Category: Protein

THE Australian beef producer’s share of retail dollar spend on beef has tracked sideways, after hitting all-time historical lows back in the December quarter.

The recent release of June 2024 quarterly Consumer Price Index data from the Australian Bureau of Statistics provides the opportunity to update the quarterly producer share of retail dollar calculation (see details below) published jointly by Episode3 and Beef Central.

As can be seen on the graph above, the recent recovery in saleyard cattle prices during the second quarter has helped maintain retail beef market share for producers, currently sitting at 35 percent for the second quarter, down marginally from 35.2pc in the March quarter, due to sideways movements for both saleyard and retail beef prices.

March was the best result seen for producer share since the second quarter of 2023, but a long way off the long-term trend line growth seen since the late 1990s.

Back in December the beef producer share of retail $ dropped to its lowest point since the data-set began back in 1998, at just 25.8pc. Back in 2022-23 when cattle prices approached record levels, the producer share index soared to almost 60pc.

In the graph above comparing the saleyards cattle price index versus the retail price index (1998 providing the benchmark at 100 for both), the saleyard index was little changed in the June quarter, having lifted 30pc between December and March from 271 to 352. Retail beef prices mirrored the sideways movement seen at the saleyard with the index increasing by just 1 point over the June quarter from 258 to 259.

Background to the producer share of retail prices calculation

In collaboration with analyst Matt Dalgleish from Episode 3, Beef Central last year launched a new quarterly series looking at trends in the beef producer’s typical share of the retail consumer’s spend on beef products.

A similar analysis was compiled by MLA for four years, before being discontinued by the industry service delivery company back in December 2016. The project was originally launched as a result of producer requests during the 2012 MLA annual general meeting.

Beef Central sought, and gained MLA’s blessing to resurrect the discontinued series, based on clear reader interest. The same formula is used to compile the new set of results as originally used by MLA (see explanation of the calculation below).

Episode 3 and Beef Central now jointly publish a quarterly report, soon after ABS quarterly retail beef price data is released.

The exercise sees national saleyard cattle prices in carcase weight terms being converted into an estimated retail weight equivalent and compared to average retail beef prices, as reported by ABS .

About the producer share of retail spend calculation

The beef producer share of the retail dollar is calculated using a range of assumptions:

• The national saleyard trade steer indicator is used as the benchmark livestock prices, representing animals suited for the domestic market. Livestock prices are collected by MLA’s NLRS.
• Converting the carcase weight price to an estimated retail weight equivalent price is achieved using a retail meat yield for beef of 68.7pc.
• The indicative retail meat prices are calculated by indexing forward actual average beef prices during each quarter, based on meat sub-group indices of the Consumer Price Index, provided by ABS. These indices are based on average retail prices of selected cuts (weighted by expenditure) in state capitals.

The producer share is calculated by dividing the estimated retail weight equivalent livestock price by the indicative retail price.

Click the links below to read earlier reports in this series:

March quarter 2024

December quarter 2023

September quarter 2023

June quarter 2023

September quarter 2014

Should cattle producers be paying more attention to retail margin share?

The idea that meat infected with African swine fever (ASF) might be getting into the country unchecked and circulating freely is a terrifying one for the pig sector.

According to Lucy Manzano, head of Dover Port Health Authority (DPHA), the ASF threat is now coming as much from commercial meat imports due to the flawed implementation of the Border Target Operating Model (BTOM), as it is from illegal meat imports.

This, she believes, is largely down to the previous government’s decision to build a brand-new border control post (BCP) 22 miles inland at Sevington to carry out sanitary and phytosanitary (SPS) checks for goods arriving at Dover Port and via Eurotunnel, rather than at the point of entry at Dover, where a perfectly good BCP already exists.

“The implementation of the BTOM at the Short Straits is not working effectively or consistently,” Ms Manzano told Pig World.

“We are aware that illegal imports of commercial meat are coming through in significant and concerning volumes and without appropriate intervention at Sevington.

“In addition, IT systems continue to work ineffectively and do not communicate with each other as required or expected – and Port Health controls in place at Sevington are not identifying and controlling consignments as they should be.

“We are being notified of goods being called for examination that don’t arrive, or do arrive and are turned away, or arrive and then sit there for long periods of time and have then been told to leave without checks at all.”

She said the inherited imported food system now operating at the Short Straits was based on flawed Defra data assumptions – a poor understanding of the type of food and the volumes coming through – and not opening a BCP at the border in Dover.

