Monthly Market Report. August 2013

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1 Monthly Market Report August 2013

3 MARKET REPORT August 2013 Cattle Prices and Supplies p/kg dwt p/kg lwt p/kg lwt Scottish deadweight prices Steers 2012 Steers 2013 Heifers 2012 Heifers 2013 Prime cattle - Average auction price Scotland 2012 Scotland 2013 E&W 2012 E&W Scottish auction prices for cull cows As July ended and August began prime cattle prices fell sharply. In the week ended August 3 rd, deadweight steers declined by 5p/kg to 413p/kg while heifer prices cooled by 3p/kg to 411p/kg. This offset gains to producer prices during July. Nevertheless, prices were still 17% ahead of their level at the same point last year. Prior to the decline, Scottish prices had held firm while they had eased back seasonally in England and Wales. After a strong start to the month, auction prices similarly fell back sharply in the final week of July. At 226.5p/kg lwt, the prime cattle average fell 11p/kg on the week and was at a 2-month low. Prices then moved forward by 2.5p/kg in the opening week of August, leaving them 14% higher year-on-year. The premium over prices south of the border narrowed for a second week, but at nearly 29p/kg it remained close to double its average for the first half of the year (H1). 110 Auction prices for cull cows fell 100 sharply in the final week of July 90 before steadying at the beginning of August at 126p/kg lwt. Similar to the market for prime stock, this apparent correction took place after the historic seasonal downwards trend had failed to materialise earlier in July. Deadweight cow prices declined for four consecutive weeks following a sharp increase at the beginning of July. Despite this seasonal move lower, cows were valued 3.5% higher year-on-year in the week ended 3 August. According to slaughter statistics from Defra for June, UK abattoirs killed more prime cattle than a year earlier for the first time since September Throughput was 5% higher at 150,900 head. However, carcase weights remained much lighter than a year ago and so production volumes increased by a slower rate of 2.5% year-onyear. In the first half of the year (H1), prime cattle slaughterings fell 2% with the volume of meat produced down 4%. 1

4 The number of steers killed showed the smallest annual increase of 1%. This was much lower than the 8% rise in young bull numbers and an 11% rise in the number of heifers slaughtered. The sharp rise in the heifer kill suggests that strong prices coupled with a challenging twelve months led to fewer heifers being retained for future breeding Clean Cattle - Scottish slaughterings 3 week rolling average 2 At Scottish abattoirs, the year-onyear increase in prime cattle slaughterings was slower than in the UK as a whole, rising by 3% to 32,500 head. Heifers continued to prove relatively better supplied than steers, with numbers up by 6% compared with just 0.1% for steers. It was also the fifth successive month during which more heifers were slaughtered than a year earlier. Having edged lower in the previous month, the number of young bulls killed returned to growth, rising 4% over June 2012 levels. During H1, prime cattle throughput at Scottish abattoirs totalled 213,000 head and produced 75,400t of beef. The combination of lower slaughter numbers (by 0.4%) and lighter carcase weights meant beef production fell 2% year-on-year. For the second successive month, UK abattoirs slaughtered fewer mature cows and bulls than a year earlier. Throughput decreased 3% below June 2012 levels following a 5% decline in May. This suggests that an improvement in weather conditions has slowed the culling of breeding stock. North of the border, slaughterings of mature stock also contracted relative to last year for a second month. Numbers were down 11% on the year. The slowdown in culling of cows is in contrast to the increased supplies of heifers and is the reverse of what happened last year. Perhaps the average age of the breeding herd has now become younger and more productive, releasing more heifers for slaughter. Nice weather throughout June and early July appears to have driven a significant change in consumer beef buying habits. Indeed, the total volume of beef retailed in GB declined by more than 8% year-on-year in volume during the four weeks to July 7 th. Furthermore, within the figures there was a sharp contrast between sales of burgers and sales of fresh beef. While the volume of burgers purchased rose 17%, sales of roasting joints and stewing beef fell by around 15%, steaks fell 9%, and mince sales were 4% lower. UK vs EU28 Price (Steers R3) Prime cattle prices generally edged lower on the continent during July. Young bulls declined 1c/kg dwt to 3.73/kg dwt ( 3.24/kg). However, the EU average for steers and heifers 340 fell by larger margins, of 20c/kg 320 (4.5%) and 8c/kg (2%) respectively, 300 but these were pushed much lower 280 by higher weightings of UK and Irish prices in the sample. France and UK 2013 UK 2012 EU EU Poland were the main exceptions with prices tending to rise on the month, while in Spain and Belgium prices were flat. p/kg dwt

