The USDA’s Global Agricultural Information Network, part of the Foreign Agricultural Service, Wednesday reported that the number of Germany’s hog producers was down. The GAIN report credited much of the decline to lack of export markets because of recurring bouts of African Swine Fever, but a new labeling law may keep sidelined producers out of the picture.
NEW LABELING LAW
In August, after more than a decade of political discussions on the restructuring of livestock farming, a new German law on mandatory animal husbandry labeling went into effect, the GAIN report said. It requires hog farmers to report their husbandry practices and tells food businesses to label goods accordingly.
The label is part of the overall aim of the German Federal Ministry of Food and Agriculture to transform the livestock sector, the FAS said. Imported products are not affected by the new law, although sellers of imported product certainly will be allowed to conform.
The new law on mandatory animal husbandry labeling was approved by the German Federal Parliament on June 16, 2023, and went into effect on Aug. 24, the GAIN report said.
Initially, the German government aimed to apply domestic mandatory labeling standards for imported products, but the EU and World Trade Organization trade laws prevented it, the FAS report said. The European Commission notified the bill ahead of its adoption and the final law does not apply to products from other EU countries or countries outside the bloc.
THE LABEL
The label differentiates between five types of housing: (1) Barn, (2) Barn + Extra Space, (3) Fresh Air Barn, (4) Outdoor/Pasture and (5) Organic, the GAIN report said. The labeling requirement initially only applies to fresh pork (chilled or frozen, packed or unpacked) from animals raised, slaughtered and processed in Germany.
The determining factor for labeling is how the animals are kept during the fattening phase, the report said. Distribution channels affected are retail, e-commerce and farmers markets.
An extension of mandatory labeling for out-of-home catering and gastronomy is planned for 2024, however, the report said. Furthermore, the label is supposed to be extended to other animal species and products.
OUTLOOK
Even though producer profitability has now been restored (after more than two years), many hog farmers are quitting the business because of the political and financial uncertainty they are facing, the FAS said. The government envisions the introduction of the new mandatory label as a first step in setting directions in the transformation process of the livestock sector.
However, federal budget plans for 2024 do not include financial resources for the support of farmers willing to convert their barns, the report said. This indicates the difficult economic situation for hog farmers is likely to remain the same.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.71 per cwt to $187.80, compared with last week’s range of $181.64 to $186.65 per cwt. FOB dressed steers, and heifers went for $287.19 per cwt to $291.15, compared with $283.68 to $291.26.
The USDA choice cutout Wednesday was up $1.41 per cwt at $300.95 while select was off $0.59 at $278.51. The choice/select spread widened to $22.44 from $20.44 with 122 loads of fabricated product and 27 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.48 to $1.61 a bushel over the Dec corn contract, which settled at $4.83 1/4 a bushel, up $0.03 1/2.
The CME Feeder Cattle Index for the seven days ended Tuesday was $253.27 per cwt, down $0.63. This compares with Wednesday’s Sep contract settlement of $251.52 per cwt, down $1.07 and Oct’s $252.25, down $1.62.