May corn futures ended the week at $4.545/bushel. The October soybean meal contract ended the week at $422.00 per ton, down $9.30 from the previous Friday. December meal settled at $403.40, down $15.00 for the week. March meal settled at $394.20 per ton.

Farmgate Prices Remain Strong
21 October 2013

UK - The volume of cattle handled by Scottish price reporting abattoirs is currently around 10 per cent higher than a month ago, according to Stuart Ashworth, Quality Meat Scotland, Head of Economics Services.

In England and Wales, cattle volumes have steadied over the past couple of weeks after increasing by around 3,000 head per week, around 20 per cent, since the beginning of August.

Similarly prime lamb availability has increased and auction sales of prime lambs are currently around 7 per cent higher than a month ago in Scotland and 20 per cent higher in England and Wales.

"Increased volumes often result in some market price correction," said Mr Ashworth. "It is therefore not surprising that prime cattle prices have steadied over the past few weeks as the market has become slightly better supplied.

"Nevertheless, producer prices remain 12-15 per cent higher than last year with cattle availability still struggling to match last year’s levels.

"In contrast, prime lamb prices have edged higher despite the number of lambs on the market rising and being higher than this time last year. Prices now stand just short of 10 per cent higher than this time last year.

"Pig producers have also gained from the general strength of the red meat market with prices also some 10 per cent higher than 12 months ago."

However, while producers are benefiting from higher farmgate prices, consumers continue to get exceptional value for money, although they may not see it that way.

"Latest figures from the Office of National Statistics show that consumers are paying 8.8 per cent more than last year for beef, 8.2 per cent more for UK lamb, and 3.3 per cent more for pork," commented Mr Ashworth.

"When compared to the 10-15 per cent increases paid for livestock by processors and butchers, these more modest increases at retail level are exceptional value for money and illustrate the squeeze being felt in the supply chain beyond the farm gate."

These increases in retail meat prices are however considerably higher than the many measures of general consumer price inflation.

"The Consumer Price Index is only 2.7 per cent higher than 12 months ago and the RPI, which is used to set the increase in state pension for next year, is 2.5 per cent higher," said Mr Ashworth.

"Consequently consumers will once again be seeing meat retail prices as ‘high’ when trying to manage their weekly budgets."

Nevertheless, although consumers may be wary, the supply prospects continue to favour producers with provisional UK census results recording a decline of at least 1 per cent in the UK lamb crop and 3 per cent fewer cattle under one year old on farms in June this year.

"Census results from Ireland similarly show a decline in cattle and sheep numbers, with the number of cattle under one year old down 3 per cent and prime lamb numbers almost 3 per cent lower than last year," said Mr Ashworth.

"However, what both the UK and Irish census show is potential for a short-term increase in cattle supplies with the number of one to two year old cattle on farms in June, 2 per cent higher than last year in the UK and 9 per cent higher in the Republic of Ireland."

USDA Meat Data a Mixed Bag for Livestock Futures
01 November 2013

Jim Wyckoff Commentary


ANALYSIS - USDA's Cold Storage report Thursday afternoon is deemed neutral for lean hog futures and bearish for cattle futures.

USDA's Cold Storage report Thursday afternoon is deemed bearish for cattle futures and neutral for lean hog futures.

Frozen beef stocks at the end of September were 445.047 million pounds, which is around 13 million pounds higher than traders expected. End-September frozen pork stocks were at 566.367 million pounds, which is slightly above the average trade guess.

However, total U.S. pork stocks were 10% lower than year-ago levels at the end of September.

Meanwhile, USDA Cattle-on-Feed report is being called mildly bullish for cattle futures markets.

The report, which was delayed from earlier this month, showed cattle on feed at 92% of levels seen one year ago, which is slightly below trade expectations. Cattle marketings, at 106% of year-ago levels was also were deemed positive. Placement of cattle on feed were slightly above trade expectations, at 101% of year-ago.

While the latest cattle-on-feed report is likely to support live cattle futures Friday, focus is on the U.S. cash cattle market, which has traded at record-high levels the past couple weeks.

