NUMBERTWELVE2011
ROTECNAWORLD
RESEARCH& DEVELOPMENT
Interregional & international competition in German piglet production
TECHNOLOGY
FUTURE
TR-2 Feeder : 6 Reasons for choice
Raw materials futures Market
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LETTERFROMTHEEDITOR In this edition I am pleased to begin this editorial by announcing that we are celebrating, as 2011 is the twentieth anniversary of the founding of ROTECNA. It was in 1991 when that we began our project in the pig-breeding sector. And 20 years later, we have managed to build a very competitive company, leader in pig-breeding innovation and which we have learned to export our projects all over the world. A figure: 70% of our turnover comes from sales outside our Spanish home territory. It was the farmers’ trust in us –at first Spanish farmers, then soon international ones- that helped to push forward at the beginning of our career. The company is proud of having contributed with our innovation to renewing a livestock sector and provide it with technology and professionalism over this time. Gener Romeu Rotecna's President
ROTECNA WORLD 12
And nobody can forget that globalisation and the technification of the livestock sector has contributed to the rise of emerging countries in pig production (like Brazil) and to enlarging the other established producers. Any livestock farmer, wherever he or she is, can obtain similar results nowadays, when the base is the desire to do a good job and the infrastructure is adequate. Although the sector is not going through its best moments, we have to believe that the good times will come back because our world, our people, will not stop eating animal protein. And we, producers and industry, have the obligation to produce the best pig protein, because that is what the consumer asks us for.
AUGUST 2011 EDITION: ROTECNA, S.A. EDITORIAL STAFF: MONTSE PALAU DESIGN: MONTSE GUERRERO
I want to include you in our twentieth anniversary, as without the support of the livestock farmer and the pig sector we wouldn’t have managed to make our place in this jungle. These 20 years fill us with satisfaction to make this trajectory a celebration. This evolution is the best starting point from which Rotecna can keep moving forward.
PRINT: IMPRENTA BARNOLA ISSN: L-41-2007 Rotecna's World's editors accept no liability for contributor's opinion
Congratulations to everyone! Gener Romeu
SUMMARY
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ROTECNANEWS
Rotecna celebrate their twentieth
anniversary
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ROTECNA, S.A. is celebrating. 2011 is the year of our twentieth anniversary. We have come a long way from that first Dutch type feeder produced to present ourselves, which still in our catalogue, one of the flagships that ROTECNA has always been proud of.
of over 100 products. “ROTECNA’s evolution over these 20 years fills us with satisfaction” states Gener Romeu, the company’s founder and alma mater, “and we consider it our starting point to continue our task for many years to come”.
ROTECNA has always been a leader in innovation, and due to this, its leitmotiv, even despite the ongoing crisis in the sector, is still “Number 1 in porcine innovation”. And the company has known how to put this slogan into practice, demonstrated by its catalogue
Outstanding among ROTECNA’s achievements over these 20 years of experience is the rapid internationalization of the company, nowadays present in over 70 countries. In fact, 70% of our turnover is thanks to export to the five continents, but with Europe as a
leading destination. This has been an important strategic axis for our company’s continuing growth. But obviously without forgetting the domestic market. Over these 20 years of history, in ROTECNA we have known how to adapt to the changing situations in the sector, with fluctuations that have sometimes forced us to “squeeze” our creativity and innovation even more. Despite these ups and downs of the market, “the human team at ROTECNA has been the indisputable motor to press forward”, says Gener Romeu. ROTECNA celebrated officially its 20 years of life at Fima Ganadera (Zaragoza, Spain) as we know best: presenting its new products for modern pig farming. And we keep celebrating our anniversary in following trade fair all around the world. Among the novelties, on one hand, a new business unit dedicated to liquid feeding was presented; with the EVOFEED® station, that has been conceived as the evolution of this type of feeding.
The general view of Rotecna’s headquarters in Agramunt.
On the other hand, ROTECNA also displayed the recent additions to its catalogue outstanding among
These 20 years of experience are the guarantee of a consolidated company, ROTECNA.
which are the Swing R3 family, the new Maxi Pan and Maxi Hooper Pan, as well as its heating panels. The stand at Fima was a clear reflection of the past, present and future of our company, with the whole range of products and a set of anecdotes about the company’s most memorable moments.
Rotecna celebrated its 20th anniversary in Fima Ganadera trade fair, in Zaragoza (Spain).
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RESEARCH&DEVELOPMENT
& international competition in Interregional
German piglet production
Gerhard Haxsen, Johann Heinrich von Thuenen-Institut
Nearly 20 % of the demand for piglets is met meanwhile by imports
The supply of piglets in Germany depends also on interregional and international trade. The role of the interregional and international trade with piglets is illustrated here by calculating regional supply balances. The results reveal a decreasing share of piglets produced in South Germany and an increasing
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share of piglets produced in East Germany, Denmark and the Netherlands. A comparison of the production costs and their determinants demonstrate advantages of Danish and Dutch sow farms due to better biological performance and economies of scale.
