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What supermarkers don't want shoppers to know...
18/03/08. Supermarkets are masters at persuading shoppers to spend more than they need to. They do this by employing well established rules to persuade most of us to trade up — whilst at the same meeting the needs of the genuinely thrifty, or poor.
In most leading supermarkets, pork falls into six tiers: premium or super-premium, healthy, organic, standard-plus, standard and value.
‘Standard’ is the biggest range, whilst 'value' accounts for less that 10 percent. Shoppers often shun ‘value’ because they see it as too cheap.
Supermarkets don’t have so many tiers just to offer their customers the widest choice.
They have them because their economists tell them they will take the most money from most people if they offer expensive goods for those who are not price-sensitive (or who are concerned about provenance etc), and cheaper goods for those who are price sensitive and don’t care (or can’t afford to care) about provenance.
This is why ‘value’ range packaging is so awful. It wouldn't cost supermarkets any more to put their ‘value’ products in attractive packaging but that would defeat the purpose, which is to deter customers who are willing to pay more.
Imported pigmeat tends to go into ‘value’ and ‘standard’ ranges, whilst around 98 percent of premium ranges are currently dominated by British pigmeat.
Pork value by tier is as follows: standard, 65.5 percent; value, 5.5 percent, premium, 1.5 percent; health, 2.3 percent; organic, 1 percent. ‘Value’ is 75 percent cheaper than ‘standard’. ‘Premium’ meat costs 153 percent more than ‘standard’.
Even though premium products are there to entice people to spend as much money as possible, they must still deliver something to justify their extra cost.
Premium ranges are likely to grow. To cash in on this, pig producers need to identify pre-farm gate attributes which can be part of the added-value contribution. — D.S.
London-style rally outside Asda headquarters
18/03/08. NPA has received police approval for a London-style rally outside Asda's headquarters. More on this tomorrow.
A question of balance...
18/03/08. British pig farmers would have to more than double production in order to supply the national demand for loin.
Currently the national herd produces 9m pigs a year, but to meet the loin requirements of consumers — much of it in the form of bacon — it would need to produce 23m pigs.
We are also unable to meet all the demand for legs — to do that we would need to produce 19m pigs.
And because we are unable to balance the carcase on the domestic market we produce 6m pigs a year more than consumers' requirement for shoulder meat.
Other European countries have less of a carcase-balance problem because they have a lower demand for loin, mainly because they eat less bacon. Furthermore they eat more processed products, which make use of cheaper cuts.
The Danes, for instance, export much of their loin to Britain, whilst at home they make more use of shoulder meat. Most shoulder meat produced in Britain goes into sausages.
Demand for pork in Britain remains strong but last year's poor summer hit sales of premium ham, as people were less inclined to sit down to eat it for their evening meal.
Fresh meat is a hugely important line for supermarkets — on a par with alcohol. Pork is the most popular meat, with sausages accounting for 9 percent of sales, pork 12 percent and bacon 17 percent.
Tesco has 31.5 percent of the market share of meat — about the same as Asda and Sainsbury's combined.
Supermarket buyers will be shown the door
18/03/08. Processors know the pig industry is nose-diving into oblivion, industry leaders were told at last week's meeting of National Pig Association's Producer Group.
They see herds declining both in the United Kingdom and on the continent, and are beginning to take the view they have nothing to lose if they talk to supermarkets in more forthright terms than they have ever risked before.
Some processors are on the verge of telling retailers they will no longer supply them directly and in future, if they want fresh pork, they will have to buy it on the wholesale markets — with no assurance and no traceability.
The price for pigs on the continent is rising, and will continue to rise. "If we see it going forward, then perhaps we can soon start to move forward again," said producer Charlie Allen.
Benn supports pig industry campaign
17/03/08. Defra chief Hilary Benn has voiced his express support for the British pig industry.
"The pig sector is having a very difficult time because of the rise in feed prices. I support the campaign that the industry is running to encourage consumers," he said, in reply to a question by Conservative MP Henry Bellingham.