 

Change of Culture for Brazilian Processor BRF
08 November 2013


ANALYSIS - Brazilian meat and food processing company BRF has given assurances that its primary pig and poultry operations are to remain in the company, following the sale of its beef fattening and slaughtering sector to fellow Brazilian processor, Minerva, writes Chris Harris.

Speaking at a special conference in London to present the new strategy for the company and the third quarter results, CEO Claudio Galeazzi said that because of some of the markets that the company supplied it would be impractical to have third party suppliers for raw materials in the pig and poultry sectors.

He said that it would be essential for the company to have hands on control of the sanitary protocols and requirements and genetics.

“In the halal market for instance, you have to have upstream sanitary requirements and you cannot have a third party supply (of poultry),” Mr Galeazzi said.

“Poultry and pork will remain upstream.”

He added: “The Muslim countries have to have very, very strong sanitary arrangements in slaughtering and production.”

The slaughtering and deboning operations owned by BRF in the plants of Várzea Grande and Mirassol D‘Oeste, both located in the state of Mato Grosso, with a combined slaughtering capacity of 2,600 head a day and net revenue estimated at R$1.2 billion in 2012 were acquired by Minerva earlier this month.

In the deal, BRF took a 15.2 per cent share in Minerva and two seats on the board of the company.

There was also a supply agreement between the two companies, which will mean BRF will maintain its further processing capacity in beef products.

“We are focussing where we have value maximisation,” Mr Galeazzi said.

He added that the focus of the company was on areas of expertise and the beef segment was one area where their expertise was not strong.

The deal with Minerva is also expected to liberate working capital of about R$170 million within 10 months.

The company is also reviewing the dairy side of the business and Mr Galeazzi indicated that there had been some interest from some “very, very large companies worldwide”. However, he added that this is “just speculative as yet”.

Mr Galeazzi said BRF is undergoing a change in culture and strategy. Part of the change in the company is the appointment of a CEO for Brazil and the appointment of an international CEO, who is expected to be announced shortly.

Where the company had an industrial focus in the past, concentrating on manufacturing product and pushing it on to the market, not the focus was to be more on the core businesses and on the final clients and customers.

“We are changing from an industrial mind-set that pushes products to a market driven mind-set,” he said.

He said that in the past pushing product on to the export markets in particular had meant that there had been over capacity and price reductions.

And the company will be looking for inventory reductions in foreign markets that will give an adequacy of volumes to reduce exposure to commodities. In all BRF intends to reduce the volume of products to the export markets by 220,000 tonnes.

By focusing on the customer requirements, BRF intends to achieve a more solid customer base.

The company is particularly investing both effort and money in the Middle East, North Africa and SE Asian markets.

A $120 million processing plant in the Middle East is planned to be opened in June next year.

However, growth in the Middle East will be focused on specific regions.

In South America the company is to consolidate and restructure its facilities in Argentina and the rest of South America and it is looking to develop it “in-natura” products in Brazil.

BRF is looking to become a less labour intensive company and has axed 11 per cent of the back room staff and 164 lower and middle management posts – about 20 per cent of this level of management.

The company will be reducing capital expenditure in certain areas and redirecting money towards automation, modernisation, IT and logistics.

The company will be increasing expenditure on marketing and merchandising by R$200 million, which Mr Galeazzi said had been one of the first areas for cuts in the past.

The company is also consolidating the domestic sales team to avoid duplication of coverage and to expand out into areas that had previously been covered only by wholesalers to give a more personal service.

Mr Galeazzi said that BRF will continue to develop and look for acquisitions, but he warned that he was against large cash consuming investments.

Speaking on the company’s latest results and the outlook, CFO Leopoldo Saboya said that the figures had been affected by the requirement by the competition authority CADE to sell several product lines following the merger of Sadia and Perdiagao together with the economic volatility within Brazil and the price of soy and corn on the open market.

He added that there had also been considerable volatility on the export markets, with the Middle East in particular, one of BRF’s core areas, seeing a three per cent drop in prices in dollar terms.

This meant that a region that had been contributing to expansion had suddenly seen a drop in prices.

On the domestic market the weakness of the Brazilian economy, rent costs, poor employment and food inflation had all affected the food service market although he was expecting a change I n the market for the fourth quarter of the year in the run up to Christmas.