Introduction The supply of piglets in Germany is characterised by growing deficits, since the stock of fattening pigs in Germany expanded in the preceding years, while the sow stock declined. The deficits have been compensated by imports from Denmark and the Netherlands. In addition to the international trade with piglets, there is an interregional trade in Germany, because the regional distribution of the sows does not correspond to the distribution of the fattening pigs. The interregional and the international trade mean some risks in regard to the spread of epidemics and involve some problems for the requested coordination of piglet production and pig fattening (Schulte-WĂźlwer, 2008). But, there is a lack of quantitative information on the interregional trade with piglets. The problem is solved here by calculating piglet supply and piglet demand with reference to data of the regional pig stock.
pronounced reduction of the sow stock after 2007 caused increasing deficits. Comparing the development of the pig stocks in the three countries it becomes obvious that the supply of piglets in Denmark and the Netherlands expanded more than the domestic demand, while the domestic supply of piglets in Germany did not grow enough. Here, the growing demand needed to be completed more and more by imports from Denmark and the Netherlands (s. Figure 2). The German market is even important for the piglet exports of its neighbour countries; it takes approximately 50 % of the Dutch and 90 % of the Danish exports (Hoste, 2008). FIGURE 2: EXPORTS & IMPORTS OF PIGLETS IN GERMANY Mill. Piglets 10 Exports Imports Denmark Imports Netherlands
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Development of the pig stocks The stocks of sows and fattening pigs developed differently in Germany, Denmark and the Netherlands and induced nationally varying conditions for the supply with piglets (s. Figure 1). Denmark expanded the stock of fattening pigs as well as the sow stock until 2007. The stock of fattening pigs increased more after 2004, but declined after 2007 while the rising productivity in piglet production induced an expansion of piglet supply which profited by increasing sales opportunities in Germany and East Europe. The development in the Netherlands is characterised by a general decrease of the pig stock after 1998 due to several policy measures (Hoste, 2008). However, due to the rising productivity in piglet production the number of piglets decreased less than the stock of sows and of fattening pigs and recovered more after 2005. Germany’s sow stock has declined, while the stock of fattening pigs increased. The impacts of the decreasing sows on the supply of piglets have been nearly compensated by the increasing number of piglets weaned per sow annually. But, this increase was not large enough to meet the rising demand for fattening. The
4 2 0 2000 '01
'02
'03
'04
'05
'06
'07
'08 '09p
p= preliminary.
Source: SBA, ZMP, DMA, PVE; own calculation.
Calculation of regional surpluses and deficits Piglet supply and piglet demand vary from region to region especially in Germany. The variance is illustrated here by regional balance sheets calculating the supply by utilizing the data reflecting the regional stock of sows and the number of piglets weaned annually per sow, while the computation of the demand depends on the values of the regional stock of fattening pigs and on assumptions concerning the turnover of the fatteners per pig place per year. Map 1 shows results of the regional balance sheets for Germany as well as for the Netherlands and Denmark in 2009. It illustrates the concentration of deficits in
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RESEARCH&DEVELOPMENT North Germany and gives an insight into the distances between the surplus and the deficit regions. The deficits in the north cannot be balanced only by the surpluses of the southern and the eastern regions of Germany, they have also to be filled by imports from the Netherlands and Denmark. However, the map shows that the Dutch piglets produced mainly in the east of the Netherlands and exported to the German market have advantages due to the relatively short distance to the deficit regions in the Northwest Germany.
TABLE 1. CALCULATION OF INTERSTATE & INTERDISTRICT TRANSFER OF PIGLETS IN GERMANY 2007
Map 1: Regional surpluses and deficits of piglets in Denmark, Germany and the Netherlands 2009
Source: SBA, own calculation
1000 animals surpluses deficits
Federal state level Total surpluses Exports = Interstate transfers
3709 Total deficits
8588
900 - Imports
5779
2809 = Interstate transfers
2809
District level Total surpluses Exports = Interdistrict transfers
6220 Total deficits
11099
900 - Imports 5320 = Interdistrict transfers
5779 5320
Similarly it can be computed how many piglets have to be transferred at minimum from district to district. The total surpluses of the districts amount 2007 to 6.22 millions, taking into account the export of 900 000 piglets 5.32 millions have to be transferred at the level of the districts. Development of regional surpluses and deficits within Germany
The supply of piglets varies also from district to district within each federal state of Germany. With regard to the interest in information on the interregional trade a minimum amount of the trade can be computed on the basis of the results from the regional balance sheets. Table 1 demonstrates the procedure with reference to the data of 2007. Concerning the federal states the total surpluses amount to 3.709 millions piglets. Given the export of 900 thousand piglets 2.089 millions have to be transferred from federal state to federal state. The same amount results by subtracting the import of piglets (5.779 millions) from the sum of all deficits.