"In the end, consumers are the solution to the problem: to be aware of the problems that face the pig industry in Britain; to choose to buy bacon and pork from Britain; and to have the information that enables consumers to exercise that choice.
"That is where the solution lies to the problems that his constituents face, and I am sure that the whole House would want to support them in their endeavours."
In his question, Henry Bellingham (North-West Norfolk) said: "Is the Secretary of State not aware that, by this time next year, there will be no pig farmers left in this country, because the pig sector is in crisis?
"It is wretched news for arable and rural Britain. It is very bad news for Norfolk, where many pig units are folding every day. They do not want subsidies; they want fairness in Europe.
"Is he aware that 70 percent of imported pigmeat is produced in conditions that would be illegal in this country? What can he do to ensure that consumers in this country are properly informed?"
United States producers looking at big losses
17/03/08. United States producers had hoped the weak dollar and increased demand from China would offset their pig surplus, but it is not to be. They are now looking at their worst year since 1998, with losses on farrow-to-finish farms rising to over £13 a pig.
In the last quarter of 2007, pork supplies were up 10 percent and this over-supply has continued into this year, with production up 11 percent so far.
"The poor outlook will not change until we get a reduction in pork production in the United States," said Purdue University agricultural economist Chris Hurt.
If high corn and soybean meal costs hold where futures suggest they could push production costs up to around the equivalent of £1.50 a kilo. Production costs for farrow-to-finish units so far this year are around 30 percent higher than the price being received for the pigs.
Smithfield has already announced a reduction of 40,000-50,000 sows and the Canadian government will subsidise sow culling through a national buyout program.
That said, some Canadian pig producers hope the deep slump in their industry has bottomed out. "I think the industry is poised for a significant rebound. . . low prices and low supply will fix low prices,” said Curtiss Littlejohn, chairman of Ontario Pork. Currently Canadian producers are losing up to £25 on every pig they sell.
Producer levy to be cut
16/03/08. The producer levy will be reduced by 10p from April - assuming Defra will sign-off the reduction. Producers will pay 75p instead of the current 85p.
BPEX has built up healthy reserves over the years and had wanted to return these to producers by way of a levy holiday, which would have cut producers' bottom line losses by ten percent at a stroke.
Returning the money via a levy holiday would have been the surest way of ensuring the new Agriculture and Horticulture Development Board did not absorb it.
However, the move was blocked by MLC commissioners because the law doesn't allow England to take unilateral levy decisions.
From April 1 the new levy board arrangements come into force and the Scottish and English levy arrangements will be entirely separate.
The 10p reduction planned by the current BPEX board is due to be implemented by the new BPEX Limited when it takes over on April 1.
Another mechanism being used to return reserves to producers will be a pioneering PCV2 vaccine voucher scheme (as announced in February Pig World), which will be introduced April 1. Full details will be available in April Pig World (published April 2).
A minority of producer members on BPEX had wanted a 25p levy cut - rather than a 10p cut - instead of the PCV2 voucher scheme, arguing producers could still use the saved cash to buy PCV2 vaccine if they wished.
Zero-tolerance world
16/03/08. C. Larry Pope looked out from the podium on more than 100 hog farmers and delivered a grim assessment of the industry's risks: recalls, biosecurity hazards, animal-welfare scandals stirred up by undercover spies, and regulators pressured to crack down. "We're in a zero-tolerance world, and it scares me," Pope, chief executive of Smithfield Foods Inc., said at the National Pork Industry Forum this month in St. Louis. Later, he cautioned: "We have to be aware of what people think of us outside." — From STL Today.
Largest pig production hub in China
16/03/08. A five-year pig raising project involving 1.36 billion United States dollars in investment will make the central China province of Hubei the nation's largest pig raising base. In the next five years, China National Cereals, Oils and Foodstuffs Corporation will build a sow breeding base, a pig production demonstration project and centres for pig breeding technology research and pig disease prevention.
