Randall Parker Food Group

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Randall Parker Food Group

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Randall Parker Food Group

Uruguayan steer third most expensive in the world

by Magdalena Visca-Casas

The Uruguayan steer is the third most expensive in the world. It is more expensive than in Australia, New Zealand, Brasil or Argentina; the new High Quality Beef quota will help to sustain the prices.

The beef sector in Uruguay is starging a new phase. Very gradually, a new niche, the one of cattle finished with grain during the last 100 days is becoming more and more visible. The arrival of the quota can be an important factor to sustain a price differential which is harder and harder to maintain. Because the price of fat cattle, which dropped slightly this week, is keeping at a price level not achieved by the neighbouring countries, neither in Australia or New Zealand.

Several factors determine the price, one of them is a novelty since it can sustain the differential in the médium term, which is exporting at a higher price on average. The so called Quota 620 is promoting changes in the beef chain: the approval first, then luring the importers, and after the first loads which arived to Europe two months ago, the flow is becoming more and more streamlined.

In March 90MT were exported, in April they were 160, the forecast for May is to surpass 200MT. The big jump will come during the second half of the year, when the impact of the quota will be clearer which has the potential of superating the relevance of Hilton. On Aug 1st the EU will go from 20 thousand tonnes to 45 thousand, and the impact of that will be registered a month in advance.

Meanwhile the cattle management by the farmers generates prices which supérate in unusual proportions the Brazilian prices, which are persistently higher than Australia’s, in the short term the needs linked to the end of the quota and the operations with Israel will keep the market strong. The expectation of the AUPCIN (Uruguayan Association of Intensive Cattle Farming) is that the calf price will be stronger in the next couple of years, seeing in this the opportunity to turn an incipient business in something structurally strong.

The exporters are more cautious, they see this as business with potential but only starting. The strength of this business is that widens the cut scope to be exported, which is limited in the Hilton quota.  If the Quota 620 has an important impact, it will hit the Hilton quota too because the reposition steers would divide its destinations when a bit over 300Kg: some of them to the grass finished market and Hilton, and the other for the grain market and Quota 620, which is starting to happen.

The local prices are sustained by supply, given the scarcity of cattle shipped to the packers. The export deals are relatively small, and there is a strong competition with Paraguay for the Russian market. The European buyers are extremely careful and the important sales are basically to Israel, Chile and Venezuela. The supply has been reduced on and on since 2004, and the 2006 and 2007 seasons raided the herd. Today, there is an important retention by the farmers propelled by the good grass availability.

April’s slaughter has been the lowest since 2002. An even further low is expected for May and then a gradual retake during the second semester. This, is likely to be accompanied with increasing exports of grain finished cattle which will keep the prices up.

BPU – Criadores Hereford

The Hereford certified farmers have created a commercialisation programme which seems to be one of the first signals that the market will be divided between regular and 620. According to what has been approved, they will be signing specific six months contracts with the following foundations:
1. Fixed basis price for the whole period and grid.
2. Volume delivery Schedule according to supply contract.
3. 140 head mínimum basis per deal
4. Minimum carcass weight 260Kg.

by Magdalena Visca-Casas

SENACSA will start sampling FMD virus at country level in June, to determinate virus absence.

Howerver the effort the country has made in controlling and eradicating the virus has proven positive so far, the concern about the outbreaks origins is still there. The bordering countries authorities have prompted Paraguay to carry out the actions recommended by the international organisations in order to recover its Free from FMD with Vaccination status.

The samplng will detect viral circulation in the country, and the PANAFTOSA is the organisation in charge of designing the sampling model, with a strong intervention of the región bloc. The PAMA (Mercosur Free from FMD Programme) and the SENACSA will audit the sampling, and a Committee has been created by Panaftosa to follow up all what is to be done.

The OIE is assembled in Paris till Friday 25th May and they will evaluate a note in which the COSALFA is asking that the American countries views are taken into account, since these countries consider that their eradication plans have had important achievements and that the FAO strategy for the progressive control of the disease is not applicable to the region.  The  American countries have worked in FMD eradication well ahead than the FAO proposal, for which this should be applied to other continents, but not to SA.

América has kept the whole of Central America free from FMD and it was eradicated in North America in 1950, having had notorious improvements in the free from the disease áreas of SA.

Britain sells thousands of pigs to China in export push

Britain is sending thousands of pigs to China in a bid to boost exports and exploit Chinese people’s love of offal and pork.

Chinese farmers and food companies have placed orders for 2,000 high-quality British pigs to breed with their inferior quality domestic animals.

A delegation of British pig farmers is in China this week to further increase sales of live breeding pigs, pork and farm technology.

