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Market Intel Weekly Nugget

Red Alert: The Razor's Edge of Pork Production Amid Global Economic Shocks and Disease Outbreaks

1. Global Economic and Agricultural Policies Impacting Pork Production:

• The Chinese Communist Party's emphasis on food security and agricultural productivity, aiming to maintain or increase grain production, which indirectly impacts pork production as grains are a primary feed source. 

• This focus can influence global grain and feed prices, affecting pork production costs.

2. Spanish Pork Market Dynamics: 

• There are specific price movements within the Spanish pork market, noting slight increases in prices due to various market dynamics, including demand fluctuations and comparisons with pork prices and production in Germany and France. 

• Market pricing and consumption patterns are influenced due to the anticipation of holiday seasons

3. European Pork Market Trends: Production adjustments, disease outbreaks, slaughter weights and export market changes are influencing the supply and price of pork across Europe.

👉️ Production rate:

1. Adjustments in Production: European pork producers have been adjusting their production in response to various challenges, including fluctuating feed prices, environmental regulations, and market demands. 

   This has led to reduced production as farmers adapt to new conditions or shut down the company due to low profitability.

2. Impact of African Swine Fever (ASF): ASF outbreaks in several European countries have had a significant impact in pork production. This is a direct impact in reduction of pig slaughtering supply and production declines in specific regions.

👉️ Slaughter Weight:

• Increase in Slaughter Weights: Due to the market changing conditions, there has been a trend towards heavier slaughter weights. This is partly due to the producers trying to maximize returns from each animal in the middle of price and feed costs fluctuations.

• Impact on Supply and Pricing: To have heavier slaughtering weights contribute to an increase in pork supply, which can put some pressure on price if demand doesn’t keep pace. However, the quality and market preference for pork cuts can also influence how this additional supply affects the market.

👉️Export Dynamics:

• Shift in Export Markets: European pork industry relies heavily on China. Changes in demand from China leads to fluctuation in European pork exports.

• Diversification of Markets: European producers really want to diversify their exports beyond China, and they do target different markets such as other Asian markets, Sud America, Within Europe. They try hard to mitigate the whole that the lack of demand from China leaves and make the European export market tremble.

5. International Markets:

👉️Price:

• The markets that have been affected by ASD, may experience higher prices due to reduced supply, while other countries with stable production levels may have lower or more stable prices.

• Impact of Trade Agreements and Tariffs: Countries with favorable trade agreements may enjoy better access to export markets , therefore higher price points do increase demand.

👉️Production trends:

• Adjustments Due to the Disease

• Technological Advancements and Efficiency Improvements: Different regions are adopting advanced farming technologies and practices to improve production efficiency and sustainability. These advancements can lead to increased production and competitiveness in the global markets.

👉️Export/Import Dynamics:

• China’s role as a Major importer: China can shift export dynamics. Can reduce import demand and then affect exporters in Europe and America and South America.

• Diversification of Export Markets: diversify export markets beyond traditional destinations. The strategy is to mitigate the risks associated with the dependency on a single market and trying to capitalize on emerging opportunities.

6. Pork Consumption and Export Trends: 

Europe’s special focused on China and China’s decreased demand is affecting the global pork trade. This part accentuate the importance of export markets for European pork producers and the impact of global demand fluctuations on local prices.

7. Impact of Weather and Seasonal Consumption: 

Weather conditions and seasonal changes significantly influence pork consumption, with demand typically increasing during colder months and holiday seasons. Extreme weather can impact production by affecting feed grain availability and pork supply chains, leading to price fluctuations. These dynamics accentuate the need for producers and retailers to adapt to seasonal trends and unpredictable weather events to meet consumer demand efficiently and maintain market stability.

ASF: AFRICAN SWINE FEVER. THE MOST LETAL PIG DISEASE IN THE HISTORY

African Swine Fever (ASF) is a highly contagious and deadly viral disease affecting both domestic and wild pigs. It's caused by a virus of the Asfarviridae family, which can spread through direct contact with infected animals, their bodily fluids, or indirectly through contaminated feed, materials, and even ticks that act as vectors. Unlike swine flu, ASF doesn't pose a threat to human health; however, its impact on the swine industry can be devastating.

2018 was the last outbreak of ASF and I did a seminar in Seoul Global Center together with the ICEX Spain in Seoul (South Korea) about Pig and I explained about the ASF. I discovered that this is something that traders we should know about so that we can understand and make our customers to understand the severity and how series affect the supply and its impact in the long term.

KEY CHARACTERISTICS OF ASF:

• High Mortality Rates: ASF can cause death in pigs within days of infection, with mortality rates nearing 100% in acute forms of the disease.

• No Vaccine or Treatment: Currently, there's no available vaccine or specific treatment for ASF, making prevention and control measures critical to managing its spread.