5 Cow prices showed 3-5% declines across most of the EU. Again France and Poland were the main exceptions, as prices picked up slightly on the month. As supply constraints showed signs of easing in May, the UK s beef exports were just 100t lower than in the same month of last year, having been a combined 2,300t lower in March and April. Monthly shipments summed to 8,800t. Nevertheless, increased requirements from multiple retailers for home produced beef are likely to have continued to bear down on export opportunities. UK Beef exports During May, deliveries to France, Belgium and Germany continued to run well ahead of 2012 levels. There was also a return to growth in shipments to Holland and Italy However, sales to the largest UK customer, Ireland, declined sharply as its domestic production continued to 0 show significant year-on-year expansion. There were also declines in deliveries to Sweden, Denmark, Spain and Poland. Exports outside of the EU continued to perform worse than last year and accounted for just 3% of total exports. Tonnes Tonnes For a fourth consecutive month, UK beef imports trailed 2012 levels in May. Shipments of 18,300t were 8% lower than a year earlier. Fresh beef imports were flat, following three months of contraction but imports of frozen beef continued to decline sharply. Lower imports of frozen beef are likely to in part reflect a shift in consumer purchasing away from processed product and ready meals since the horsemeat scandal. However, the year-on-year decrease can also be linked to high levels of imports of frozen manufacturing beef in the lead-up to London Shipments from the UK s number one overseas supplier, Ireland, were 4% lower than in May 2012 as a sharp decline in imported frozen beef more than offset a slight rise in fresh beef. Meanwhile, imports from Holland, Germany and France all fell sharply on the year. In terms of non-eu suppliers, Brazil delivered less beef than a year earlier for the first time in 18 months, but there were increased imports from Oceania, while trade with Botswana continued to lift following its renewal of market access in April, after a 26-month FMD-related suspension. News Round Up UK Beef imports Slaughter data for Ireland s export plants continued to show increased supplies compared with 2012 into the third week of July. In the three weeks to July 22, 58,800 prime cattle were killed compared with 50,250 in the same period last year, an increase of 17%. This is well above the 10% rate of increase in the opening 28 weeks of the year. At the same time as the rate of growth in slaughter numbers has picked up there has been a notable decline in Irish cattle prices. Having peaked at 3

