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AHDB Pork Country Reports


29 November 2012

BPEX / AHDB Country Report - DenmarkBPEX / AHDB Country Report - Denmark

Denmark has the EU’s third largest pig breeding herd and is the fifth largest producer of pig meat. This means that it produces far more than can be consumed by its relatively small population and is, therefore, a major exporter.
BPEX / AHDB Country Reports
AHDB

Denmark is the leading supplier of imported pig meat to the UK and is a major supplier to many other EU Member States. It also exports a significant number of weaners to be finished elsewhere, notably in Germany and Poland.

Pig Numbers

Results of the July pig census published by Statistics Denmark show that overall pig numbers have remained relatively stable, with only a marginal decline from last year, reaching 12.47 million head. The sharpest decline was a two per cent fall in sow numbers, while the numbers of piglets increased marginally. This indicates a further improvement in productivity. Nevertheless, the recorded fall in sows suggests the pig herd could fall in the second half of 2012. This is reinforced by the maiden gilt figures, which were down eight per cent year on year, suggesting further falls in the breeding herd are possible.

Danish Pig Numbers, July

Source: Statistics Denmark

There were fewer weaners and slaughter pigs in Denmark in July this year, partly due to higher exports to Germany and Poland. Increased shipments to these EU Member States resulted in a one per cent reduction in pigs for slaughter. This may provide an indication of trends in pig numbers in the longer run, since continuing growth of weaner exports can be expected.

Production

Denmark slaughtered six per cent fewer pigs in the first half of this year compared to the corresponding period in 2011. Throughputs have been at or below year earlier levels in each month. The particularly low figure in May was due to additional public holidays this year. The decline in slaughterings is partly due to increasing exports of Danish weaners, which have reduced the number of slaughter pigs available in the country. The average carcase weight has remained largely unchanged since last year. As a result, production of pig meat was also six per cent down in first half of this year.

Danish Pig Slaughterings

Source: Eurostat

Trade

Danish pork exports have been relatively weak in the first half of this year, as shipments were down seven per cent compared to the same period last year. This was largely the result of lower supplies due to the sharp fall in pig meat production. While much of this decline was a result of lower trade with other EU Member States, the importance of the EU increased marginally, with its share of Danish exports rising from 71 to 72 per cent. Trade to Denmark’s primary market, Germany, was almost unchanged, while shipments to other major EU markets were lower. This included the UK, where higher domestic production and increased competition from Germany were also a factor. Nevertheless, Denmark remained the largest supplier of pork to the UK.

Exports to non-EU markets were also down as Japan reduced its intake by four per cent, while shipments to the Russian market declined by 21 per cent as a result of increasing competition from other countries, in particular Canada, the US and Spain.

Denmark is also a major exporter of live pigs and the total number shipped in the first half of 2012 increased by eight per cent compared with a year earlier as export prices were higher than those on the domestic market and a fifth more than a year earlier. Most of the Danish pigs were shipped to Germany and Poland and 95 per cent were weaners. While Germany took three per cent more Danish weaners than in the first half of 2011, the growth was mainly in shipments to Poland, which were up by nearly a third.

January - June

Source: Eurostat, GTIS

Prices

Pig producers in Denmark received a higher price for their pigs throughout the first half of 2012 compared with the corresponding period in 2011. Prices fell sharply in January before picking up again from mid February and have increased steadily since then. Since mid January, prices have increased by more than a quarter, passing DKK12 (€1.61) per kg in early August, since when they have continued to increase. Although, the Danish pig industry has experienced strong prices, this has not turned into higher profits for the producers as input costs have been rising at a faster rate than the prices.

Driven by strong export markets, the Danish weaner price has also increased steadily since early in the New Year. By early September, the price had reached DKK350 (€47) per head, more than 50 krone higher than in mid January and almost 20 per cent higher than a year earlier.

Danish Pig Reference Prices

Source: EU Commission

Outlook

According to the census for July 2012, there was a small decline in the breeding herd size, which may lead to a further reduction in pig numbers for the coming months. However, given the scale of the decline in July, it is likely that there will only be a marginal difference in pig numbers and hence production in the remainder of 2012 and early 2013. In addition, the reduction in the number of maiden gilts reflects lower producer confidence but whether this leaves an impact on the pig population for 2013 depends on the impact of feed price rises and conversion to group housing for sows. However, the impact of these factors is likely to be lower in Denmark than in many other EU Member States so only a small decline in weaner production is likely in 2013.

However, Danish slaughtering and production for next year is highly dependent on the weaner demand from Germany and Poland. Continuing exports of weaners are likely to cause further contractions in domestic pig supplies, although the scale of any further increases in shipments will be dampened if feed prices stay high without a sustained increase in finished pig prices. Any reduction in domestic production is likely to result in lower pig meat exports, with consumption on the home market likely to be stable given the importance of pig meat to Danish consumers.

Danish Pig Meat Production and Consumption Forecasts

November 2012

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