Jim Paice, the Food Minister, flew out to join the group yesterday and will spend much of the next week drumming up trade for British food exports.

China’s rapidly growing urban middle-class has developed a taste for pork and demand for the meat is soaring.

However Chinese pork is low quality and there is not enough to go around the estimated 230 million middle-class Chinese. Although China produces 46 million metric tones of pork a year, demand far outstrips supply.

British farmers are therefore sending high-yielding and healthy pigs for breeding in China in order to increase pig numbers over there.

The pigs, which are mainly from the Large White, Landrace and Duroc breeds, sell for around £1,000 each. Farmers estimate that there is enough demand from China to export up to £20 million worth of breeding pigs a year.

Farmers are also increasing meat exports to China.

As well as enjoying pork cuts, Chinese consumers have developed a taste for the so-called fifth quarter of a pig, which consists of offal and tripe.

Shipments of meat and live pigs form part of the food industry’s plans to grow exports of British food and drink by 20 per cent by 2020. Last year exports were worth just over £12 billion, according to the Food and Drink Federation (FDF).

Mr Paice said that there is “massive scope” to increase exports of breeding pigs, pork and farm technology to China, which will not be self-sufficient in pig meat “for the foreseeable future”.

via Britain sells thousands of pigs to China in export push – Telegraph.

by Andrew Pasterfield

The EU High Quality Beef 2 quota, generally referred to as the ‘grain-fed’ quota, allows the duty-free import of beef from animals that conform with a complex specification. Only 5 exporting countries can comply with the specification currently: USA, Canada, Australia, New Zealand and Uruguay. The annual volume under this quota rises from 20’000 to 48’200 tonnes from August and the EU Commission has chosen this moment to change the method of the quota’s administration. Hitherto an importer applied for an import licence without any necessity to demonstrate that qualifying beef had been produced. Unscrupulous importers (yes, they do exist) made multiple applications without any intention of using the licence, creating a massive over-application allowing them to sell licences to genuine importers at euro 1.00/kg or more for doing absolutely nothing.

To solve this problem, but possibly to create others, the Commission will introduce a ‘First-come-first-served’ system whereby the importer simply submits the required shipping documents as the ship arrives (including the certificate which proves the specification has been met),  to customs who pass it free of duty for general EU circulation.

This change will now allow Weddel Swift to fully develop the market for this premium product.

Thailand Bites into Brazilian Chicken Exports

THAILAND – Thailand looks set to return to a leading position in the global poultry market after the EU announced that it will end restrictions on imports of raw poultry meat from Thailand on 1 July 2012.

The end of the ban could cut prices for consumers at a time when they have been hard hit by inflation in other foodstuffs.

These are some of the main conclusions coming out of a new report from Rabobank ” The Return of Thai Raw Chicken – Global players need to change strategy.”

The restrictions on one of the world’s major poultry exporters followed an outbreak of bird flu in the country in 2003.

Japan also stopped importing Thai raw poultry and is widely expected to lift its own restrictions. Brazil is set to be particularly hard hit as it is currently the major supplier to both Japan and Europe.

The 2003 ban saw the poultry sector in Thailand lose 350,000 tonnes of export volume out of a total of 500,000 tonnes and suffer from years of overcapacity.

However, in recent years the industry has shifted its strategic focus to cooked processed poultry meat, for which exports were allowed. This strategy was so successful that the industry once again reached full capacity in 2010/2011, resulting in a first wave of investments.

The re-opening of the EU and Japanese markets could see Thailand’s raw chicken production grow by 20 per cent by 2015.

The EU and Japan have long favoured Thai products for their high quality and low prices.

via Thailand Bites into Brazilian Chicken Exports.

BRAZIL – Brazil’s broiler meat production is estimated to reach 13.3 million metric tons MMT this year as a result of domestic demand and a small recovery in exports.According to the USDAs International Egg and Poultry Review: Brazil, Brazils broiler meat production is influenced by the world economic uncertainties impacting some major export markets, as well as issues with some trade partners. Other factors include an over-valued Brazilian currency, a slowdown in the growth rate of domestic consumption, and higher costs of production due to higher corn prices.

Domestic consumption of broiler meat is expected to rise at a slower rate in 2012, up 3 per cent compared to 6 per cent in 2011, due to increases in disposable incomes of Brazilian consumers and broiler meat’s competitive price compared to other meats. Broiler meat exports are projected to rise by 3 per cent. The growth in exports is likely to be driven by higher sales of whole broilers in general, and chicken parts, in particular, to China and Hong Kong. Trade sources also expect higher exports to Egypt and Iraq in 2012.

via Brazil’s Chicken Production Forecast to Rise.