Poland to seek more help from Brussels
14/03/08. At the Brussels Agriculture Council meeting next Monday, Poland will call for longer periods of private storage and higher export refunds to deal with the crisis in the pigmeat sector.
Tired of being the fall guys
14/03/08. Media campaigns about high prices are adversely affecting French farmers, who are struggling to keep their heads above water, according to the French Meat Industry Association. Retail prices for meat have risen steadily in the last year – pork by 5.9 percent and beef by 4.1 percent. The meat industry has been accused of increasing prices of meat products above reasonable limits, an accusation that French farmers condemn as as "stigmatisation".
This is what makes us tick...
14/03/08. A one-day course organised by BPEX will seek to give representatives from organisations such as Defra, the Environment Agency and the Rural Payments Agency, a grounding in the British pig industry.
To be held at Writtle on April 16 it will cover general pig production systems, financial aspects of producing pigs, regulatory requirements, biosecurity, current challenges faced by the industry and the proactive measures the industry is taking to help itself become more efficient at producing quality pork.
Scottish pork promoted on cabs
14/03/08. Quality Meat Scotland is promoting Scottish pork on Edinburgh taxis. Its campaign encourages consumers to put 'Specially Selected Pork' on their forks. Sales of pork in Scotland have increased ten percent over the past year.
As well as advertising on taxis, the Quality Meat Scotland campaign will include a return to radio commercials featuring actress Michelle Gomez.
The advertising campaign is being backed by a tour of Asda, Sainsbury and Tesco stores by 'Specially Selected Pork' brand ambassadors, handing out tips and recipes for midweek dinners.
Materials are also available to independent retailers. The aim is to reach more than 1.5m Scottish consumers during the campaign – all of whom will be targeted by messages on multiple occasions.
English pig herd drops
13/03/08. The English pig herd dropped in slightly last year, according to the December census — but not by much, because the foot and mouth outbreak hit the industry shortly after the full impact of higher feed prices started to be felt, preventing producers from selling their sows at a price that would allow them to quit the industry with a clean pair of heels. However, the June 2008 census figures will show a significantly different picture as gilts being kept for breeding have fallen nearly 20 percent, according to the December 2007 census.
| (000) | Dec 2006 | June 07 | Dec 07 | Dec 07 / Dec 06 +/- |
| Total pigs | 3,838 | 3,943 | 3,779 | -1.5% |
| Breeding pigs | 446 | 445 | 432 | -3.1% |
| Boars being used for service | 15 | 16 | 19 | 24.3% |
| Gilts 50kg and over not yet in pig but expected to be used for breeding | 67 | 54 | 54 | -19.2% |
| Breeding herd total | 364 | 375 | 360 | -1.3% |
| Sows in pig | 251 | 262 | 256 | 2.0% |
| Gilts in pig | 52 | 48 | 46 | -12.0% |
| Other sows (either being suckled, or dry sows being kept for further breeding) | 61 | 65 | 58 | -5.4% |
| Barren sows for fattening | 4 | 3 | 7 | 64.5% |
| Other pigs | 3,387 | 3,496 | 3,340 | -1.4% |
| Liveweight: 110kg & over | 32 | 36 | 30 | -6.8% |
| Liveweight: 80kg and under 110kg | 551 | 589 | 559 | 1.4% |
| Liveweight: 50kg and under 80kg | 887 | 899 | 826 | -6.9% |
| Liveweight: 20kg and under 50kg | 986 | 977 | 941 | -4.5% |
| Liveweight: under 20kg | 932 | 995 | 984 | 5.6% |
BPEX says the fact that the December census shows no decline in the national pig herd comes as no surprise — because there was no market for cull sows last autumn due to foot and mouth, so a huge backlog built up. The market only re-started at the tail end of 2007.
However, the latest figures show weekly sow cullings are running at something like 45 percent above the level of this time last year which is indicative of a reduction in the national breeding herd.
"The average increase in United Kingdom culling of 1,700 a week this year equals 36,000 pigs over a typical 21 week cycle. If this rate of culling were to continue for six months that would mean almost a million fewer finished pigs on the market which in turn would mean much less home-produced pork and pork products on supermarket shelves," said BPEX chief executive Mick Sloyan.
