This news service is provided for NPA and its members — click on the blue logo above to go/return to the NPA website

» See the London Rally Gallery here

29/03/08

 

Danish pig producers — the poor men of Europe

It will give British pig producers little comfort to realise that conditions are even more desperate in Denmark.

A Danish newspaper has calculated that Denmark's producers have lost nearly £1b over the past six years and will lose £300m this year alone. No wonder, with figures like these (above).

"How do they survive?" demanded one bemused British producer today. "Can they push water uphill whilst walking on water at the same time?"

Despite producing a consistent product designed to meet the needs of the global pigmeat market, Danish producers are the poor men of Europe.

Annual bonuses and excellent productivity cannot repair the damage being wreaked on the industry by chronic low prices. "Many producers would be better off quitting," according to a Danish Farmers' Association spokesman recently.

And a senior Danish banker has said that half of Denmark's pig producers are at risk of going out of business in the next two years — a prediction that has been interpreted by some producers as an expression of no faith in the industry.

Danish producers are unimpressed by the returns being achieved by their cooperative Danish Crown. Many will have to pay their bank charges in April, and they are not looking forward to it.

There are signs that producers are increasingly falling out of love with the co-operative. Recently some of Denmark's largest producers tore up their contracts and now send their pigs for slaughter across the border in Germany, where they get a better price.

And some producers have demanded that Danish Crown quit buying up abattoirs in other countries and concentrate on looking after its members at home.

None of this makes happy reading for British producers, many of whom are now suppliers to Danish-owned abattoirs, such as Geo Adams at Spalding.

British producers may have sympathy for their much-put-upon Danish counterparts, but they are hardly in a secure position themselves.

The DAPP will almost certainly continue to rise over the next few weeks, to restore the differential between the European reference price and the British price, but it has a long way to go before hitting the 140p "sustainability mark".

Producers who believe it will reach 140p this year — and stay there for the duration — will stay in pigs and reap the rewards, but the current high level of culling indicates there are some who are not optimistic, or who have simply run out of credit.

One large producer told me this week that he is budgeting for 140p in September and 155p in autumn.

Whether these prices are achieveable depends on the strength of the euro and whether sufficient pigs have been culled on the continent — is five percent enough? — and whether retailers and processors make a concerted effort to ensure retail price rises reach farmers.

In England, producers are planning to demonstrate outside Asda House in Leeds because BPEX retail price data indicates that Asda has been a drag on prices.

Producers are also mindful of what chief executive Andy Bond said recently. The Sunday Telegraph quotes him as saying, earlier this year: "I don’t think it’s acceptable to say that if you demonstrate [as a supplier] that costs have gone up, we will accept increases. I think our vendors have to do their own restructuring so they are not passing on cost price increases."

There are people at Grampian in Scotland who claim Asda has been ahead of Tesco and Sainsbury's in supporting British pig producers and has always been the fastest of the multiples to put money into pigs.

However the Scottish breeding herd fell 12 percent last year and according to Scottish NFU president Jim McLaren, the word "crisis" has never been more apt.

"The Scottish pig industry is losing producers at a rate of knots and if this haemorrhaging continues we will lose our entire herd in Scotland. It’s as simple as that."

Has there been sufficient culling to give 140p or more for the duration of high feed prices? See the charts at

Pigs are bad... but we won't tell you why

Extraordinary behaviour by a government agency has provoked Manitoba Pork Council into withdrawing funding for independent third party environmental research.

Manitoba Conservation has imposed moratoriums on pig industry expansion in three areas.

“Obviously, for whatever reason that only government is privy to, they have walked right past all of the research that has been done over the years,” said Bryan Ferriss, environment committee chairman at Manitoba Pork.

Producers had been offered no explanation by government as to what research it had looked at to cause it sufficient concern to introduce a permanent moratorium, he said.

If government can be convinced to at least discuss the moratorium and the reasons for it, the pause in research funding will be reconsidered.

Next week...

 

1. The Spring 2008 issue of Agskills News will be available here for download next week.

28/03/08

Traffic Lights report

At last something of a sellers market is starting to emerge with a combination of factors including dwindling supplies, the € hitting a new record high of 79.1p and higher retail food prices. Coupled to this the GB Euro DAPP continues to improve and now stands at 114.3p, meaning that those selling on contracts of DAPP plus 4p are now receiving over 118p. Traffic Lights commentary.

Its not climate change we have to worry
about... it's government's reponse to it

By Nick Bird, of Farmex

Much has been written of the impact of climate change on the United Kingdom, and, indeed, is being written. The government has commissioned reports covering a range of industries, and one awaits their findings – what the pig industry is supposed to do to “prepare for climate change” - with bated breath. There is nothing so exciting as a government report! The trouble is, it’s not much use for anything in real terms – at least so far as the potential change in climate is concerned.