6 4.43/kg dwt ( 3.77/kg) in the week ended June 16 th, the average R4 steer traded at 4.10/kg dwt ( 3.53/kg) in late July. Meanwhile R4 heifers have fallen 45c/kg since reaching 4.67/kg ( 3.98/kg) in June. In addition to an upturn in the rate of growth of domestic supplies, lower prices may well have resulted from reduced import demand from GB where prime cattle supplies have also improved recently. USDA data puts the average retail value of fresh beef in the US at $10.70/kg ( 7/kg) in the second quarter of This was an increase of 4.5% on the year. However, since the net farm value per kilo of beef retailed increased at a slightly quicker pace of 5%, the producer share of the final retail price edged up to nearly 55% from 54.5% a year earlier. This was below the producer share in the UK which averaged approximately 59.5% in Q Live prices paid for US steers averaged around 280c/kg lwt (182p/kg lwt) during Q2, compared with 213p/kg lwt in GB. Meanwhile, the average wholesale value per kilo of choice beef (middle of the three categories of US retail beef quality) increased by 4.5% year-on-year in Q to approximately $6.70/kg ( 4.40/kg). However, this was less than the 6% rise in the average choice beef retail price to $11.60/kg ( 7.50/kg), indicating that retailers captured a greater share of the revenues generated from sales of choice beef. The weakening of the Australian Dollar by 13% against the US Dollar over the past 3 months has helped increase overseas demand for Australian beef. The combination of a weaker currency and increased domestic supplies led to July export volumes being the highest on record, beating the previous high of just over 103,000t set in May 2013 by around 3,000t. Exports to Australia s principal markets in Asia (Japan, Korea and China) all showed growth while deliveries to the Middle East reached a new peak. Growth into East Asia may also have been assisted by tight supplies in Australia s main competitor in these markets, the USA. Indeed, USDA figures showed that US beef production was down 2% year-on-year in the week ended August 3 rd and by 1% in the year-to-date. Furthermore, tight supplies of cow beef in the US (-8% year-on-year in the year to the end of June) have helped Australian exporters gain a foothold into both the US and Canadian markets for manufacturing beef. Australia s live cattle trade has also been on the up this year. Monthly figures for May showed a near-50% increase over the same month of the previous year with 82,800 cattle shipped overseas. Half of this total went to Indonesia and the 84% growth rate in deliveries to its largest customer underpinned much of the overall increase. However, this significant growth rate is mainly down to a rebound in shipments after a sharp fall in This decline came after a documentary in the summer of 2011 revealed poor animal welfare standards in Indonesian slaughter plants and this led to government restrictions on the live trade. In May 2011, prior to these restrictions, live shipments to Indonesia had totalled 81,900 head. Other large buyers of Australian cattle during May 2013 were Russia (16,500 head), Israel (11,500 head) and the Philippines (7,700 head). In June, Argentina exported 7,700t of fresh beef. This was a 45% increase over the same month last year. Chile was the largest customer, buying 1,730t, closely followed by Russia with 1,660t and Israel with 1,300t. Other significant buyers included China (700t) and Morocco (625t). Germany was the most significant EU customer, taking delivery of 370t in June. During the first six months of the year, total exports of 48,600t beat shipments in the same period of 2012 by 8%. Chile accounted for 29% of these sales, while Russia and Israel took respective shares of 19% and 20%. Meanwhile, shipments of the higher quality Hilton cuts have been 4

7 slightly higher than last year over the first six months at 11,900t. 95% of this beef was delivered to just three countries: Germany (6,600t), Holland (3,200t) and Italy (1,600t). Whereas German purchases were 11% lower year-on-year, Italy and Holland bought 10% and 29% more Hilton beef, respectively. Uruguayan beef exporters have also been able to increase their sales so far this year with shipments rising 3% to 208,700t in the opening 28 weeks of Since March export prices have been cheaper than in both 2011 and 2012 and this is likely to have assisted trade. Interestingly, the distribution of exports has altered much more significantly than the overall volume. China has increased its imports of beef from Uruguay by a factor of 5 to become the largest customer with 48,400t, converting a 4% share last year into a 23% share thus far in The USA also increased its share; to 15% from 12% last year, buying 30,800t during the 28 weeks, up 28%. However, these increases were nearly offset by a more than halving of deliveries to Russia to 27,300t from 60,900t in the same period last year. This reduced Russia s share of exports from 30% down to 13%. In addition, the EU, Israel, Chile and Venezuela all saw their shares decline by between 1 and 2 percentage points. 5

