Danes flee unsustainable production

UK - Danish pig producers looking to start afresh in Britain will find a warm welcome here – but they will not necessarily be escaping the influence of Denmark’s chronic loss-making pig prices.
calendar icon 10 March 2006
clock icon 4 minute read

National Pig Association

NPA is active on members' behalf in Brussels & Whitehall, and with processors, supermarkets & caterers - fighting for the growth and pros-perity of the UK pig industry.

As the chart above shows, Denmark is still selling pigmeat at prices that mean losses for their own producers and which destabilise the European market.

It was clear at the recent Danish show Agromek, and from reports by British land agents Savills, that there is a spate of producers looking to move to Britain.

Worried by four years of unsustainable production in Denmark, and weary of constant hostility from Danish politicians and consumers, they are looking to Britain rather than the eastern bloc countries.

They see a more favourable climate for producing pigs in this country, with nearly 60 million consumers on the doorstep, and a culture and language they are comfortable with.

However, because of the ready availability of cheap Danish pigmeat, retailers in Britain are currently attempting to get rid of the British premium.

Danish producers who set up in Britain will find the British premium is not a route to riches but merely part-payment for the more expensive production costs that prevail in this country, where sows are kept on straw rather than in crates, and where boars are not castrated.

Attempts by the major retailers to get rid of the premium - by using cheap Danish pigmeat as a loaded gun pointed at producers’ heads - will fail. This is because, as a result of the industry’s marketing drive centered on the Quality Standard Mark, most consumers are clear they prefer fresh British pork and will pay a premium for it.

However, the current drive by retailers to get rid of the premium does have the potential to cause short term instability in the British market, and to ensure the next breeding herd census returns show a further fall in the size of the national herd.

Despite these difficulties, Danish producers will find a more favourable climate for producing pigs in Britain. Independent valuer Peter Crichton reported today that, so far, all the enquiries he has handled from Danish producers wanting to start in Britain have been for indoor production.

Agromek managing director Peter Hansen says Denmark’s farmers belong in the ‘global elite’ but at home their vital contribution to the Danish balance of payments is continually being denigrated by politicians and trade unions.

This is not the attitude that prevails in Britain, except perhaps in the buying rooms of some supermarkets.

Currently British processors are critically short of throughput but they cannot go out into the market and source more British pigs because that will put the price up, and the retailers have made it clear they are not going to pay any more.

This impasse has pushed more pigs on to the spot market, which in turn has weakened the spot market – so in the end the supermarkets are getting the cheaper prices they want.

However in willing a further decline in the British herd, the major retailers (with the usual exceptions - Waitrose, M&S etc) are being short-sighted.

Avian flu is clearly going to disrupt food supplies and buying habits over the months ahead, and more immediately there is a classical swine fever outbreak on pig farms in Germany – not far from the Dutch border – which could have a knock-on effect across the continent.

The outbreaks in Germany at Haltern-am-See in the North Rhine-Westphalia region, involve 575 susceptible animals, according to OIE (Office International des Epizooties). The figures for last Friday are: 75 cases, 84 deaths and 491 destroyed.

The control measures applied are: stamping out; prohibition of movements of animals of the susceptible species in an area around the infected holdings in accordance with EC-legislation; screening; zoning; disinfection of infected premises.

Source: Digby Scott - the National Pig Association - 9th March 2006

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