Chris Harris, Editor-in-Chief

China's Sheep Demand Begins to Take Off14 November 2013 CHINA - During September China imported 24,200 tonnes of sheep meat a rise of 158 per cent year on year. This was driven by increased imports from the three suppliers of New Zealand, Australia and Uruguay. This latest month takes the total volume of Chinese imports in the first nine months of 2013 to 191,000 tonnes, a rise of 116 per cent year on year. New Zealand continues to be the largest supplier, accounting for 59 per cent of imports. However, with volumes only 104 per cent higher year on year, the other suppliers have gained some market share. Volumes from Australia were 125 per cent higher year on year and accounted for 38 per cent of Chinese imports. Uruguay continues to be the only other official supplier of sheep meat to mainland China, with volumes up nearly 400 per cent on year earlier levels, accounting for three per cent of total Chinese imports. This considerable rise in volumes consolidates China’s position as the world largest import market for sheep meat in volume and total value terms. The average value of these imports has also been higher as the market evolves to take higher value cuts, with unit values up three per cent year on year (in local currency). This increase being at a time when the vast majority of world markets have recorded falling average unit values due to weaker pricing globally. While the market is evolving the average unit does remain well below the more established markets such as the EU and North America. However, the rise in prices and better cuts is an encouraging sign that China will start to compete more and more with these markets.

New Zealand Sees Exports to China Grow15 November 2013 NEW ZEALAND – New Zealand has seen exports of beef and lamb to China grow rapidly over the last year from less than one per cent of total volume in 2010–11, to 10 per cent in 2012–13.However, a new report from Beef + Lamb New Zealand shows that traditional markets remain the dominant source of revenue for New Zealand sheep and beef farmers. The significant growth to China reflects: its growing strategic importance to the New Zealand red meat sector the importance of high quality access to the market, such as that provided by New Zealand’s free trade agreement the risks posed by disruptions to the trade, as experienced in 2013 The EU and US remain New Zealand’s largest meat markets overall, with the EU accounting for 40 per cent of lamb exports and the US accounting for 48 per cent of beef exports. Sheep Meat In 2012–13, China became New Zealand’s largest single lamb market and largest single mutton market – and, therefore, the largest single sheep meat market – importing 131,000 tonnes, compared with 74,000 tonnes into Great Britain.China accounted for 28 per cent of lamb exports, 52 per cent of mutton exports and 33 per of sheep meat (lamb and mutton).Though increasing, the average value of lamb exports to China trails well behind returns achieved from EU markets. The average value received from China was NZ$4,800 FOB per tonne, compared with NZ$9,000 per tonne from the EU and NZ$11,500 from the US.This reflects the product mix exported to the different countries. Exports to developed markets include a higher proportion of cuts that are case ready. Cuts exported to China will generally be further processed before being consumed. Lamb In 2012–13, total New Zealand lamb exports increased by 18 per cent to 313,000 tonnes shipped weight, influenced by an earlier processing and exporting pattern than in 2011–12.The increase in volume was offset by a 16 per cent decrease in average value, resulting in total value of lamb exports falling marginally – 0.9 per cent – to NZ$2.3b FOB.The EU remained New Zealand’s largest market region by volume, accounting for 40 per cent of exports.North Asia, the next largest market region, accounted for 32 per cent of exports, up sharply from 24 per cent in the previous year and 17 per cent in 2009–10.All but a tiny proportion of New Zealand’s lamb exports are processed beyond carcass form: 98 per cent of total New Zealand lamb exports were in bone–in or boneless cut form, with just 2 per cent exported as carcasses 99 per cent of chilled lamb exports were bone–in or boneless cut Chilled lamb exports of 72,500 tonnes shipped weight remain just under 25 per cent of New Zealand’s total lamb exports, with the majority of chilled lamb (more than 70 per cent) being exported to the EU.The average value of chilled lamb fell 22 per cent to NZ$10,340 FOB per tonne, compared with a 19 per cent decrease in the average value of frozen lamb exports – to NZ$8,030 per tonne. Mutton A majority of New Zealand’s mutton exports now goes to China. In 2012–13, 52 per cent of New Zealand’s mutton exports were to China, with the next largest market being the UK, at 8 per cent. Beef and Veal While beef and veal exports to China have grown rapidly, the US remains New Zealand’s largest beef and veal market by a significant margin. Beef and veal exports to the US accounted for 48 per cent of total beef and veal exports in 2012–13. The average return received from China and the US for beef and veal was similar, at about NZ$5300 FOB per tonne.In 2012–13, total exports of beef and veal increased 4.6 per cent to 367,000 tonnes shipped weight, as a result of increased production from cull dairy cows carried over into the 2012–13 season and the impact of drought conditions.The total value of beef and veal exports increased two per cent to NZ$2.1b FOB.Overall, receipts for beef and veal exports averaged NZ$5800 FOB per tonne, down 2.4 per cent on 2011–12 and reflecting the impact of the relatively strong New Zealand dollar.North America accounted for 52 per cent of beef export volume and 48 per cent of export value – the same levels as in 2011–12. Shipments to North America are dominated by beef used in further processing.Exports to the US increased 11 per cent to 175,000 tonnes worth NZ$933b FOB.Exports to Canada dropped sharply – by 27 per cent.North Asia, the next largest market accounted for 31 per cent of both volume and value for 2012–13, up from 26 per cent a year earlier. Within this, China and Hong Kong combined accounted for 11 per cent in 2012–13, after representing just four per cent of New Zealand beef and veal exports in 2011–12 and around 1 per cent in prior seasons.Exports to China increased nearly six–fold, from around 6300 tonnes in 2011–12 to more than 36,000 tonnes in 2012–13. The average value of exports to China increased 15 per cent to the same level as received from the US. Analysis of Exports to TPP and Non-TPP Countries As New Zealand and its partner countries continue negotiations of the Trans–Pacific Partnership Agreement, it is interesting to consider the importance of these markets to New Zealand. Exports of total lamb, mutton and beef and veal to countries that are TPP members make up: 37 per cent of total volume and 35 per cent of FOB value 61 per cent of beef and veal volume (i.e. three out of every five kilograms of beef exported goes to a TPP country, dominated by the US) 13 per cent of lamb and 13 per cent of combined lamb and mutton by volume, while 16 per cent by value Total exports of lamb, mutton and beef and veal to non-TPP countries accounted for 19 per cent of lamb value, 46 per cent of mutton value, 23 per cent of sheep meat value, and 9 per cent of beef and veal value.This trade is dominated by China, which accounted for: 28 per cent of lamb volume 52 per cent of mutton volume 33 per cent of sheep meat 9 per cent of beef and veal volume so far

