Quarterly Newsletter for Pigs Suppliers

Issue 7 4th Qr/2018

Pig head count and production in Poland - changes and challenges.

In the last ten years there is a trend of pork meatiness increase. And this is clearly visible if we compare 2009 to 2018 data.

credits to - data of the Ministry of Agriculture and Rural Development

The hard working of Polish breeders to improve meatiness is successful. They generated over 3% growth. This result is even more astonishing if we consider the fact that the post slaughter weight has been increased by over 5kg. We enjoy these positive results thanks to the development of Polish pig production on one hand, and the changes in the production structure of pigs in Poland. The number of households breeding pigs is reducing and at the same time we have an increase in the average number of hogs in a farm. It means that small farms breeding from few hogs are closing. So, at the beginning of this milenium we had more farms producing different products. In recent years, however, farmers started to specialise in one discipline. And as a result we have more effective production and quality of livestock. The recent years of reduction of number of farms is also due to the outburst and spread of ASF. This is very visible in the east of our country, where the virus is present in all regions and both in wild boars and pigs. That is why, famers facing troubles selling their livestock or the demand to pay lots of money to keep up with the biosecurity requirements decide to stop

2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

Meat%

HCW kg

Meat%

HCW kg

Meat%

HCW kg

Meat %

HCW kg

Meat%

HCW kg

Meat%

HCW kg

Meat%

HCW kg

Meat%

HCW kg

Meat%

HCW kg

Meat%

HCW kg

POLAND

57,9 94,5 57,6 93,5 57,1 92,3 56,9 92,5 56,9 91,6 56,8 90,5 56,6 90,0 55,4 87,5 54,8 88,7 54,6 88,5

NORTH

58,0 93,1 57,8 92,5 57,5 91,8 57,2 91,7 57,3 90,2 57,3 88,9 57,0 88,5 55,4 86,6 54,7 87,5 54,5 87,0

CENTRAL-EAST

57,7 95,1 57,3 93,9 56,5 92,4 56,5 92,5 56,6 92,4 56,2 91,2 56,3 90,3 55,4 87,8 54,6 89,3 54,6 89,4

SOUTH-EAST

58,0 94,7 57,8 93,8 57,6 92,9 57,4 93,0 57,4 91,4 57,3 90,5 57,0 90,2 55,8 87,7 55,3 89,0 54,7 89,2

WEST

57,8 94,6 57,7 93,7 57,3 92,1 57,0 92,5 56,8 91,4 56,9 90,5 56,7 90,4 55,2 87,9 54,7 89,0 54,5 88,8

or suspend their pork operation. Those areas require serious support by means of different subsidiary programs so we would be able to use safely their production potential. If we do not provide that support we may lose significant production potential of the breeders who do have the knowledge and experience in pig production.

Households count [,000] av. head count/farm

! Credits to KZP-PTCH

Moreover, despite the reducing number of farms breeding pigs, the slaughter in Poland is growing. See data below:

MM heads

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If we analyse the data we can ourselves, how it is possible? Does the production effectiveness of present operating pig farms go so high that it compensates far more the livestock production from closed farms? The fact of increasing number of slaughter in Poland is even more surprising given the unsatisfactory change of sows head count.

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If we consider that the breeding in Poland would base only on the farmer’s own mother herd, the annual production of hogs from a single sow would be 26 heads. It is a very good result. Unfortunately, the reality is different. Polish farmers are improving their results but the slaughter growth is mainly due to weaners imported to Poland. In the last years we note more high results. See data below:

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The biggest number of weaners ca. 90% comes from Denmark. Personally, I am of the opinion, this is not beneficial to our Polish production for several reasons:

1. Production using imported weaners is most risky from economical perspective. In case of low livestock prices (and this is what we can see for the past year) hog producers using those weaners would be the first to suffer from the losses.

2. This production model can easily cause oversupply of hogs thus lead to sudden drop fo their prices (see point 1) and breaks in weaners availability can cause stoppages in production, which mean losses the farmer faces in terms of the fixed costs of a farm (naturally, smaller number of adequate hogs on the market, can cause price increase, but farmers would not make use of it since they would not have any hogs to sell).

3. Production safety – (the most difficult one) if we ask a hypothetical question, what would have happened, if Denmark plus other exporters imposed strict restrictions in importing weaners to Poland, which could mean an import blockade due to ASF?

Concluding, I think that current actions of our government and pig sector should rather turn into establishing two production schemes:

1. Farms in a lock cycle and their production level could allow for production costs optimisation and provide good money for families operating the farms. I think that the annual sale from such a farm would be 1000 heads.