• Wide Range of Clinical Signs: Symptoms may vary from high fever, loss of appetite, hemorrhages on the skin and internal organs, to acute death. Subacute and chronic forms of the disease can present milder symptoms, making detection harder.

• Economic and Social Impact: Outbreaks can lead to significant economic losses due to pig mortality, culling of infected or exposed animals, trade restrictions, and increased costs for biosecurity measures. The social impact, especially in regions where pig farming is a major livelihood activity, can be profound.

TRANSMISSION AND SPREAD?

• Direct Contact: Transmission can occur through direct contact with infected animals or with wild boars.

• Indirect Contact: Contaminated feed, equipment, vehicles, clothing, and any material that can harbor the virus can spread the disease.

• Vectors: Certain tick species can carry and transmit ASF virus.

PREVENTION AND CONTROL:

• Biosecurity Measures: Implementing strict biosecurity protocols is crucial. This includes controlling access to pig farms, disinfecting vehicles and equipment, and ensuring feed is not contaminated.

• Surveillance and Reporting: Early detection through surveillance and prompt reporting of suspected cases to authorities can help contain outbreaks.

• Safe Trade Practices: Only importing pork and pork products from ASF-free countries or regions, following international guidelines to ensure safety.

• Wild Boar Management: In areas where wild boars are present, managing their populations and preventing contact with domestic pigs can reduce the risk of spread.

• Public Awareness and Education: Informing farmers, veterinarians, and the public about ASF and its prevention is essential for its control.

WHAT ARE THE SYMPTOMS FOR PIGS WITH ASF?

The symptoms of African Swine Fever (ASF) in pigs include:

• High fever (40-42°C)

• Loss of appetite

• Depression

• Weakness and difficulty standing

• Red or blue blotches on the skin, particularly around the ears and snout

• Vomiting

• Diarrhea, often with bloody discharge

• Coughing or difficulty breathing

• Miscarriage, abortions, stillbirths, and weak litters in sow barns

• High mortality rates, with a significant proportion of infected animals dying within 10 days

These symptoms are crucial indicators of ASF infection in pigs, and prompt reporting to a veterinarian or animal health officials for testing and investigation is essential for early detection and prevention of the spread of this devastating disease.

The symptoms are quite similar between ASF and CSF. CSF is Classical Swine Fever disease which is less mortal than the ASF.

The mortality rate of ASF can approach 100%. It is the most severe form of disease. 

The pigs that are infected with ASF, will likely die within 10 days. Pigs infected with ASF can shed the virus for up to 6 months if they survive the infection.

On the other hand, the CSF, the mortality rate can be significant and specially in the acute form of the disease, but lower than ASF. Depends on the severity of the infection and the specific circumstances of the outbreak.

The last outbreak of ASF was in 2018. It affected more than 50 countries.

Let me share with you the status of 9 countries:

1. Indonesia: An outbreak in North Sumatra was confirmed, making it the 11th country in the region to be affected.

2. California, USA: Smuggled food products from China were found, indicating a risk of ASF spread.

3. Nigeria: Reported the largest ASF outbreak in the last 12 years.

4. Poland: 450 farms in Greater Poland were placed under lockdown due to ASF.

5. China: Continues to face new ASF outbreaks, with authorities noting an increased risk as farmers rush to rebuild their herds.

6. India: Reported its first ASF outbreak in Assam, where over 2500 pigs died across 306 villages.

7. Singapore: Detected its first ASF outbreak.

8. Thailand: Confirmed ASF cases in pet pigs in Bangkok and reported a total of 114 outbreaks in various provinces.

9. Myanmar: Confirmed multiple ASF outbreaks since the first case in August 2019.

RESOURCE: ASF INTERACTIVE MAP

The link below shows a interactive map with ASF locations pinned on it.

For example, right now when I open the map and I zoom in to South Korea, near Gimpo City and near Seoul there was a notification info for ASF on 2019-09-25.

Which are do you wanna check? Click the interactive map and see your region or country!

BUSINESS CORNER

The 7 Questions that Every Meat Supplier & Traders Should Ask to Their Prospects!

CLIENT ENGAGEMENT ROADMAP

We all need to ask to our prospects as much as we can in order to get a glance of what they need and short the negotiation before the closing. Right?

Many times we ask the wrong and standard questions that doesn’t shed light the differentiation of our product. Yes, I know! most of the times we handle commodities…. Surprisingly, we traders try very hard to decommoditize a commodity.

Phase 1: Understanding Global Needs: Begin with a broad understanding of the importer's market demands preferences and current trends that they are noticing in the market.

Key Questions: What flavors or types of meat are your customers currently excited about? or Could you share insights on consumer preferences in your market regarding meat products?

Phase 2: Evaluating Past Experiences: Learn from previous interactions to refine the supply process.

Key Questions: Was there a particular order (shipment) that worked out really well for you, or one that didn’t meet expectations? Why? or How have our previous shipments aligned with your expectations, and how can we enhance our service? If they are a customer already.