8 Sheep Prices and Supplies p/ kg dwt GB Deadweight R3L Lamb Price Heavy 2012/2013 Light 2012/2013 Light 2013/2014 Heavy 2013/2014 Lamb SQQ Auction Price As the volume of lambs being sold picked up seasonally, GB deadweight lamb prices eased during the first three weeks of July before declining sharply in the fourth week of the month. They then edged higher as August began. Having opened July at 491p/kg dwt, they averaged 413p/kg in the week ended August 3rd. This pulled prices 2% behind the same week last year, having traded 21% higher at the beginning of July. 280 Scot SQQ 2013/2014 Auction prices also commenced 260 E & W 2013/2014 August much lower than they had 240 Scot SQQ 2012/2013 E & W 2012/ begun July. The average new season 200 lamb price at Scottish auctions in the 180 opening week of August edged up 160 1p/kg on the week to 190p/kg lwt This was 12p/kg higher than two weeks before but 41p/kg lower than in early July. Nevertheless, it was up 6.5% on the year following two weeks of trading at a discount to last year. During July, changes in price were closely linked to changes in the number of lambs being marketed at the GB level (Scotland, England and Wales). Prices fell back sharply in the middle of the month as temperatures hit 30 C and producers rushed to the markets as lambs finished quicker than expected and feed stocks began to tighten in some areas. As producers reacted to lower prices by marketing fewer lambs in the following week, prices then steadied before beginning to lift again. p/ kg LWT One factor underpinning producer prices throughout July was carcase quality. Over the five weeks to August 3 rd, 72% of lambs graded R3L or better versus 68.5% a year ago. Nevertheless, there was a decrease in quality towards the end of the month. After a strong first three weeks where 74% of lambs reached at least an R3L grade, this dropped to 69% in the following couple of weeks; although it remained above year earlier levels. Slaughter statistics for June show that UK prime sheep supplies rebounded relative to last year having tightened in May. The number of prime sheep slaughtered totalled 839,700 head; a year-on-year increase of 7%. This followed May s 5% decline and was the fifth month to show an increase so far in Nevertheless, numbers were slightly below the levels of two years ago. During July, GB auction market figures showed increased sales compared to last year with 6% more new season lambs marketed than a year earlier. Most of the increase came in the first half of the month when the weather was excellent and prices were strong. Numbers were close to 20% ahead of last year s levels during the first three weeks of the month and sales in the week ended July 17 th were a 6-year high for mid-july. However, there was a sharp fall in numbers in the week ended July 24 th as many producers stayed away from auctions following the slump in prices. 6

9 In Scotland, slaughter data continued to show significantly tighter supplies of prime sheep than in 2012 into June. Clean Sheep - Scottish slaughterings 3 week rolling average Monthly throughput was 23% below year earlier levels having trailed by % in May and by 5% in April. As a consequence, prime sheep supplies ended H1 3% behind last year s levels after being up by 5.5% at the end of March. Auction market figures indicated little improvement in July with 12% fewer new season lambs sold than in the same month of Data from Kantar Worldpanel indicated that lamb consumption continued to exceed last year s levels into the first week of July. Sales volumes in the 12 weeks leading up to July 7 th were 9% higher year-on-year as spending rose 5% but the average retail price slipped back by 3.5% to 7.90/kg. Lower prices will once again have driven purchases by making lamb more competitively priced against other proteins which continued to prove more expensive than last year. Lamb chops led the sales growth figures, rising 26%, closely followed by leg roasts which increased by 23%, following a 19% year-on-year increase in the same period of Other cuts to show growth were lamb steaks (8.5%) and mince (7%), but there was a shift away from stewing lamb (-8.5%) and shoulder roasts (-28.5%). Cull ewe prices at Scottish auctions cooled in the second half of July, trading around the a head level, having averaged higher than 60 a head in the early part of the month. Prices have trended broadly flat in recent months, averaging 60 a head since the second half of March. Ewes continued to trade cheaper on the year, but the gap narrowed to 5 a head at the end of July from 15 at the start of the month. June slaughter data showed a 20% year-on-year increase in the throughput of ewes and rams across the UK. This pushed the rate of increase during the first half to 14%, with 965,600 slaughtered compared with 843,700 a year earlier. However, compared with two years ago they are only up by 2%. Heavy Lambs: GB Vs French Price Heavy lamb prices in the EU showed 8 a decline in July. Across the region, prices averaged 4.88/kg dwt 7 6 ( 4.20/kg dwt) in the week ended August 4, down by around 45c/kg (39p/kg) on the month. Compared 5 4 with the same time last year prices averaged 4% lower. However, the 3 decline in the average was mainly down to the high weighting of UK and 2013 GB 2012 GB 2013 Fra 2012 Fra Irish prices in the price calculation. Indeed, in France, Holland, Spain, Austria, Poland, Denmark and Romania producer prices picked up in July by between 2% and 7%. Compared to last year, prices have increased in France, Germany, Austria and Sweden. Light lambs averaged 6.21/kg dwt ( 5.35/kg) in early August, up by 34c/kg (29p/kg) since the end of June and by 6% on the year. Spanish prices showed the largest annual gain of 18.5%. /kg dwt 7