One of the problems with climate change is that, at a practical level, it is little more than a minor statistical drift that is, for the most part, hidden within much larger year on year variation. It means that this, that or the other kind of weather will become (statistically) more common but only in the very long term does it become measurably more extreme. When climatologists talk about “significant climate change” what they mean is “statistically significant” – beyond mere chance or random variation.

Any salesman who is trying to persuade you to buy (or not buy) this that or the other because of recent climate change should be treated with the contempt they deserve. Yes, it was hot last July. That’s not climate change.

In practice, the changes that will occur are somewhat smaller than those that we already ignore. A producer in Scotland does not, for example, fit more insulation than one in Dorset. A Yorkshire farmer does not put in more heating capacity than one in Devon. The recent climate changes (by recent, I mean since 1914) – and those projected towards the end of this century – are smaller than those between the south and north of the country. A pig producer could “solve global warming” – in his or her lifetime – by moving 50 miles further north. (See chart.)

In practice, the greater impact of “climate change” on the pig industry will not be the change in climate itself, but the government’s reaction to it. To put it another way, what we need to do in response to climate change will be relatively little compared to what the government makes us do.

As an example, we could look at the Climate Change Levy. This was a tax that was put on fossil fuel inputs, so that it could be – partly – taken off again, in return for doing a lot of paperwork. It is somewhat arguable whether this government strategy had any particular positive impact on the energy use of the industry but, whatever, a lot of people have expended a lot of effort responding to government demands in this respect. If, as the government’s tax-it strategy suggests, minor increases in price were a significant factor, then we would have expected the energy price increases of the last couple of years to have had an enormous impact. They have not.

What we can expect is increasing regulatory burdens as a result of climate change. Clearly, the United Kingdom pig industry is virtually insignificant in the broader picture. The pig industry will, whatever, be caught in the crossfire.

In my view, then, what the United Kingdom pig industry needs to do – to prepare for climate change – is to “be prepared” for the regulation that will ensue. This is rather more about political strategy than climatology, one element being to be ahead of the game. It would make sense, for example, to have the facts and figures yourself – have your own tame experts - rather than relying on those of the government. It would make sense to be proposing future legislation – with a long timetable – rather than fighting that sent down from Europe.

(Until, that is, some future government moves its sights elsewhere, as it inevitably will.)

Dear Mr Dee-jay...

Next week's 'Pig Issue' tour gives the industry another opportunity to persuade radio stations to play Stand by Your Ham, which in turn should help raise the profile of British pork. This list gives the text request numbers for over 200 radio stations across the country, listed alphabetically by town. All pig industry people have to do is text their local stations, saying "Please play Stand By Your Ham by the Flying Piglets". Please forward the list to anyone who you think might want to help.

The world is reopening its doors to Britain

A campaign to recover export markets following lat year's foot and mouth outbreak is achieving a remarkable success rate. So far ten countries have agreed to re-open trade with Britain.

The countries are Algeria, Australia, Canada, Malaysia, New Zealand, the Phillippines, Singapore, South Africa, Thailand and the USA. Hong Kong had already restarted trade with Britain.

The campaign is being run by Defra, BPEX and EBLEX. Export manager Jean-Pierre Garnier, said: "We are also in advanced discussions with ten other key target markets including China, Japan, Korea, Russia and the Ukraine with visits from foreign veterinary teams planned in the near future.

"Veterinarians from overseas are genuinely impressed by the thoroughness of the United Kingdom's approach to last year's foot and mouth outbreak.

"The positive results stemming from this programme provide a very good example of effective collaboration between Defra and the meat and livestock industries."

Trade within the European Union restarted about three months ago and the latest agreements follow on from the declaration by the World Organisation for Animal health on 19 February that the United Kingdommis officially foot and mouth free.

Pig breeder back on the export trail

British-based pig breeding company UPB Ltd has sent three consignments of breeding stock totalling 450 great-grandparent and grandparent sows and boars to Ukraine. The pigs will form the basis of an in-house breeding programme being set up by one of the country’s agribusinesses. The deal, which is worth more than £300,000, will be supported by a three-year technical agreement. UPB group chairman and managing director Ian Torrie praised Defra, Northern Ireland authorities and United Kingdom industry organisations for working hard to get the necessary certificates in place to allow exports to resume.