“As such, controls aren’t working as they should, the impact of which is a big hole in this critical border, which means meat is getting in unchecked or, if it is, checked in a very inconsistent and ineffective way,” she said.

Minimal checks

Defra has stressed that it is operating a risk-based approach that will see a significant reduction in the number of checks at Sevington.

It has also said the checks are being gradually phased in since April, although it has given no further indication of how it will up the frequency.

But in a recent letter to Defra secretary Steve Reed calling for action to address the situation, the UK Livestock Chain Advisory Group (LCAG), a coalition of 26 farming and meat industry bodies, said less than 10% of about 100 physical checks that should be taking place each day are happening.

British Meat Processors Association chief executive Nick Allen said only around 2% of goods coming through are being checked at Sevington. “How is that effective as a control?” he said.

This is partly due to the option of auto-clearance at the BCP, which means loads can be auto-cleared two hours prior to arrival.

Loads are auto-clearing through Sevington even if they’re entering via a different port as they know no physical checks will take place, according to LCAG.

Ms Manzano added: “Goods that should categorically not have come in have done so and with commercial papers.

“Our work has and continues to identify that commercial meat from ASF-restricted areas is clearly coming in at the straits without the checks required – exactly as we said would happen at the very beginning and warned the previous government of.”

Illegal meat checks

Meanwhile, Dover Port Health Authority, in conjunction with UK Border Force, continues to carry out checks for illegal ‘personal imports’ of meat at Dover Port.

“We have teams down there now, as we speak, on the tourist lanes carrying out ASF checks for, technically, personal imports, but they are largely not what we would consider personal imports.

“This is predominately illegal meat deliberately brought in, often in very large volumes, from those ASF-infected areas,” Ms Manzano added.

About 100t of illegal meat has been seized at Dover over the past two years, but it is widely acknowledged that this represents just the tip of the iceberg.

Yet Defra told DPHA in December that it was cutting its budget for this work from £3.2m to £1.2m in 2024-25, starting in April, and then to nothing in 2025-26. Despite this, the requirement for Dover Port Health to complete ASF controls has been extended to Coquelles, in France.

Funding of this critical work remains unconfirmed. “We are fully committed to completing these extended checks, and working with the new government, but we can’t do this critical work for GB biosecurity without the funding required to deliver the service,” Ms Manzano said.

“We have put forward funding models to be able to effectively control the risk at Dover and Coquelles. We await responses from the new government.”

Government help

DPHA has also written to Mr Reed calling for an urgent review of how the BTOM is operating at the Short Straits and the biosecurity value it is delivering for GB at this critical border.

“The current system is failing. It is absolutely not operating in the best interests of GB biosecurity and, as the Port Health Authority, it is our responsibility to be really clear about what is and isn’t working and to help the new government identify what needs to change, and to make some really swift adjustments to plug those holes,” Ms Manzano added.

The authority, and wider industry, is hopeful, that as parliament returns to full swing in the autumn, they will see some action from Defra ministers.

After all, food security minister Daniel Zeichner showed an active interest in the situation while in opposition and, since the election, Defra ministers have identified addressing border control flaws as a major priority.

“We are hoping that as they return in September, they move forward quickly with a review and start to unpick what is happening here now,” Ms Manzano said.

“We have lost sight of the purpose of border controls – it is not a documentary process. It is about keeping the bad things out. We want to see consistent and transparent checks of biosecurity value, carried out at the point of entry at Dover, our greatest line of defence. The move to Sevington is exposing us to entirely unnecessary and needless risk.

“It must be addressed before it’s too late and, as the port health authority at the border, we cannot sit back and ignore what is happening, especially when there are relatively simple solutions that could be activated quickly to secure this border and GB biosecurity.

“Dover Port Health’s objective is to keep GB safe and fix these glaring holes. If we don’t, the outcome could be catastrophic for us all, but especially for the UK pig industry.”

Ms Manzano’s comments reinforce the sentiments of the LCAG call to action for Defra ministers to address the risk posed by both commercial and illegal imports.

“I’d like to think Steve Reed, Dan Zeichner and co are listening here,” Mr Allen said, adding that the expectation is that ‘things will start to happen in early autumn’.

Key priority

A government spokesperson said: “Protecting UK biosecurity is one of our key priorities, and we are working with BCPs and traders to ensure checks are carried out effectively and swiftly. The UK has never had an outbreak of ASF.

“We are not complacent and suspected illegal meat products are routinely checked at the border to ensure they don’t reach our shores.”

Defra made it clear that it will continue to monitor and review the impact of the new controls, and work with industry, trade partners and enforcement agencies to try and minimise disruption and costs to trade, while protecting biosecurity.