10 Helped by a weaker sterling, UK lamb exports soared above year earlier levels during May. Total shipments increased by nearly one-quarter to 7,400t. There was significant growth in sales to both the EU (23%) and further afield (28%). In the first five months of the year shipments abroad rose by 7.5% over the same period last year to 37,500t. There was a significant reversal in fortunes for sales into UK s largest market, France. Having been around 10% below last year s levels in the 3 months to April, May sales volumes grew 14% relative to the same month of Moreover, this growth came despite an 18% rise in the average value of these sales quoted in Euro (24% in sterling). Deliveries were also significantly higher to Germany, Belgium, Ireland, Austria, Holland and Denmark; although the Italian market proved more difficult. The 23% increase in total sales volumes to the EU came despite a 6% higher average euro price. Due to currency movements, this 6% higher euro price worked out at a 12% higher sterling price, resulting in monthly sales values growing by 37.5% year-on-year to 27.9m. UK Lamb exports Non-EU exports matched their average monthly volume for the yearto-date, and took a 16.5% share of total shipments. This was a slight increase in share compared to May Hong Kong was once again 4000 the principal non-eu market However, despite being more than 0 double the May 2012 volume, monthly deliveries of 775t were at their lowest level since last August. By contrast, exports to Norway were at their highest of the year so far and compared to May 2012, Norwegian purchases were up by one-third, at 330t. Tonnes Tonnes UK Lamb imports tightened in the southern hemisphere. May was the fourth successive month where the UK imported more sheepmeat than it exported; although the gap did narrow compared with March and April. Sheepmeat imports of 11,100t were at a four year high for the month of May. Compared to the same month last year they picked up by 15%. Though still showing significant growth, the pace slowed to its lowest since January as supplies Imports from New Zealand exceeded May 2012 levels by 14.5%, but this slowed from 37% growth in the previous two months. Shipments from New Zealand, at 8,900t, made up 80% of the monthly total; in line with their average for both the year-to-date and May Imports from Australia increased by 13% over May 2012 to nearly 880t as the average price fell by more than a fifth. They returned to being cheaper than imports from New Zealand, having been more expensive in April for the first time since last October. Ireland also continued to deliver more sheepmeat to UK customers than a year ago, with imports up to 575t from 450t a year earlier. Most of the UK s smaller suppliers provided more lamb than a year earlier; though France was an exception. 8

11 News Round up In the opening 12 weeks of the new season, Irish plants killed 15,000 fewer lambs than last year with numbers totalling 509,500 head. This was largely due to the slow start to the season, as numbers fell 17% year-on-year in May. Indeed, during June, kill numbers picked up by 4% and in the first three weeks of July they were 5% higher than last year. However, there has been some significant volatility in the week-to-week figures with the opening week of July seeing 23% more lambs slaughtered than a year earlier but then 7% fewer being killed in the week to the 22 nd of July. In recent years there has been an upwards trend in Irish lamb production and slaughter numbers since the start of the 2013/14 season are running 22% ahead of three years ago while year-to-date figures are up 27% over Kantar Worldpanel figures for household lamb consumption in France showed a 6.5% decline year-on-year in the 4 weeks ending July 14. While previous data had indicated a polarisation of the market through growing sales of cheaper lamb but lower sales of the more expensive cuts, this time both fell by 5% year on-year. Pricing data indicates that the sales volumes of lower value cuts fell at the same rate as the price increased, meaning that despite lower sales volumes, cash spending was flat compared with the same period last year. By contrast, the decline in the volume of steaks and roasts retailed came despite broadly similar prices. Slaughter data from Statistics New Zealand shows that abattoir throughput rebounded in June having fallen behind 2012 levels in May. 1.17m lambs were slaughtered during the month, up 11,000 (1%) on the June 2012 figure. 97% of the lambs slaughtered were graded for export; unchanged from a year earlier. However, a significant change occurred in the average carcase weight. Whereas in June 2012 the average lamb graded for export weighed 19.1kg, the average weight was a much lower 17.6kg in June As a consequence, the monthly output of export lamb fell 7% on the year to just under 20,000t. During Q2 2013, 5.2m export lambs were slaughtered, a decrease of 8% on the year, with the volume of lamb produced declining by 14% to 91,100t. However, a strong Q1, due to drought-induced slaughtering, means that numbers still ended the first half 9% ahead of 2012 levels with production 6% higher at 244,500t. Australia s live sheep exports proved buoyant in May, increasing by 48% year-onyear to 245,300 head. 99.5% of the sheep were delivered to the Middle East, led by Jordan (89,300 head), Kuwait (68,200 head) and Qatar (55,000 head). Israel (27,700 head) and Oman (4,000 head) were the only other countries to purchase more than 1,000 sheep from Australia. In the 12 months to May, the Middle East accounted for 98.5% of the 1.9m sheep exported. Kuwait, Qatar and Jordan bought more than three-quarters of these sheep. Turkey, Israel, Saudi Arabia and Bahrain were the other prominent buyers, averaging 5,000-10,000 sheep per month. Strong demand for Australian sheep from the Middle East stems from the similar climate, and the lack of scale in domestic production given the popularity of sheepmeat amongst the Islamic community. 9