Producers protest outside supermarket head office

Dunnes Stores in Ireland is using pigmeat as a loss leader, claimed producers when they protested outside the company's head office in Dublin. "The evidence is to be found in the Sunday newspapers every week where discounted pigmeat and half-price offers are constantly being used as headline grabbers to pull in customers," said Irish Farmers Association president Padraig Walshe. The average Irish pig producer has now built up losses of £80,000 and there is an accumulated industry loss at producer level of over £30m. As a result of the dominant position of retailers, producers now receive 18 percent of the retail price of pigmeat, with retailers and processors taking the remainder. This compares with a figure of 35 percent in the 1990s.

Government withdraws funding

The government is to withdraw financial support from Food From Britain, which was set up to promote British food at home and abroad. Unless private sector money is found to support the organisation it will close by March next year.

New migrant worker website

The Health and Safety Executive has introduced a migrant workers website offering guidance for employers and workers. The site has been developed to help migrant workers understand their rights and responsibilities. They also explain what employers need to do to manage the health and safety of migrant workers.

Nitrate Vulnerable Zones

Earlier this month, the Environment, Food and Rural Affairs Committee probed Defra's plans for Nitrate Vulnerable Zones. An uncorrected transcript of the proceedings can be found here. Nigel Penlington of BPEX (who has read it all) says some of the pig industry key points have been taken into account and references were made to Winnie's recent appearance.

27/03/08

Three little pigs update

Thanks to everyone who has offered help with the "Three Little Pigs Tour", which will cover the following 10 towns and cities. (Please note, the Oxford gathering has been cancelled as it clashed with another event.)

Monday March 31
• Newcastle 9am Times Square, International Centre of Life
• Harrogate 12.30pm Weeton’s Food Emporium
• Hull 3.45pm Queen Victoria Square

Tuesday April 1
• Derby 9am Phone Boxes in City Centre
• Nottingham 11.30am The Forest Park

Wednesday April 2
• Ipswich 9am Corn Hill
• Norwich 12pm City Centre, The Amphitheatre (outside The Forum)   • Cambridge 3.15pm Cambridge, City Park

Thursday April 3
• Bristol 9am St Augustine’s Parade
• Southampton 3.45pm The Monument/The Bargate

Logo no-go

The European Commission has withdrawn its proposal for an organic logo with the word "bio" written across it. United Kingdom organic producers pointed out that "bio" doesn't signify "organic" to most consumers. There were also complaints that the logo bore a close resemblance to the logo of a well known German supermarket. A competition to design a new organic logo will be held during summer.

Wholesale prices struggle in the United States

The large increase in United States pig production in recent years is continuing to force down prices. Wholesale price — or the “pork cutout value” — had fallen to below £30/cwt by November, a price not seen since early 2004. The price recovered somewhat in January and February but has struggled since early March. Primal cuts, for instance, are down 32 percent.

Does British outdoor pork have export potential?

Do our high welfare outdoor-bred pigs, and finished pigs reared on straw, represent an opportunity to sell branded consumer products on the export market, rather than dump what we cannot use ourselves on the world commodity market?

This is the question that will be posed by Ian Campbell in his RAC Pig Fellowship report, which is due to be given at British Pig and Poultry Fair next month.

Northern Ireland sees green shoots

"The continuing fall in pig numbers throughout Europe is, at long last, starting to have a beneficial impact on producer returns. But we still have a long way to go yet," says Northern Ireland producer Robert Overend.

He told Farming Life that local pig farmers need 126 pence a kilo to break even. "But at least there is now some light at the end of the tunnel. Those producers who have remained committed to the industry need a reasonable price for their pigs for a sustained period of time, and one way of achieving this is for local consumers to put more Ulster pork and bacon products into their shopping trolleys."

Breeders cross with Waitrose

Waitrose is in trouble with English breed societies for not making clear when its English breed pork products come from crosses. Gloucester Old Spot and Berkshire breed societies have both complained to the retailer.

Commission explores mandatory country-of-origin labelling

Now would be a good time for producers to talk to their local MEPs about country-of-origin labelling, says NFU. The European Commission has appointed a rapportuer — German conservative MEP Renate Sommer — to write an opnion on a proposal for mandatory country-of-origin labelling.

26/03/08

Stand by Your Ham

What the Wall Street Journal says. (Thanks to Simon Carlton for sending the link.)

New Product Award

Pig Fair New Product Award entry forms are here.

Nine new galleries

Nine new sections have been added to the London Rally gallery. Go HERE to view them.

Pig Discussion Groups

It is useful for the industry to have a topical list of pig discussion group contacts. Please help by making sure your group is represented on the database that will appear on this site well before the next round of meetings. Complete the form HERE (or ask the appropriate person to complete it). Email addresses will be secured in the database so they cannot be robotically harvested for spam.

 

 

 

 

 

 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

Pig World , PO Box 100, Benniworth, Market Rasen LN8 6LE, United Kingdom