Danish Producers Suffer High Feed Costs

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Danish Producers Suffer High Feed Costs

06 August 2012

DENMARK - At current prices — and even taking into account bonus payments — Danish producers are losing money on the pigs they send for slaughter, because of high feed costs, says Danish analyst John Jenson.

He sees high feed costs prevailing for some time and says the time-lag before prices reflect the extra costs will mean periods of "bad economy" for producers.

Danish weaner producers should not expect salvation from German finishers, he warns. "The Germans are not going to buy piglets when there are no prospects of any improvements in price, and when they have the same high feed prices as in Denmark."

He is advising Danish producers to aim to be self-sufficient in grain and to guard against high soya prices by combining the purchase of soya with the sale of home-grown canola (oilseed rape).

There is a reasonable correlation between the prices of soyabean and canola, which can serve as a form of hedging, he said.