Phase 3: Anticipating Future Trends: Get ahead of market trends and plan for future demands.

Key Question: Are there any emerging trends in your market we should prepare for together? or How do you foresee your meat product needs evolving in the next 12-24 months, and how can we assist in planning and adapting to these changes together?

Phase 4: Addressing Unique Requirements: Understand specific needs that can set both parties up for success.

Key Question: What’s a must-have for you when working with an overseas supplier? or What unique attributes or services do you look for in a meat supplier that you believe would significantly differentiate your offerings to your customers? or Do you have any specific custom requests or requirements for the meat products we supply, such as particular cuts, aging, or packaging?

Phase 5: Streamlining Processes: Find efficiencies in logistics, communication, and transaction processes.

Key Question: Is there a part of the import process we can make easier for you? or Can we explore any potential operational synergies between our businesses, such as logistics optimization to enhance efficiency and reduce time (or costs, x, y or z)?

Phase 6: Leveraging Market Insights: Align offerings with both current and upcoming market demands.

Key Question: What insights can you share about your local market that might help us serve you better? or Are there specific market trends or consumer preferences you are aiming to capitalize on, and how can we support you in this endeavor with our products or market intelligence?

Phase 7: Strategic Growth Planning: Collaborate on long-term strategies for mutual growth.

Key Question: Looking ahead, how do you see our partnership evolving to support your expansion or diversification plans? or How can we align our products to support your strategic goals and explore these new avenues together? or What are your expected long-term goals regarding our partnership?

With this information you cannot only target a customized offer that will have less friction during the negotiation, but you will also be able to check the current status of your potential business and how to build a strategy for short-term and long-term.

Did you know…?🔍

Why Wagyu is so Highly Priced and Expensive?

Wagyu beef, originating from Japan, is renowned for its extraordinary marbling, which gives the meat its luxurious taste and buttery texture. The meticulous care given to Wagyu cattle, including special diets and stress-reducing techniques, contributes to the meat's superior quality and high price.

Genetics: Wagyu literally means "Japanese cow" and refers to several breeds that are genetically predisposed to intense marbling. The four main breeds are Japanese Black, Japanese Brown, Japanese Polled, and Japanese Shorthorn.

Quality Grades: Wagyu beef is graded on a scale that measures its yield (A, B, or C) and the quality of meat (1-5), with A5 being the highest grade possible. This grade considers factors such as marbling, meat color and brightness, firmness and texture, and fat color, luster, and quality.

Raising Techniques: Wagyu cattle are raised with extraordinary care. They are often given beer to stimulate their appetite, especially in the summer when they might be less inclined to eat. Additionally, some farmers massage their cattle to promote muscle relaxation and better distribution of fat, although this practice is more about tradition and care than necessity.

Geographical Influence: The quality of Wagyu beef is also influenced by the region it comes from, similar to how wines are influenced by their terroir. For example, Kobe beef, which is a type of Wagyu, comes from the Tajima strain of Japanese Black cattle raised in Hyogo Prefecture, Japan.

The same goes for Toryama Wagyu that comes from Gunma Prefecture.

Diet: The diet of Wagyu cattle includes a mix of grains, grass, and in some cases, even sake or beer mash. This special diet helps to increase the intramuscular fat cells, which contribute to the marbling effect.

Marbling and Health Benefits: The marbling in Wagyu beef is not just about taste; it's also healthier. The fat in Wagyu beef is more monounsaturated and contains higher levels of Omega-3 and Omega-6 fatty acids compared to other beef. This composition makes it a healthier option, contributing to its appeal.

Limited Supply: The rigorous standards for raising Wagyu cattle, combined with the time it takes for them to mature, means that Wagyu beef has a limited supply.

Culinary Flexibility: Despite its rich flavor and texture, Wagyu beef is surprisingly versatile in culinary applications. It can be enjoyed in various ways, from steaks and roasts to thinly sliced for Japanese dishes like sukiyaki and shabu-shabu.

In next newsletter I will explain you much more about Wagyu and how much we learn in the Wagyu Academy before we deep dive into the Wagyu World with Toriyama (Wagyu Brand from Gunma Prefecture).

Still a Iberico Lady but as we mention in this Newsletter, we need to diversify, right? 😉 

One last thing…

If you are aiming to strengthen your business foothold in the APAC Market in this areas:

• Market Expansion and helping with client Acquisition

• New Market Fit with product/specification development

• Sales Growth and Price Optimization with Market Intel

• Sales Training and objection ideation to gain new clients

There are 3 ways that Meat Trading Hub (MTH) can help you:

✅Your Supply and Purchasing Advisor - 1:1

✅I create win-win partnerships between you and strategic importers and/ or suppliers

✅On-line and off-line Training sessions to elevate your Global sales team

Schedule a discovery call. Though times are coming and we all need to source and sell with better margins, right?

…or Join our WhatsApp Group for more news and insights!