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The analysis of the regional supply and the demand for piglets must not be confined to only some years, but may consider a longer period similar to the period of the imports and exports considered above. Therefore, Figure 3 presents results of calculating the balance of piglet supply and demand in 2009 and 2001. It documents an impressive decrease of the surpluses in Baden Wurttemberg and Bavaria. On the other hand, all federal states in East Germany expanded their surpluses. But, this expansion has not been strong enough to compensate the decrease in South Germany. Further, the deficits in Schleswig-Holstein, Lower Saxony and North Rhine-Westphalia increased and resulted in an expansion of imports. Here the degree of self sufficiency has declined 2009 below 70 %, on the average for all Germany the degree is still above 80 %. In all, the development of the imports, exports, regional surpluses and deficits in Germany indicates a decrease of the interstate transfers. Figure 3 shows the decrease by illustrating the contribution of intraregional resources, imports and interstate trans-
FIGURE 3: DEMAND & SUPPLY OF PIGLETS IN THE NORTH, SOUTH, EAST & SOUTHWEST OF GERMANY Mill. Piglets 50 40 30
2,7 3,2 34,9
3,0 3,2 35,3
3,6 3,3 35,4
3,8 3,2 34,9
20
4,9
5,3
5,8
7,1
3,3
2,8
2,8
2,3
36,2
36,6
37,0
37,3
9,0 1,6 36,5
Imports Interregional supply Intraregional supply (1)
10 0 '01
'02
'03
'04
p= preliminary.
'05
'06
'07
'08
'09p
(1) Including piglets produced on farm.
Source: Own calculation.
fer to the total supply of piglets from 2001 to 2010. The share of imports has grown at the costs of interstate transfers. The intraregional resources still contribute the dominant portion of the piglet supply. But, the growing imports from Denmark and the Netherlands reflect an improved competitive position of the piglet production there. Advantages of piglet production in Denmark and the Netherlands The advantages of the Danish and the Dutch piglet production result mainly from a better biological performance and from the structural advantages of the bigger sow farms with their potential to deliver bigger, and even homogenous, batches of piglets and their cost advantages due to economies of scale. The size of the pig farms in Denmark and the Netherlands has been larger than in Germany for decades already. Meanwhile their average size is larger than in East Germany. Especially the Danish farms grew faster than the German. The bigger farms have less problems meeting the demand of the fattening farms for charges with more than 200 piglets from one producer guaranteeing a sufficient status of animal health (Poker, 2008). Further, they have lower production costs, because they utilize the degression of costs and realise a better biological performance in
piglet production. The number of piglets reared annually per sow in Denmark and the Netherlands exceeds the values in Germany. The cost advantages of Danish and Dutch piglet production become obvious by internationally comparable values of piglet production costs computed by InterPIG2, an informal network of agricultural economists from several countries. The InterPIG model computes costs of production for piglets with standardised weights referring to 25 kg or 30 kg respectively. The results for piglets with a standardised weight of 30 kg presented by Figure 6 illustrate the cost advantages of the Danish and the Dutch sow farms due to better biological performance and degression of fixed costs. There, the production costs per piglet are approximately 10 to 12 euros lower than the average in Germany. The cost advantage is reflected mainly by the lower level of labour costs and building costs. The production costs vary also from region to region within Germany, but the interregional differences are smaller than the differences to Denmark and the Netherlands. Also within Germany the cost per piglet are the lower the more piglets are weaned annually per sow. Conclusion Since pig fattening has a better competitive position than piglet production in Germany, the imports of piglets have grown. Nearly 20 % of the demand for piglets is met meanwhile by imports. On the other hand, there are also regions with surpluses. However, calculations of regional balance sheets indicate that the share of the trade with piglets between the federal states in the total supply has decreased; it is less than 5 %. The share of piglets from intraregional resources in the total supply is still dominant, but it has also decreased in favour of imports. Important disadvantages of the German piglet production result from less the favourable structure of the sow farms and higher production costs due to a lower level of biological performance.
9
SOMETHINGABOUT…
the9world heritage
Catalonia
marvels in
st climent taull © Bob_Masters
colonia guell © Bob_Masters
palau musica © Bob_Masters
arc bara © Bob_Masters
Pint rupestre_Cogul
Fundació Dieta Mediterrània.
1. ROCK PAINTING Man has always needed to express his worries and thoughts. The communities that lived approximately between 6000 and 1000 B.C. in the Mediterranean area of the Iberian Peninsula left us a legacy
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Poblet monestir © ASierra
Castellers © Carles Castro
patum © Albert Rumbo
There are 9 sites catalogues as World Heritage in Catalonia. The UNESCO recognises the exceptional nature of these elements of Catalan heritage considers them of great value for humanity.