"The only way of reversing this trend is for producers to be paid a fair return for their pigs. They are at present getting about 113p a kilo when they need something like 140p a kilo.
"Retail prices did go up towards the end of last year but not enough and little if any of that increase has flowed down the supply chain to the producer."
Macdonalds Hotels moves to 100 percent Quality Standard Mark
13/03/08. Pork, bacon, sausages and ham served in Macdonald Hotels' 21 hotels nationwide will in future all be British, and Macdonalds will carry the Quality Standard Mark on menus and in publicity material. "The company wants to support the British Pigs Are Worth It campaign," said Tony Goodger of BPEX. " And by carrying the Quality Standard Mark on menus it is also positioning itself further upmarket than its competitors."
Asda will move on price
13/03/08. Asda said this afternoon it will add another 2p a kilo to the price it pays. No further details are available yet.
EBLEX chief executive to go13/03/08. Richard Ali steps down as chief executive of the English Beef and Lamb Executive at the end of this month.
Battening down the hatches
13/03/08. Denmark's pig farmers - who receive even less for their pigs than their British counterparts - have battened down the hatches according to one equipment supplier. "They have simply stopped spending," the company told Pig World.
New combinable crops board chairman elected
13/03/08. Former pig farmer Ian Backhouse has been elected chairman of the NFU’s Combinable Crops Board. Mr Backhouse, a farmer from Goole in Yorkshire, succeeds Arthur Hill who has stood down after two terms in office.
Life in the old girl yet
13/03/08. One of Winnie's minders at the NPA London rally - consultant Nick White of Pork Chain Solutions - thought he detected signs of her coming into heat during the rally. A few days after her return to Prosperity Farm, Winnie became boisterous, lifting the gate of her paddock and chasing a radio interviewer around.
Marianne Hill, of Prosperity Farm, decided to let nature take its course and provided the necessary male company. After a day of x-rated behaviour in the paddocks, there is a possibility, albeit not a strong one, that Winnie could be a mum again.
Pig feed sales fall
12/03/08. Retail production of pig feed is up six percent over the past 12 months — but this tells only half the story. Starter and creep feed fell from 71,000 tonnes in November to 63,000 tones in January. Link/early grower feeds dropped from 61,000 tonnes to 55,000 tonnes. Grower feed dropped from 31,200 tonnes to 28,500 tonnes. Finishing feed was down from 62,200 tonnes to 58,300 tonnes. Pig breeding feed fell from 34,000 tonnes to 33,100 tonnes. These figures are another clue to the cutbacks currently taking place in the national herd.
Allied industries help Winnie
12/03/08. Looking after a retired celebrity isn’t cheap and following the NPA London rally - where Winnie was the undisputed star - Hugh Crabtree, of Farmex, wanted to do something to ease the financial burden on her keeper Marianne Hill, of Vitality Farm in Oxfordshire.
BOCM Pauls and the Booth Group immediately offered help - BOCM Pauls with sow feed and James Booth with a new farrowing ark.
Details of how and when the goods will be supplied haven’t been finalised but it is envisaged that Vitality Farm will be able to collect bagged sow feed from BOCM Pauls’ agent at Thame, in Oxfordshire, whilst James Booth will arrange to have a new steel ark, worth £350, delivered.
Hugh Crabtree is delighted with both companies’ generosity. He points out that Marianne and her daughter Marie went well beyond the call of duty in supporting the London rally, where they were on duty all day and kept her well groomed for her meetings with (other) celebrities and several leading Members of Parliament.
He points out that the industry may need to use Winnie again, as she is still quite clearly still a massive draw, and therefore it is only right that the industry should contribute to her upkeep.
l NPA Trade Directory l Mechanical data l National Pig Association l Defra l BBC weather l
l Environment Agency l Food Standards Agency l Quality Meat Scotland l Scottish Executive l
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