MM heads

2. Commercial hog production in Poland for the already existing facilities. Assuming that, the domestically produced weaners, of similar quality as the imported, would be sold at a price similar as the imported ones. It still means that the price of our local weaners would be lower by transportation costs at least. The question is, what should be the production size? In this system, a farm should produce minimum 600 - 700 weaners per week. That number would correspond with the needs of the open cycle farmers.

We are present on the market and we are assessed by the market that is why our organisation feels responsible for the situation in production. Thus we provide an active support to any initiative promoting the growth of our domestic sector of hog production.

Piotr Kowalski Livestock Procurement Managing Director

Africain Swine Fever (ASF) – – current standing in Poland

! Credits: http://www.wetgiw.gov.pl/

Considering the present epizootic standing i.e. ASF still spreads fast among wild boars in Poland (the central part of our country), Poland was forced to change the scope of restricted zones and some of the regulations on monitoring and counteracting ASF. So, as a consequence the Minister of Agriculture and Rural Development, on January 1, 2019 enforced a draft regulation on launching on the territory of the Republic of Poland in 2019 ”The program of early detection of infections of the ASF virus and educating and fighting the disease”.

The program comprises following actions:

1) laboratory tests on ASF in the territory of the Republic of Poland; 2) purchase of cooling containers to store carcasses of shot wild boars and hook scales; 3) financing catching stations of life boars;

Map of ASF outbursts and incidents in Poland and current scope of restricted zones

DETECTED ASF OUTBURSTS

YEAR WILD BOARS PIGS

as per: February 21, 2019

4) compensate for emergency shooting of wild boars in the protection, restricted and hazard and WAMTA zones plus any other zones where this type of operations are performed; 5) financing hunting for wild boars on protection, restricted, hazard and WAMTA zones; 6) slaughtering or killing of pigs in the hazard, restricted or protection zones in case the virus is detected in wild boars in those zones; 7) procedures of the district veterinarian upon received notification on suspected ASF case; 8) sampling for ASF laboratory tests or controlling farms with respect to biosecurity requirements performed by the district veterinarian in the protection, restricted and hazard zones; 9) disposal of carcasses or remainings of dead wild boars after the hunting in the restricted or hazard zones, which were not handled by the hunters; 10) disposal of carcasses of wild boars which cannot be handled by the hunters in the protection, restricted and hazard zones; 11) paying for any notification in case of found dead wild boars in Poland; 12) co-financing of safe disposal of dead wild boars from protection, restricted and hazard zones; 13) enforcing biosecurity measures on the roads at border crossings with Russian Federation, Belarus and Ukraine; 14) co-financing catching and killing of wild boars; 15) perform information campaign by the Veterinary Inspection.

If we obey by the program, for one, we enhance the epizootic safety in Poland, and we improve the security in both Poland and the EU as we stand a change to fight the ASF virus. Credits: https://legislacja.rcl.gov.pl/docs//509/12320706/12567010/12567011/dokument379622.pdf

Sylwia Mazurek Analysis Manager

Animex Foods with the title of Polish Economy’s Diamond of the Food

Industry in 2018 European Business Institute verified financial results of 80 thousand of companies and banks operating in Poland. The Diamonds of Polish Economy competition is organised by the Institute since 2008.

We received the distinct award of the Diamond of Polish Economy and that placed us in the team of the most precious companies in the food sector. Animex Foods is now one of 950 tops companies selected from the reviewed 51 thousand enterprises. The market value of the selected companies exceeds PLN 10MM. The Institute compared the results vs the pricing of the companies present at the Warsaw Stock Exchange. Animex Foods is in the same group as Philip Morris Polska SA, Coca – Cola HBC Polska Sp. z o.o., Danone Sp. z o.o., on the high 20th place. The European Business Institute has been established in 2005. And since then it analyses financial results of numerous companies. In course of 12 years they have analysed results of 80-90 thousand of Polish companies.

Ewa Sochocka PR Specialist

New in Animex Offer

FRANKI

! Answering our customers’ expectations Morliny launches new FRANKI sausages. It’s perfect for a tasty breakfast. FRANKI is available in three flavours - pork, poultry and white. Their distinctive features are: •PERFECT TASTE AND HIGH QUALITY •PERFECT BREAKFAST SIZE - READY IN THREE MINUTES!

So, if you need proper breakfast that will keep you going for bigger part of the day, try our offer. Try all products we have in our offer and pick your choice!

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Ewa Sochocka

PR Specialist

Livestock Procurement Department Contact Ełk

Animex Foods Division in Ełk ul. Suwalska 86

19-300 Ełk tel: +48 87 62 19 497

Starachowice Animex Foods Division in Starachowice

ul. Krańcowa 4 27-200 Starachowice tel: +48 41 27 66 282

Szczecin Animex Foods Division in Szczecin

ul. Pomorska 115b 70-812 Szczecin

tel: +48 696 219 501