of paintings as a sample of their civilisation. The rock art in the Mediterranean area of the Iberian Peninsula, declared World Heritage in 1998, includes 757 sites with rock paintings, of which 60 are in Catalonia. This makes it into the largest set of rock art in Europe. 2. TARRACO The city of Tarragona and its surroundings are evidence of the mark left by Rome in Catalonia. It
includes monuments ranging in time from the 3rd century B.C. to the 6th century A.D. conserved and that have survived in very good conditions. The archaeological ensemble of old Tarraco, a World Heritage since 2000, was founded as a Roman military camp with the aim of intercepting the Carthaginian armies which were attempting to cross the Pyrenees and attack Italy from, south of the Iberian Peninsula. Over time, Tarraco became a prosperous city and an administrative and political centre. 3. BOÍ VALLEY The Boí Valley is one of the best known parts of Catalonia because of its architectural the heritage. The most important are the nine very-well preserved rural churches that are considered a historical, architectural and artistic testimony from the medieval epoch, a Heritage site since 2000. Although the Arab occupation did not reach the valleys like Boí, the cultural influences brought by traders, monks and travellers did penetrate here. These people came from the other part of the Pyrenees, in search of the pilgrim route to Santiago de Compostela. Thus, the building of the Romanesque style churches began in the 11th and 12th centuries. 4. MONASTERY OF POBLET The abbey of Santa Maria de Poblet, founded in the 12th century, is one of the most important surviving monastic sites with a high artistic quality. As well as its religious and artistic significance, the monastery was a palace and a sumptuous royal pantheon where many kings lie. The monastery of Poblet, declared World Heritage in 1991, is perhaps the most important example of Cistercian architecture in the 12th to 14th centuries in Spain. It has a unique association of architectural forms and styles of great artistic value. 5. ANTONI GAUDÍ The work of Antoni Gaudí is the most important in modernist architecture. The Parc Güell, the Palau Güell and the Casa Milà in Barcelona were declared World Heritage in 1984. Later, in 2004, another five sites were added to make up a very representative set of the essence and work of Antoni Gaudí: the Casa Vicenç House, the Nativity facade and crypt of the
Sagrada Familia, the Casa Batlló and the crypt of the Colonia Güell. 6. MODERNISM The Palau de la Música and the Hospital de Sant Pau, works by the architect Lluís Domènech i Montaner, are two of the emblematic modernist buildings in Barcelona built in the early 20th century. The Palau de la Música Catalana was built in the centre of Barcelona between 1905 and 1908. The Hospital de la Santa Creu i de Sant Pau was begun in 1902 but not finished until 1927-1930, after the architect’s death. The two buildings were added to the Heritage list in 1997. 7. THE PATUM IN BERGA The Patum is the festival held during the week of Corpus in the town of Berga in Barcelona Province, A Heritage event since 2005, as a historical document and very relevant popular festivity. Its origins date back to the 14th century. It combines sacramental and historical aspects with popular culture, through the representation of symbolic characters, music and fire. 8. THE MEDITERRANEAN DIET A slice of bread with tomato and olive oil is a pleasure for the palate, but since November 2010 it is also part of the world’s Intangible Cultural Heritage, after the UNESCO included the Mediterranean diet to the list for preservation. The candidature was presented jointly by Spain, Greece, Italy and Morocco. The key to the Mediterranean diet is in the trident: bread, wine and oil, agreed by the Ibers, Celts, Greeks, Romans, Barbars and Arabs; although further enriched because it as an area much crossed by merchants and adventurers. 9. CASTELLERS (HUMAN CASTLES) There are 7,000 castellers throughout the Catalan lands (Catalonia, Northern Catalonia, Valencia and the Balearic Islands), in 60 groups and 16,000 castles built each year. These are the figures of the latest addition to World Heritage in 2010. These human castles are originally from the Tarragona area, and more specifically from Valls, where the practice arose. The oldest references to these human constructions are from the 18th century. The highest castell built to date reached ten storeys.
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TECHNOLOGY
TR-2 Feeder: 6 reasons for a
better choice
TR-2
The new TR-2 is a new concept of dry feeders for weaners. After the great success of the TR (4 and 5) dry weaner feeders, Rotecna has developed this new model for finishers. The farmer now has a choice. The range of feeders on the market with two feeding outlets was very limited. Now you can compare the performance and advantages of each. Apart from its price, we can mention 6 powerful reasons why the TR-2 is the most profitable option for your farm.
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1. EASY FOR 2 BIG ANIMALS AT THE SAME TIME • The V-shaped design of the feeding outlets makes access more comfortable, allowing two big pigs to eat at the same time without problems. • The tilt and height of the plate permit the animal put its head inside and reach the feed in a natural way.
2. EASY ADJUSTMENT EVEN IF THE FEEDER IS FULL (SANDWICH SLIDEGATE) • The exclusive design of the slitegate allows the feeder to be adjusted when it is full of feed. • The so-called “sandwich” system means that the shutter does not have any pressure from the feed as it does not have any direct contact with it, is protected by two sheets and slides smoothly between them. 3. BETTER FEED DROP
4. BETTER DURABILITY IN OPTIMUM CONDITIONS
• Its special design avoids feed accumulating and caking inside (especially mash), as well as makes the feed slide better inside. TR-2
• Totally made of plastic (high-density polypropylene) and stainless steel, that makes the feeder very resistant to wearing out from use by the animals and corrosive and oxidising agents (feed and water) for a long time.
5. HYGIENE AND DISINFECTION
6. OPTIMISING TRANSPORT AND MOUNTING
• The absence of corners and having feet on the base of the feeder makes it easier for the farmer to clean and disinfect it. • The lack of porosity in the material maintains hygiene and guarantees better disinfection.
• To optimise the transport space, the TR-2 is stacked and palletised.
TECHNICAL DETAILS: Nº animals for feeder
20-22
Animal live weight, kg
18-120
Feed Capacity, L.
120-130
Feeder height, cm
110
Feeder width, cm
60
Feeder depth, cm
40
Plate access, cm
16
Feeder outlets Outlet width, cm
110
19
16
2 55
Weight, kg
10.5
TRANSPORT Feeders per trailer
330
26
100x120x250 cm. View of the TR-2 palletised: 15 feeders per pallet.