It indicated it will work with the Animal and Plant Health Agency, Port Health Authorities and BCP operators to ensure BCPs operate effectively and are resourced appropriately, and that it remains committed to agreeing an appropriate funding model with DPHA to tackle illegal imports, with a focus on the ASF safeguard measures.

Defra remains confident, however, that BCP capacity, including staff resource, is sufficient for the current volume of checks, which it says are operating 24/7 and carrying out the inspections required.

Checks are intelligence-led and based on biosecurity risk, with the risk of legitimate commercial loads not attending Sevington mitigated by ‘robust, data-backed enforcement options’, it said.

9 September 2024

3 minute read

Editor’s note: The following is from a poster presentation by David Buckwalter and faculty advisers, University of Pennsylvania, during the 2024 annual conference of the American Association of Swine Veterinarians.

Lameness represents a widespread issue which affects viability and growth, ultimately impeding efficient production and adding extra costs to producers. The causes of lameness in growing swine, however, are poorly elucidated and often difficult to diagnose in the field. The objective of this study was to use gross pathological examination to compare lesions in lame and non-lame growing pigs to better understand the etiology of lameness in growing pigs.

Two production companies enrolled 5 farms each for a total of 10 farms. On each farm 2 pigs were chosen, a single lame pig (L) and a single non-lame control pig (C). Pigs were identified as lame if two observers agreed that the animal was slow to rise, limping, reluctant to walk or reluctant to place weight on one or more limbs. Pigs were euthanized and transported to a diagnostic lab for complete postmortem evaluation. Visceral examination was competed on all pigs, all four legs were excised, and each joint examined grossly. Joints were scored for the presence or absence of synovial hypertrophy, hyperemia, or effusion as well as for lesions consistent with osteochondrosis (OC) and physeal bone lesions.

One joint in each L pig that contained synovial lesions was swabbed and a swab was taken from the same location on the C pig from that farm. Odds ratios were calculated for the odds of OC lesions, visceral lesions, and having multiple types of lesions in the lame versus non-lame pigs using a Fisher’s Exact test.

Lameness lesions

The average farm size was 3,624 pigs and the mean age of the pigs was 14.6 weeks. Eight females and 12 males were selected. Eight sow flows were included with five being comingled. There were 16 times greater odds of having multiple lesions in the L pigs compared to the C pigs. The odds of having an OC lesion were no different between the L and C pigs. There was no difference in the odds of having a visceral lesion in the L pigs versus the C pigs.

All 10 of the L pigs had at least one synovial lesion while only 30% of the C pigs had synovial lesions. None of the C pigs had physeal bone lesions, whereas 30% of the L pigs had such lesions. (No odds ratios could be calculated for either of these lesions).

There was a significant difference in the median numbers of locations where there were lesions in the L pigs compared to the C pigs (P<.001) (Table 1). Lesions were evenly distributed between front and hind limbs with 16% of locations scored in the front limbs having a lesion and 14% of the locations in the hind limbs. Only one L pig joint was found to be positive for M. hyosynoviae and none of the C pigs tested positive.

L pigs had more lesions and were more likely to have synovial lesions than C pigs. Only one pig was found positive for M. hyosynoviae, so the cause of the lesion is unclear. In contrast to other studies of pigs this age, the osteochondrosis lesions found were mild and not more likely to be found in the L pigs, decreasing the likelihood of its involvement in the clinical lameness.

Systemic disease was not more prominent in the L pigs, indicating that lameness is likely not secondary to systemic illness with common swine pathogens such as Streptococcus suis, especially given that none of the pigs had overt septic lesions (fibrinosuppurative joint or bone lesions).

Determining the cause of lameness in these animals remains challenging, though bacterial pathogens that cause lesions to the synovium like M. hyosynoviae may be more likely than other causes based on these findings.

In this exclusive interview, Brad Freking, CEO of New Fashion Pork, shares his journey from the ground up in the swine industry and provides unique perspectives on the most pressing issues facing the sector today. Brad dives deep into the ongoing debate around loose sow housing, offering a viewpoint that contrasts with that of Brent Hershey. While Hershey has voiced criticism of certain industry practices, Brad emphasizes the need for unity, focusing on collaboration rather than internal conflict. He believes the industry should prioritize consumer choice and avoid attacking one another, as working together will better serve both producers and consumers alike.

We also explore the challenges of sustainability and how New Fashion Pork is adapting to rising costs and the need for innovation in modern agriculture. Brad discusses the importance of leadership evolution, the role of technology, and New Fashion Pork’s strategy for meeting changing consumer preferences for better product quality.