US Pork Exports Down Slightly
19 November 2013
 

US - Paced by sustained strong performances by the Japan and Hong Kong markets and a rebound in Mexico, US beef exports in September remained ahead of 2012 levels. US pork exports continue to face a number of challenges including access restrictions in Russia and a lingering downturn in the Japan market, according to statistics released by the USDA and compiled by the US Meat Export Federation (USMEF).

Powered by a 37 per cent jump in the volume of beef exports to Japan, 65 per cent to Mexico and 102 per cent to Hong Kong, US beef exports rose nearly 5 per cent in September and are up 1 per cent for the year. The value of those exports – up nearly 16 per cent to Japan, 56 per cent to Mexico, 182 per cent to Hong Kong and more than 41 per cent to South Korea – drove the value of US beef exports up 14 per cent for the month and they remain 10 per cent ahead of the 2012 pace that set a record of $5.51 billion.

US pork exports received a boost from sales to the China/Hong Kong region – up 14 per cent in volume and 24 per cent in value for the month – as well as strong sales to the ASEAN region (up 45 per cent in volume and nearly 47 per cent in value), but continued access restrictions to Russia and a very competitive market in Japan continued to keep pork exports down 5 per cent in value and more than 9 per cent in volume for the month and 5 per cent in both categories for the year.

“On the beef side, the industry aggressively pursued the opportunities available for US product when market access was expanded in Japan and Hong Kong, and we are seeing exciting growth in both those markets,” said Philip Seng, USMEF president and CEO. “On the pork side, we are continuing to face challenges from strong competition in Japan that is driving down our market share, and access issues with Russia continue to hamper our industry, both in pork and beef.”