26
40
60
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PIGPRODUCTIONIN‌
World pig production in the last 20 years
Taking advantage of Rotecna’s twentieth anniversary, in this edition we wish to review pig production over the last 20 years. Obviously, there has undeniably been an evolution, for various reasons and in different aspects. There have been changes in the production systems, new emerging producer countries have appeared that have varied the world panorama, new norms and agreements have been passed, etc. In short, nothing is what it was, at least in general terms. And we will also examine the outlook for the future. One of the most significant data is that number of pigs per farm has increased considerably in all the
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countries and there has been a greater regional concentration of production (Map 1). The mayor liberalization of trade that has reinforced the market tendencies has also been primordial, meaning that production has increased more slowly or even decreased in Europe and Asia, but has become more intensive everywhere. The great changes Improvements in techniques for production, feeding and handling have made considerable gains in production possible, especially in the large-scale operations and have thus become an incentive for the
Map 1. - World pig production density (2005)
increase to a larger scale. The technologies and economies on a large scale have allowed the industry to move forward together with the internal progress on the farms themselves. Another factor that has encouraged the development and the absorption of the productivity, making use of the technologies, has been the intense competitiveness in the meat market, and the long term fall in the real prices received by
the farmers, that is in turn due to the improvements in productivity. Despite this, it is true that all these changes have been clouded by the world economic crisis, which has meant a backward step for some, but a business opportunity for others. Purchasing power has dropped and with it the demand and this now has
Table 1. Total consumption total of pork meat at a world level (thousand MT) COUNTRIES China EU. USA Japan Russian Fed
2000 40,378 16,384 8,455 2,228 2,019
2001 41,829 16,554 8,389 2,268 2,076
2002 43,193 16,609 8,685 2,377 2,453
2003 45,054 16.665 8,816 2,331 2,417
2004 43,042 19.819 8,817 2,529 2,338
2005 45,139 19.638 8.660 2,509 2,486
2006 46,051 19.823 8.643 2,452 2,639
2007 42,726 21,364 8,965 2,473 2,803
2008 46,412 20,890 8,806 2,487 3,112
2009 48,300 20,492 8,925 2,494 2,954
Brazil Mexico South Korea Philippines Vietnam Canada Taiwan Ukraine Others TOTAL
1,827 1,252 1,058 1,038 1,190 1,003 975 623 5,707 81,321
1,919 1,298 1,158 1,085 1,244 1,068 977 606 4,901 82,454
1,975 1,349 1,199 1,137 1,386 966 967 544 5,153 86,287
1,957 1,423 1,286 1,167 1.583 973 934 544 5,229 90,149
1,979 1,556 1,336 1,169 1.731 1,023 948 609 4,588 91,181
1,949 1,556 1,311 1,198 1,855 993 944
2,191 1,538 1,420 1,239 1,880
2,260 1,523 1,502 1,275 1,894
2,390 1,605 1,519 1,270
2,478 1,664 1,415 1,267
928
926
945
958
4,703 93,186
4,992 95,164
5,105 94,409
5,967 98,276
6,873 99,714
Sources: USDA and the European Commission. Compiled: S.G. Productos Ganaderos
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PIGPRODUCTIONIN… other criteria. In general, the world meat market grew by 1% in 2009 according to the OECD and the FAO, much less than the growth in 2008, which was 2.4%.
Graph 1. - World consumption (%) of pork meat by countries in 2009 (thousand MT)
Pig protein is the most widely consumed animal protein in the world and naturally China heads the ranking (Table 1 and Graph 1). Top Ten in pig production China, The United States, Germany, Spain and Brazil head the list of the Top 10 in world pig production. The first two are the most fixed countries, given that there position has not changed in 20 years. China currently produces 50% of the world’s pigs, with over 49 million. And China, the United States and the European Union together cover 85% of world production, which shows the geographic atomization of the pig sector. The most important change over these last two decades has been Brazil. In 1991, it was not among the 20 leading countries and ten years later, it had risen to the fifth place, where it has remained until now, according to official FAO data. Vietnam is another of the emerging countries in recent times, entering the Top 10 in 2001. Among the countries that have dropped in the ranking, the loss of positions by Russia is notable. It went TABLE 2. Head of Pigs: world, 1991-2009 960 940
from third in the world in 1991 to twelfth in 2001, without great changes in 2008, when it had risen to eleventh. Naturally, the most obvious change if we compare the tables is the production in tons, which in many cases, such as China, almost doubled from 1991 to 2008, which shows the potential for raising production in some countries and the deterioration that others have suffered. China, the world’s great producer China is the world’s leading pig producer. Its 2010 production was 49 million pigs), more than in 2009 (48.8 millions) and than a decade earlier in 2000 when it was 35.5 million, according to the USDA (the United States Department of Agriculture). In 1990, while already the world leader, the figure was 25 million pigs. Given these figures, it is difficult for any other country to knock China off this eternal first position. Its total herd is expected to be 2011 668 million pigs in 2011.
Head (millions)
920 900
The USDA forecasts for China in this year indicate that the Asian giant will again increase production. Although the total stock of pigs in Chine fell at the beginning of the year, it is expected to rise, especially through the increase in the number of piglets per sow, partly thanks to the continual commercial expansion of Chinese farms. Better feed management made it possible to increase the survival of piglets.
880 860 840 820 800 780
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
760
Year
16
Source: FAO, September 2010.
