Danish pig farmers seek production cuts as losses deepen

Some Danish pig producers want to reduce their output as they lose an average of 350 to 400 kroner on every slaughter pig, DR reports. The crisis has left the economics of slaughter pigs in the red since the start of the year.

The losses are affecting some of Denmark’s largest producers, which are losing millions of kroner, as well as smaller and younger farmers.

“The European market is oversupplied with pork, and that is pushing prices down. The solution is to reduce the amount supplied,” said Jeppe Bloch, chairman of the Danish Pig Producers association.

He said the number of pigs in Danish barns must fall, or farmers must be allowed to export more pigs. More than half of Denmark’s pig production consists of piglets that are exported.

However, farmers supplying the Danish slaughterhouse giant Danish Crown cannot reduce their deliveries by more than five per cent under their agreements, Bloch said.

“Danish Crown has locked Danish producers into a hopeless system by maintaining a five per cent limit on changes to deliveries. This means producers who are prepared to reduce slaughter pig production are being held in place,” he said.

Danish Crown managing director Niels Duedahl described the situation as terrible but said the company could not change its delivery agreements.

“We cannot simply turn production up and down in the company. Our system is not set up for that, and so we are mutually dependent on one another in this value chain. But it is obviously extremely difficult right now,” Duedahl said.

Danish Crown plans to focus more on processed products in Northern Europe, as competition in the global market for cheap raw meat has intensified. The company faces strong competition from Brazil and the United States, Duedahl said.

The company’s strategy is to build what it calls a strong Northern European base with more processed products, including bacon and pulled pork. Danish Crown has sought to increase its level of processing for several years, but processed products currently account for just under 20 per cent of its total production.

Some farmers continue at the same level

While some farmers are reducing or want to reduce the number of pigs they produce, others are continuing at the same level. One of them is Søren Gjøl Jensen, who produces 14,000 slaughter pigs a year on his farms in Lemvig, near the Limfjord.

Jensen fills one and a half pig transporters each week and estimates that he loses about 80,000 kroner every time a truck leaves his farm.

He does not want fewer pigs delivered to Danish Crown, saying the slaughterhouse giant cannot afford unused capacity.

“If Danish Crown is to become strong again, we have to look ahead and believe that prices will recover. I believe that by next spring things will improve. They always have,” Jensen said.

The government wants to improve animal welfare in pig production and reduce exports of live pigs under a so-called four-party pig agreement. It also wants to support production of pigs slaughtered in Denmark, the part of the industry currently facing the strongest pressure.