Additionally, Brad reflects on his greatest accomplishments and lessons learned as a CEO and shares his vision for the future, including the biggest opportunities and challenges for New Fashion Pork in the next five years.

Brought to you by Ceva Swine: https://swine.ceva.com/

CHICAGO — Circana’s annual report on “Eating Patterns in America” reveals consumers are switching up where, when and what they eat in response to changes in their daily lives.

The Chicago-based market research company said 86% of eating occasions are sourced from home. People also are eating breakfast earlier, and snacking away from home is becoming more popular, the report found.

Emerging trends in eating patterns are “really driven by the disruption of our daily routines,” said David Portalatin, senior vice president and industry adviser, food and foodservice, Circana. He said because of shifting home and work habits, lunch in the restaurant industry is permanently disrupted and has been 15% lower than it was in 2019.

“People pack their days with meetings, and then they look up and it’s 2:30 and they say, ‘What are we going to do about lunch?’ and dinner is at 6:30,” Portalatin said.

Snacks are more often filling the gaps left by foregone meals, he added, with some snacking happening in mid-morning, some in the afternoon and some at night.

“Two things that we’ve seen steadily increase over the years are the consumption of snack items during mealtimes — and sometimes in replacement of a main meal — and the increase of time between mealtimes,” he said. “It’s the ‘snackification’ of our mealtimes.”

In response, consumer packaged goods companies increasingly are developing foods and beverages offering the convenience, ingredients and value consumers want.

“For CPG companies, it’s thinking about crafting eating flexibility for consumers in three ways: price points, portion control and portability,” Portalatin said.

The trends are especially evident among younger people who have more flexibility, he said.

“They throw a collection of items in their backpack, maybe string cheese snacks, salty snacks for satiety, a bottle of water or juice for pleasure, and just have a snack and save some for later,” he said. “In any case, (the items) are packaged to go where the consumer goes.”

The 86% of eating occasions being sourced at home is up about 3 percentage points from pre-pandemic years, according to Portalatin. The eating trend is part of the overall shift in consumer behaviors that includes more people working at home and investing more time and effort in their kitchens.

“That doesn’t mean we’re all going to become Michelin Star chefs,” he said, adding, “We’re seeing more heat-and-eat options and more meals thrown into an Instant Pot.

“As a food manufacturer, if you can bring that kind of architecture to the home from items in the pantry or the refrigerator, those are the kinds of things consumers are looking for. We still want culinary exploration, and we still want to try global cuisine, so manufacturers are still developing items in response.”

As CPG companies continue to innovate, consumers continue to want to experiment by trying new products, Portalatin said. This trend is unlikely to wane, especially if new products are overlain with functional aspects and offered so that budget-conscious consumers perceive value.

“The consumer is under pressure right now,” he said. “It’s the cumulative effect of inflation and debt causing people to rationalize their spend across categories. They’re focusing in on the value equation and not just the cheapest item.” 

Ukraine’s surprise cross-border incursion into Russia’s Kursk region on August 6 has jeopardised dozens of large pig farms and huge processing capacities in the region.

Within a week, the advance was 12km deep, and this new chapter of the conflict may herald big problems for the Russian pig industry.

Kursk is Russia’s second-largest pig-producing region, after neighbouring Belgorod, which has been consistently suffering from cross-border shelling.

As of early 2024, Kursk’s pig population was almost 2.5 million head. The region houses Russia’s biggest slaughterhouse and processing plant, with a capacity of 4.5 million head a year, owned by the largest Russian pork manufacturer, Miratorg, nearly 100km away from Soudzha, a town at the epicentre of the Ukrainian offensive.

In a statement on August 19, Miratorg revealed it had helped its employees evacuate from the parts of Kursk affected by the fighting, not specifying whether any of its operations were affected.

As estimated by Smirnov, nearly 130,000 Russians were evacuated from the areas bordering Ukraine.  Miratorg employs about 8,000 people in the Kursk region, nearly one-quarter of its total workforce.

It is too early to judge whether the fighting has affected the pig industry’s output—much is still hidden in the ‘fog of war’, but recent events clearly show that some of the worst nightmares of Russian pig farmers are coming true.

Belgorod, Bryansk and Kursk – three regions bordering Ukraine – jointly house around 8 million pigs. Fears that the fighting could escalate into Russian territory were voiced by a prominent Russian pig company, RusAgro, in late 2022.