On the other hand, it should be noted that in 2010 the weight of the animals at slaughter was higher
GRAPH 2.- World Pig Production Top 10 Position
Country
Production (TN)
Country
China
7.192.069
EUA
8.435.000
EUA
9.518.000
URSS
5.968.000
Germany
3.909.000
Germany
4.459.886
4
Germany
3.891.400
Spain
2.990.766
Spain
3.469.198
5
Poland
1.945.000
Brazil
2.637.337
Brazil
3.015.114
The Netherlands
1.880.600
France
2.321.000
Canada
2.838.425
7
France
1.860.000
Canada
2.177.260
Vietnam
2.470.159
8
Spain
1.829.271
Poland
1.849.000
France
2.230.000
9
Japan
1.483.164
Vietnam
1.824.270
Denmark
2.053.000
10
Denmark
1.271.900
Denmark
1.760.000
The Netherlands
2.019.735
2008
EUA
3
2001
41.637.977
Production (TN)
2
1991
China
Country
China
6
25.862.382
Production (TN)
1
47.177.631
Source: FAO
than expected because the producers were reluctant to sacrifice animals while waiting for better prices, especially during the first half of the year. Moreover, the subsidies for production were also withdrawn so that some small producers disappeared, together with the rise in the prices of the raw materials and the outbreaks of PRRS and foot and mouth disease. This will lead to a greater requirement for imports into China during this 2011. The consumption expected in China for 2011 is 52.7 million metric tons (MMT). An average consumption of 39 kg per person is expected, while the population of the country continues in crescendo.
TABLE 3. World Pig Production 2000-2011
Millions of tons of carcasses and millions of heads 1250
105
1100
90
1050
85
Head Carcasses
80
1000 950
c/ estimated in October 200 Source: FAO
2011c/
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
75 2000
Meat (millions Tn)
1150
95
Head (Millions Tn)
1200
100
Brazil, the emerging country par excellence Pig production in Brazil has grown strongly over the last six years. According to the Brazilian the association of meat producers and exporters, Abipecs, there are three reasons behind the improvement in productive data in Brazil: the increasing wealth of Brazilian consumers, a rise in its population and exports which are becoming ever more important. Two data: between 2004 and 2009 production increased 21.8% and its sacrifices by 27.6%. Over this period, industrial production increased by 36.7%, while more family-based production dropped by 34.1%, which indicates the fast process of professionalisation of Brazilian producers. Despite the fact that the most widely consumed meats in Brazil are chicken and beef, an increase has been achieved in demand for pork over these last five years. At any rate, a study by the Q-PorkChains in 2008 indicated that pork consumption is still low, in spite of the penetration of such products as sausages, ham, the salami or mortadella. Brazil represents 3% of world production and its exports are around 11% of the world total, according to Abipecs. The association’s 2009-2010 report emphasised that Brazil has managed to overcome it competitors in such aspects as the animal health barriers for trade, export subsidies in Europe or the great competitiveness en the sector. Between 2004 and 2009 its exports increased by 19%.
17
PIGPRODUCTIONIN‌
The United States and Europe, silver and bronze The second and third places on the podium of world pig production have followed parallel paths if we consider that they have known how to retain their positions. In the case of the United States, the second, it was the country with the highest growth in productivity per head during the first 8 years of the century, as, while the production of animals on the hoof grew by 14.2%, the production of meat on carcasses carne rose 23.2% between 2000 and 2008. As a result of the financial crisis, American meat production has fallen by 2.6% compared with 2008, but it is expected to recover in the next year and grow by 1.5%, again through productivity. In the case of the United States, according to the FAS USDA inventory of all herds carried out in March of this year, there were 64 million hogs. That means 1% more than last year, but 3% less than in 2009. The breeding stock, with 5.79 million animals, is slightly larger than last year, but also 1% less than in the previous quarter. The pig herd, with 28 million head, is also following the same path: 1% more than in 2010 and 2% less than in 2009.
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Regarding the third place of the European Union (EU), in 2010, European pig production recovered thanks to the fall in feed prices, the increase in demand for meat in Russia and Asia, and a weak euro. Following the increase in the production of piglets, sacrifices in the EU rose during the second half of 2010 and were expected to remain high throughout this first half of 2011. This high level of slaughters and the case of the dioxins in Germany have led to oversupply, part of which could end up in the export channels. In the second half of 2011, it is forecast that the EU will have a lower number of piglets. Many producers currently are not earning a good production margin because of the cost of feed. Moreover, we must remember that in 2013 all farms must comply with the normative on animal welfare, which that could lead to many producers going out of the business. A look to the future According to the forecast by the USDA Foreign Agricultural Service in April 2011, world pork production will grow slightly. The American institution has raised its estimate for production in the European Union, but the forecasts
for the Union outline falling production bearing in mind the number of farmers who will abandon and the fall in livestock numbers in the United Kingdom. With regard to Russia, the increase in raw material prices and the limited availability of feed at the end of 2010 reduce the expansion previously envisaged. In Asia, China predicts a slight growth through better prices and the increase in demand that encourages the ever more demanding producers to produce more. An outstanding case is South Korea, whose production will be a third lower (the lowest in the last 20 years) due to an outbreak of foot and mouth. The sacrifice of 30% of the livestock and the 2 to 3-month wait before restocking will reduce the herds although only temporarily. With regard to United States, the forecast is for a slight rise thanks to greater slaughter of animals. If we look at the USDA forecast, future imports will vary slightly. On one hand, South Korea will have to import more than envisaged due to the lack of domestic production. The Korean government has stated that it will create a special duty-free tariff for frozen pieces. Despite this, it is expected that pork consumption will decrease. And on the other hand,
China will continue to increase its imports of pork as will Ukraine, which is seeing a rise in its demand. On the question of exports, the forecast states that these will grow in the EU given the demand from Asia and Russia. And in the case of the USA, these are also expected to rise from the demands of South Korea and China. Regarding the prices of pork meat, both the OECD and the FAO state that these will not rise until at least 2015 in either the Pacific or Atlantic areas, due to the increase in supply from Brazil, the United States and China, that are experiencing an increase in production.