In fact, the decline in pork exports to just Japan and Russia amount to nearly all of the drop-off in pork export volume this year (81,874 metric tons of a total 85,705 metric ton decline) and more than the total dip in export value ($246.7 million decline from the two markets versus $213 million overall).

For the month of September, the United States exported 94,698 metric tons of beef valued at $505.5 million, accounting for 13 per cent of total beef production and 11 per cent of muscle cuts (versus 13 per cent and 10 per cent, respectively, last September). The export value per head of fed slaughter in September was $249, up from $227.65 a year ago.

Pork exports for the month totaled 166,650 metric tons valued at $478.7 million, accounting for 25 per cent of total US pork production and 21 per cent of muscle cuts (versus 26.7 per cent and 23 per cent, respectively, last September). The export value per head for the month averaged $53, down from $53.43 last year.

Top beef markets

Japan remains the top export market for US beef in 2013. Exports to Japan are up 52 per cent in volume (183,942 metric tons) and 35 per cent in value ($1.1 billion) for the year, accounting for 21.3 per cent of the total volume of US beef exports and 24.2 per cent of the value.

The No. 2 volume market for US beef, Mexico took larger volumes for four consecutive months, with September exports increasing nearly 65 per cent in volume (18,990 metric tons) and 56 per cent in value ($82 million) over year-ago levels. For the year, it is down just 1 per cent in volume (149,887 metric tons) and even in value at $641.7 million.

Canada remains a strong market for US beef, second in value and third in volume for the year at 133,776 metric tons (up 6 per cent) valued at $912.9 million (up 10 per cent).

Other key beef export markets for 2013 include:
•Hong Kong: up 96 per cent in volume (84,473 metric tons) and 137 per cent in value ($530.9 million)
•South Korea: down 19 per cent in volume (75,962 metric tons) and 2 per cent in value ($419 million)
•Middle East: down 3 per cent in volume (111,895 metric tons) and 18 per cent in value ($211.8 million) for the year, with the decline coming in the competitive Egyptian muscle cut market
•Central/South America: up 24 per cent in volume (32,549 metric tons) and 15 per cent in value ($113.7 million) led by strong growth to Peru, Chile and Colombia
•Taiwan: up 135 per cent in volume (23,404 metric tons) and 195 per cent in value ($185.7 million)

Top pork markets

Mexico remains the top volume market for US pork in 2013, with volume up 1 per cent to 446,827 metric tons valued at $849.8 million, a 4 per cent increase. Japan is the No. 1 value market at $1.4 billion, a 6 per cent decline year-over-year, while volume is down 8 per cent to 317,710 metric tons.

Boosted by a strong September, exports to China/Hong Kong were even in volume (313,379 metric tons) and up 6 per cent in value ($670.4 million).

Other key pork export markets for 2013 include:
•Canada: down 1 per cent in volume (171,091 metric tons) but up 1 per cent in value ($637.5 million)
•Central/South America: up 32 per cent in volume (79,880 metric tons) and 29 per cent in value ($199.4 million) led by strong growth to Colombia, Honduras and Chile
•South Korea: down 33 per cent in volume (70,776 metric tons) and 36 per cent in value ($194.9 million)
•ASEAN: up 44 per cent in volume (50,456 metric tons) and 39 per cent in value ($121.6 million) led by strong growth to the Philippines and Singapore

Lamb exports mixed

Lamb exports remained mixed, off 3 per cent in volume for the year (9,720 metric tons) but up 10 per cent in value ($21.5 million). For September, two of the top three markets (Mexico and Canada) declined in double digits while the Caribbean was up in double digits. During the month, total lamb exports were 764 metric tons (down over 42 per cent) valued at $1.9 million (down more than 17 per cent).

Taiwan to Lift Tariffs on Red Meat
22 November 2013


NEW ZEALAND/TAIWAN – Taiwanese red meat buying has received a further boost following entry into an economic cooperation agreement with beef and lamb provider, New Zealand.

The agreement will remove tariff barriers on beef by 2015 and sheep meat by 2017, the government announced yesterday.