12 Pigs Prices and Supplies (p/ kg dwt) Pigs DWt Adjusted Euro Spec Average - GB Having risen steadily for 19 weeks and reached a record high of 168.8p/kg dwt in the week ending July 14 th, farmgate pig prices then cooled during the second half of July. While this appears to have been a seasonal move, prices did edge back up again in the week to August 3. This meant that, at p/kg dwt, the producer received an average price 12% higher than in the same week last year. Prime pig slaughterings at UK abattoirs returned to their previous trend of low growth in June with 0.6% more pigs killed than a year earlier. This marked a recovery, following a 3% decline in May. Overall slaughter for H1 totalled 4.92m head, 0.3% above the H figure of just under 4.91m head. Heavier average carcase weights pushed UK production of meat from prime pigs up 1% to 389,150t in H Clean Pigs - Scottish slaughterings 3 week rolling average Monthly throughput of prime pigs at Scottish abattoirs in June was broadly flat compared with May at 22,450 head. Numbers averaged 5,600 head per week in May and June; down from 6,000 in April and 6,400 in March Kantar Worldpanel data indicates that pork consumption volumes fell back 0.7% year-on-year in the twelve weeks to June 9. This fall came despite a more than 3% increase in spending on pork as the average cost of buying pork rose by 4%. Sales of shoulder roasts were hit hardest, declining by 16% as prices lifted by nearly 13%. By contrast, the quantity of loin roasting joints sold rose by 4% as prices only edged higher. After decreasing in mid-july, 30kg 30kg Weaner Pigs - GB weaners have moved higher once again. As July turned into August they traded at an average per head value of 53.75, up 21p on the week; though still 13p short of their annual 40 peak reached 4 weeks before. 35 Compared with this time last year the average weaner pig is selling for Jan Feb Mar Apr May 2011 Jun Jul 2012 Aug Sep 2013 Oct Nov Dec a head more (35%). The likely driver is increased producer confidence and expectations of profitability due to the advance of finished pig prices at the same time as feeding costs have fallen back sharply. per head 10

13 The sow market continued to strengthen for a second month in July. Prices rose by 8.5p/kg dwt to close the month at a 13-month high of just under 115p/kg dwt. They then added a further penny as August began. With the UK sow market highly sensitive to trade developments, a higher price than last year may well reflect a much more favourable exchange rate plus rising farmgate prices on the continent. For a second successive month Grade E pigs in the EU increased in price by around 10c/kg dwt. As a consequence, in the week ending August 4, the EU28 average stood at 1.86/kg dwt. With GB prices edging lower in Euro terms in recent weeks this has seen British farmgate prices becoming increasingly competitive. Indeed, at the beginning of August the GB premium over the EU average narrowed to just 3c/kg, from 16c/kg in the first week UK vs EU Price (Grade E Pigs) of July and 22c/kg two months ago. 180 Over the past month Spanish and 170 Dutch producers have seen prices rise c/kg while Italian producers have 150 benefited to the tune of 20c/kg. On 140 the other hand, prices have flat-lined 130 in Scandinavia. p/kg dwt 120 Tonnes 110 UK 2013 EU UK 2012 EU UK Pork Exports HMRC trade data for May shows that UK pigmeat exports grew by one-fifth over the same month last year as 14,900t was shipped overseas. This was ahead of the 13% pace of expansion in the year-to-date. Shipments of fresh product grew 16.5% over 2012, but, at 13,600t, they were at their lowest monthly level of the year so far. However, exports of cured pigmeat grew more than 80% year-on-year and reached a 14-month high of 1,300t. Tonnes UK Pork Imports UK pigmeat imports trailed May 2012 levels by 6% in May Shipments totalled 48,900t, of which 61.5% was fresh pigmeat and the remaining 38.5% was cured product. Compared with May 2012, although both types of categories were lower, there was a shift towards fresh product as its decline was less than 1% while 13% less bacon & ham was imported. News Round up Feed wheat prices continued to slide through July as prospects for new crops remained positive across the globe. In central Scotland, feed wheat could be purchased for 175/t delivered at the end of July; approximately 7% cheaper than a month before. Soyameal prices also eased as July closed and are now trading lower year-on-year. Prices have eased recently due to beneficial rainfall in the principal US soyabean growing regions at a key stage of crop development, plus upwards 11