Bibliography: “El sector porcino: agricultura, comercio y medio ambiente”, OECD 2003. www.wattagnet.com Foreign Agricultural Service USDA FAO OECD NASS Abipecs “Panorama Agroalimentario. Cadena Porcino 20102011”, FIRA.
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FUTURE
Raw materials futures Market
Over the last 3 years, if one has to seek a production cost that has provoked a stir in the pig-breeding sector, this has been the price of raw materials. Nobody can forget the importance of the influence of the forecasts for the harvests of cereals, oilseeds and other raw materials on the price of feed. Animal feed represents 60% of the cost in pig production (Leo DenHartog, 2011) in most producing countries, although there are differences. According to a 2009 study of production costs by the Inter PIG network that includes a group of international economists, the average cost of the pig production in Spain is 1.70 Euros/kg of pig bred; in Germany, it is 1.50 euros; in Ireland and the United Kingdom, 1.42 euros; and 1.40 euros in Sweden, the Netherlands and Denmark. Spain is also at the
20
head of the ranking of countries where the price of feed pushes up the final cost. In this case, it represents almost 1.10 euros/ kg of pig in the slaughterhouse. The International Grains Council (IGC) in London publishes its futures forecasts every month, and complements these with the most notable events of the recent weeks. Although, obviously, these are forecasts and can vary depending on the climate or speculation, among other factors. Latest events The report published by the IGC at the end of June explains that wheat and coarse grains markets staged another dramatic reversal in June, price falls triggered by substantial fund selling in the major
The raw materials prices influence directly to the costs production.
exchanges in response to a mix of factors. These included declines in some other commodities, notably crude oil, global economic concerns linked to the Greek debt crisis and, not least, a seasonal trend as northern hemisphere harvests accelerated. Official US data on 30 June indicating a larger than expected maize area, and bigger than anticipated stocks of maize, soyabeans and wheat, initially prompted a further sell-off in futures. While global stocks projections are lifted, the world grain situation is expected to remain tight in 2011/12. The steepest drop was in wheat, especially for medium and lower grades, export values of which dipped by as much as 20%. This followed successful harvests in south Asia, rains in drought-affected parts of Europe, and the increased availability of wheat in the Black Sea region where export controls were eased as crop prospects improved. However, premiums for top quality and especially durum wheats widened, reflecting the adverse spring planting conditions in North America. Maize prices also registered sharp declines, but only after setting new highs in early June on US crop wor-
ries, with new data showing plantings would fall short of earlier forecasts. This was followed by a substantial sell-off in Chicago futures, largely triggered by Greek debt concerns but also due to a subsequent improvement in weather conditions, declines in other grains and crude oil and indications of weakening support among US legislators for the ethanol tax credit and import tariff. Larger than anticipated official US plantings and stocks figures on 30 June triggered a further wave of selling activity. Prices of soyabeans also succumbed to the more bearish market sentiment, but a combination of US crop concerns and continued heavy demand from China preventing a steeper decline. In contrast to wheat and coarse grains, rice prices displayed mixed trends: Thai values of 100% B posted a significant net increase in June, while prices in Vietnam weakened and rough rice futures in the US fell heavily. Demand for grain 2010-2011 An increase of some 5 million tons was forecast for harvests in some countries for 2010/11 but most of this will be absorbed even more than expected. It is
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FUTURE expected that world grain consumption will rise by 1.7%, to 1,791 million tons. Industrial use will be 2m tons higher than in March, and will reach 293 m (275 m), after the increase in US use of maize for ethanol. The reserves of the eight leading exporters at the end of the 2010/11 season will be some 108m tons, that is, a third lower than the previous year and the lowest since 2003/04. It is expected that the global grain trade in 2010/11 (July/June) will rise to 243m tons (240m), unchanged from the last month, with reductions expected in wheat and barley, to a great extent due to the lower imports expected from Russia, balanced by the higher maize output from the European Union and China. In wheat, the increase in the crop estimated in April for the 2010/11 season and a forecast increase in the opening of the stocks is partly compensated for by greater use, leaving the estimate for world stocks at the end of the year only slightly above the March GMR. However, the concerns are still about the fall in the supply of high protein milled wheat. World trade in wheat was lower in March-April, at 122m tons (128m), due to lower purchases from Russia. In maize, although the world harvest for 2010/11 is forecast to be good, the totals are expected to fall 0.8%, the first inter-annual drop since 2002/03. Demand seems to have been little affected by the large price rise, remaining strong in both the food and industrial sectors. Thus, it is expected that the rest will be strengthened considerably, including a 60% drop in