Producers and processors have welcomed the announcement. Beef and Lamb New Zealand’s Chief Executive Officer, Dr Scott Champion described the news as an ‘excellent result’.

Taiwan is a considerable market for New Zealand farmers, standing third in the exports market in terms of value (NZ$ 134 million) and fourth by volume (19,647 tonnes) last year.

This is according to Bill Falconer, Chairman of the Meat Industry Alliance who said: “Taiwan is New Zealand’s largest market for primary beef cuts, with New Zealand beef being well received because of its grass-fed origin and superior nutritional benefits.”

“Demand for New Zealand sheepmeat is also strong in Taiwan,” he continued, citing Taiwan’s high proportion of mutton used for traditional dishes as one reason.

Mexican Agricultural Exports up in October
29 November 2013

MEXICO - Agricultural and fisheries exports rose 10.3 per cent in October compared to the same month last year, according to the National Institute of Statistics and Geography (INEGI).

INEGI has reported that sales of agricultural and fisheries assets totaled $837 million in October. The institute said that, based on statistics from the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), agribusiness sales rose nine per cent during January to September 2013 compared to the same period last year.

SAGARPA explained that Mexico exports food products to 170 international destinations, among which the United States, Japan, Canada, Venezuela, Guatemala, Netherlands, Germany, Spain, UK, Australia, China and Chile are more prominent.

Exports of beef (fresh and chilled) rose 2.1 per cent, live cattle rose 1.6 per cent and pork rose 1.5 per cent.

CME: Weekly Cow, Sow Slaughter Likely to Stay Light
03 December 2013
 

US - Lower feed costs and significantly improved margins have encouraged producers to reduce the number of breeding animals they send to market, write Steve Meyer and Len Steiner.

Since August, weekly cow and sow slaughter has been running significantly below year ago levels and the numbers will likely remain light for the foreseeable future. For the last four reported weeks, US weekly cow slaughter has averaged about 125,200 head, down 11 per cent from the previous year.

 



Weekly sow slaughter has averaged 59,500 head, down 4 per cent from last year. In the short term, the decline in the number of breeding animals going to slaughter will tend to reduce the supply of beef and (to a much lesser degree) pork.

For specific end users, such as those that use lean grinding beef (hamburger patty manufacturers) or sow trimmings (high quality sausage), the shift has a direct inflationary impact. Sometimes all one hears in the press is how lower feed costs will lead to lower meat prices, and eventually that may be the case. In the near term, however, prices for some beef and pork items will be higher, not lower.

Livestock producers welcome the decline in feed input costs but they have to contend with the overall decline in the number of cattle and hogs available for marketing. The quickest and least expensive way to expand production is to put more weight on animals.

Biological constraints limit the weight increases past a certain point and producers also have to contend with discounts for carcasses that have too much fat on them. Still, producers are doing their best to keep weights up and offset some of the decline from lower slaughter numbers.

Average steer weights for the week ending 16 November (latest available data) were pegged at 878 pounds per carcass, up 0.7 per cent higher than a year ago. Overall average cattle weights for the week ending 30 November were reported at 803 pounds per carcass, up about 5 pounds or 0.6 per cent from the previous year.

Hog carcass weight gains have been even more significant. The increase in hogs weighs is in part due to much cheaper and higher quality feed. Also as one of our readers correctly pointed out, some producers affected by PEDv now have more space in their barns and thus are able to grow some pigs out to heavier weights.

As we mentioned last week, the weight gains for packer owned hogs have been nothing short of astounding, with average carcass weights for packer owned hogs reported at 218 pounds on Friday. The overall average hog weights for the week (based on Mandatory Price Reporting system) were 213 pounds, up 2.8 per cent from a year ago.

Please note that this is higher than the preliminary estimate reported by USDA and included in the table below. Normally USDA will revise these numbers when all data is received and we think the 213 pound weights are closer to the reality on the ground.

With hog weights now running close to 3 per cent over a year ago and how slaughter about the same as in 2012, we are now seeing quite a bit more pork coming to market. The increase has affected some portions of the market more than others. The price of 72CL pork trimmings has declined sharply compared to October levels (-17 per cent) but still remains about 11 per cent higher than a year ago.