One of the biggest challenges for the Russian pig farms in the regions affected by the hostilities is filling the available vacancies, as the Russian economy deals with one of the worst labour-force crises in its history.

For example, a Russian poultry farm near St Petersburg has estimated it lacked nearly 30% of the workers needed for sustainable operation.

The picture is believed to be similar in the pig industry, where labour shortages is a pressing issue, even in the safe territories.

Reeling foreign trade

Fights raging in the Kursk region are not the only problem the Russian pig industry faces.

Mounting difficulties in making and receiving payments in the Chinese yuan have reached the point where Russian agricultural exporters have started to consider switching to barter trade, local press reported.

These problems stem from US authorities’ threats to impose secondary sanctions against foreign banks and financial institutions facilitating trade with Russian businesses.

This is bad news for Russian pork exporters, who have contemplated ramping up exports to China, following the withdrawal of the 15-year ban late last year.

In 2024, Russia could export 60,000-70,000t of pork to China, the Russian Union of Pork Producers estimated.

Most of this was due to be shipped in the second half of 2024, after deliveries reached only 10,000t in the first six months of the year.

The prospects of continuing exports to Vietnam, the largest foreign market for Russian pork outside post-Soviet space, remain vague, as difficulties in collecting payments for the delivered goods are also being seen there. In 2023, Vietnam imported 86,000t of Russian pork, 89% up on 2022.

Last but not least, the Russian pig industry is very dependent on feed additive imports. China meets around 90% of the demand in the Russian market, and any disruption in these deliveries would make the industry suffer.

It remains to be seen whether the barter trade can come up with a reasonable solution to this problem.

To “Read” Walt’s charts, keep the following in mind:

Support – this term refers to a trend line or price area under the market which is expected to hold the market from potential decline.

Resistance– a price area or trend line above the market that is expected to prevent or stall price increases.

Trend lines and channels – these long lines outline an established trend or band of price activity which is expected to continue.  Breaking beyond the trend lines will often indicate a change of trend. Walt tries to indicate an uptrend with green line, downtrend with red line, and a broken trend with a broken line. Trends thought to be of greater importance are thicker. A broken blue line may be a former, now broken line, expected to have subsequent importance. A blue sideways channel indicates a neutral or choppy market with little or no price bias either upward or downward.

Green and red arrows will often be used to highlight significant turns, buy or sell “signals,” or break-outs from trading patterns.

Reversal days (up or down) occur when a closing price occurs in the opposite direction from a previous dramatic trend.

Gaps in price action will be identified by yellow circles which usually hint at major changes of direction or price behavior.

Bull and bear flags and pennants are often highlighted as indications of small corrective moves in an otherwise larger price  trend.

Triangles may be outlined in order to indicate a contraction of highs and lows coiling for a later break-out in price direction.

Bull Trap – a false or failed chart break-out to the upside which draws bulls into a long position prior to a turn to the downside.

Bear Trap – a false or failed chart breakout to the downside which draws bears into a short position prior to a turn to the upside.

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Walt Breitinger, Commodity Futures Broker

 “Pinion Futures, LLC d/b/a Breitinger & Sons”

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This dialogue, led by Professor Strohschneider, brought together producers, scientists, environmental organizations, and consumer representatives to find consensual solutions to the challenges faced by European agriculture.

Agriculture is fundamental to Europe’s health, economy, and self-sufficiency. However, farmers are increasingly confronted with growing challenges, such as global competition and climate change. Europe is the fastest-warming continent, experiencing extreme weather events like heatwaves, droughts, and floods, which are all taking a toll on agricultural productivity. Soils are becoming increasingly depleted and polluted, which reduces their fertility and their ability to retain water and carbon. Furthermore, in some parts of Europe, water availability has already become a serious issue.

Despite these challenges, the agricultural sector also holds many solutions to mitigate and even reverse some of these impacts. The dialogue highlighted the progress made towards more sustainable farming, but also acknowledged that more ambitious steps need to be taken. Among the recommendations presented, there was a strong emphasis on ensuring fair incomes for farmers, promoting sustainable practices, and reducing red tape, especially for small and family farms.

The President of the European Commission, who closed the event, emphasized the need to continue supporting agriculture that works in harmony with nature and ensuring that farmers are fairly compensated for their environmental services. She also announced that, within the first 100 days of her next mandate, she would present a roadmap for the agricultural sector based on the recommendations of the dialogue.

This meeting represents an important step towards a more competitive, resilient, and sustainable agri-food system in Europe.

4 September 2024/ European Commission/ European Union.
https://ec.europa.eu/