14 revisions to estimates of the Brazilian crop. Nevertheless, soyameal remained around 10/t more expensive than in late June as prices had increased in the first half of July a result of concerns over dry weather in the US (prior to the recent rains) and increased Chinese demand. In Spain, 3.41m pigs were slaughtered in May, producing 282,900t of pigmeat. Both kill numbers and meat production were down by 5.5% on the year. Over the January to May period, Spanish abattoir throughput totalled 17.67m head, 1% lower than in the same period of At 1.5m tonnes, pigmeat production was down by closer to 1.5%. The average pig carcase weighed 84.5kg between January and May 2013, down from 84.9kg a year earlier. Pig production has also fallen back in France this year. H1 figures show slaughter numbers down almost 3% on the same period of 2012 at 11.8m head. However, heavier carcase weights helped offset some of this in terms of overall production volumes, which fell by less than 2% on the year to 968,350t. Monthly figures for June were worse with declines of nearly 7% for both slaughterings and the quantity of pigmeat produced. 1.82m pigs were slaughtered, yielding 148,100 tonnes of pigmeat. This gave an average carcase weight of 81.1kg, fractionally higher than in June 2012 but 1kg below the H average. Data from the US Meat Export Federation (USMEF) for June showed monthly shipments of pork to be 2% lower year-on-year. The principal reason for the decline is greatly reduced access to the Russian market since February due to the high prevalence of ractopamine in US pig farming, a feed additive banned in Russia. As a consequence, exports to Russia were just 1,700t in June compared with 10,800t a year earlier. During H1 2013, shipments to Russia declined by three-quarters to 12,000t. In terms of other customers, the two largest, Mexico and Japan, both imported more from the US in June with respective annual increases of 22% to 35,100t and 6% to 32,700t. However, the third and fourth largest buyers reduced purchases. Deliveries to Canada fell 3% to 17,500t while shipments to China declined by 8.5% to 15,000t. During H1, total pork exports fell 11% to 818,500t at an average value of just over $3,000/t ( 1,950/t). Mexico imported 210,500t compared with 211,000t a year earlier, placing it ahead of Japan which bought 206,800t of US pork (6% lower). Deliveries to Canada rose 2% to 103,600t, taking it into third position ahead of China, which bought 74,300t, more than a third less. There has been an outbreak of Porcine Epidemic Diarrhoea Virus (PEDV) in the US. The virus is transmitted through faecal-oral contact or contact with a contaminated person or piece of equipment. Clinical signs are indistinguishable from gastroenteritis and it can have very high mortality rates in piglets. By the end of July, 378 cases had been reported across 15 states; although the majority of cases have occurred in just two states, Iowa and Oklahoma. No official biosecurity measures have been implemented as the disease is neither reportable to the World Organisation for Animal Health (OIE), nor the USDA. Nevertheless, industry bodies have advised producers to implement strict biosecurity measures when transporting pigs, based on research carried out since the disease initially emerged in May. The research, carried out by the National Pork Producers Council, the American Association of Swine Veterinarians and the National Pork Board, suggested that nearly one-fifth of livestock transporters were contaminated during transit, while a further 10% picked up the virus during the unloading process. The National Pork Board has so far committed $800,000 ( 515,000) towards researching methods to help mitigate the spread of the virus. Iain Macdonald and Stuart Ashworth August