the United States. The forecast for world trade is an increase of 96m tons, the highest in the last three years, backed by greater shipments to the European Union, China and North Africa. Outlook for 2011/2012 While the overall supply and demand outlook for grains in 2011/12 has eased somewhat since the IGC’s special 6 June Update, as indicated by a higher than previously projected level of global carryover stocks, the situation will remain tight. Changes include higher than anticipated carry-in stocks of wheat in Russia and an increased US maize crop forecast. There are also sizeable upward adjustments in the production and consumption figures for China stemming from the latest official crop data. The production forecast is raised by 17m. tons, to 1,808m. (1,747m.), mostly due to revisions for China’s wheat and maize crops, commensurate with new 2010 data. Although there are reduced crop forecasts for the EU (wheat and barley), the production outlook in the US, south Asia and the CIS improved in June. In all, the global grains area is forecast to expand by 2.1%, returning it to 2008/09 and 2009/10 totals after last year’s sharp decline in the CIS. Consumption of grains is projected to rise by 1.4%, to 1,821m. tons, similar to the past year’s increase. However, a much smaller increase in industrial use (6m. tons) is forecast compared with that estimated for this year (17m.). This assumes that the use of maize for fuel
EXPORT PRICE
300
500
500
280
280
480
480 460 440
03-Mar
29-Juny
09-Juny
20-May
02-May
12-April
23-Marc
03-Mar
29-Juny
09-Juny
440
20-May
240 02-May
240 12-April
260 23-Marc
260
460
29-Juny
300
09-Juny
520
12-April
320
23-Marc
320
03-Mar
540
520
29-Juny
540
340
09-Juny
360
340
20-May
360
02-May
560 US soyabeans
20-May
SOYABEANS
560 THAI 100%
12-April
US SRW
580
380 US CORN
03-Mar
22
EU (france)
RICE
580
23-Marc
380 US HRW
MAIZE
400
02-May
WHEAT
400
ethanol in the US, estimated this year at 127m. tons, will stay the same in 2011/12 after a period of exponential growth, with ethanol output already having reached mandated levels. However, much will depend on upcoming US legislation on next year’s blending credit as well as price relationships between maize and crude oil. Feed use of grains is expected to increase by 12m. tons, to 764m., mainly in China and Europe. While the forecast rise in world production will exceed the projected increase in consumption, the WORLD ESTIMATES Millions Tons 07/08
08/09
10/11 09/10 est
11/12 fortecast 06.06
30.06
WHEAT Production
609
686
679
650
663
666
Trade
110
137
128
122
128
126
Consumption
605
644
652
660
667
670
Carryover stocks
131
172
199
189
182
185
year/year change
+4
+41
+27
-10
Major exporters (a)
48
69
76
67
58
61
Production
796
799
821
825
843
858
Trade
101
84
86
94
93
93
Consumption
779
784
822
849
850
861
Carryover stocks
132
147
146
122
114
119
year/year change
+17
+15
-1
-24
-4
MAIZE (CORN)
A modest increase in grains trade is expected in 2011/12 although, at 243m. tons (240m.), the forecast is 2m. smaller than before. This reflects improved wheat crop prospects in parts of North Africa, especially Morocco, and a reduction in imports of barley by Saudi Arabia. Compared with the year ending June 2011, nearly all regions are likely to see modest increases in grain imports, with milling and feed wheat buying expected to register the biggest rises. Total wheat imports are set to climb by nearly 5m. tons, to 126.4m., but trade in maize, barley, and sorghum will likely fall slightly. After declining by some 29m. tons in the past year, exports from the Black Sea region are expected to rebound, although shipments from Russia are forecast to remain well below their 2008/09 and 2009/10 peaks. In contrast, grain exports by the EU are forecast to fall by as much as one-third, reflecting this year’s unchanged harvest and low carry-in stocks. Estimated world trade (April 2011) ALL GRAINS: Total Trade Mill. Piglets 250
-3
TOTAL GRAINS* Trade Consumption
1698 1802 1800 1747 1791 1808 240
250
240
240
245
243
1679 1734 1770 1795 1807 1821
Carryover stocks
301
369
399
352
year/year change
+20
+68
+30
-47
Major exporters (a)
123
158
168
121
333
339
100
113
101,1
83,6
110,8
110,3
136,7
25,4
86,4
95,5
127,9
122,4
other maize all wheat
50
(a) Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine, United States * Wheat and coarse grains
outlook is still for a further dip in global carryover stocks in 2011/12, placed at 339m. tons (352m.). The total for the major eight exporters is projected at 113m. tons (121m.), 8m. higher than before after upward revisions to the carry-in figures for Russia and the US, but still the smallest ending stocks since 2003/04.
87,3
26,0
150
-13 105
29,1
200 Millions Tons
Production
28,0 23,5
0 '06/07
07/08
08/09
09/10
10/11
The International Grains Council (IGC) is an intergovernmental organisation related to the cereals trade. It administers the Grain Trade Convention, 1995. The Secretariat of the IGC, based in London since 1949, provides administrative services to the Food Aid Committee (FAC), created under the Food Aid Convention, 1999. NOTE: The numbers between brackets reflect the latest forecast or data.
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