Other pork items, such as hams and bellies also have been pressured lower but remain above last year’s levels. In all, pork demand appears to be in good shape and has helped support overall pork pricing despite the increase in supplies.

Beef to Drive Brazilian Meat Exports in 201411 December 2013 BRAZIL – Beef sales are expected to drive a meat exports rise next year, while poultry and pork sectors are side-lined for more modest increases.The Association of Brazilian Meat Export Industries (ABIEC) has reported expectations that beef sales will beat poultry earnings, reaching $8 billion, while pork should rebound 'gradually' after a poor year. Beef income beat poultry earnings in 2000 and 2006 and, backed by predictions of an expensive dollar to the real, will increase 20 per cent on 2013, ABIEC predicts. Also important to increasing income is reopening up markets such as Saudi Arabia and China after the atypical bovine spongiform encephalopathy case late last year in the state of Parana. Further opportunities may result from diplomatic tensions between Indonesia and Australia as Indonesia looks to alternative beef providers. Similarly, exporters hope to enter the Myanmar and Thailand markets and advancing trade negotiations with the US are buoying the industry. However, poultry is expected to see more modest growth of four per cent for production, two-three per cent for shipments and three per cent for revenue. Francisco Turra, Brazilian Poultry Union President (Ubabef) revealed this would follow the current year’s figures which, for January to November, had seen chicken meat export values increase 5.2 per cent to $7.439 billion. The income rise came despite a slight fall in shipped volume up to November. Mr Turra said China will continue to review the number of Brazilian processing plants eligible to export meat to China, currently at 24. He explained that three units have been blocked, awaiting review, although should be granted entry to the Chinese market. Thirteen other plants are currently in various stages of negotiation. Elsewhere, opportunities lie in wait for Brazilian poultry. Mr Turra outlined Pakistan, Venezuela and Iran as markets targeted to account for extra production in 2014, forecast to lift four per cent. Next year’s pork exports are also positive. After a challenging year in which trade embargoes forced January to October pork shipments down ten per cent and left revenue over seven per cent lower, shipments hope to return to 600,000 tonnes in 2014. Tapping into growing Chinese demand, sales resuming with South Africa and Japanese opening doors in July, will give ‘stability’ to the Brazilian pork sector, said Rui Vargas, Brazilian Association of Producers and Exporters President. He said that, in 2013, trade was hit by three months of closed trade with Ukraine and mounting restrictions with Russia, which placed sanity controls on several exporters. This will put 2013 shipments below 2012, explained Mr Vargas. “We were expecting to reach 600,000 tonnes at the start of 2013, but this was not reached,” Mr Vargas told Economic Value. “Pork exports will be under the 581,500 tonnes shipped in 2012.” He summarised: "We expect some regularity of sales.

Estimates for US Pork Output in 2013, 2014 Revised Upwards
12 December 2013


US - The latest estimates for the US pig meat market in 2013 and 2014 are summarised by Jackie Linden.

US Production

The latest World Agricultural Supply and Demand Estimates (WASDE) report from the USDA forecasts higher production of total red meat and poultry in the US for both 2013 and 2014 at 93,285 million pounds and 93,715 million pounds, respectively.

For 2013, small changes are made to the fourth quarter of 2013 for the major species, based on slaughter data to date, taking the pig meat production estimate to 23,220 million pounds. The forecast for 2014 has been raised to 23,905 million tonnes, based on an upward revision of hog carcass weights.

Pig Meat Trade Estimates

Pork imports are raised for both 2013 and 2014, based on estimates for the third quarter and early fourth quarter and expectations for slightly stronger imports in 2014. The latest estimate for 2013 is now 876 million pounds, rising to 880 million pounds for next year.

Pork exports have been revised down to 4,974 million pounds for 2013, and to 5,180 million pounds for 2014, based on slightly weaker demand in Asia.

Pork Price Forecasts

Hog prices for 2013 have been lowered as fourth-quarter prices have been slightly weaker than expected, averaging $64.40 per cwt for the year. The forecast for 2014 is unchanged at between $59 and $63 per cwt.



Jackie Linden, Senior Editor