The processor is to guarantee a margin for each finisher based on the average prices calculated by the VSPS – the Danish Pig Research Centre.

The scheme will be open to producers building new finishing units and it also includes a larger grant to the producers for the construction work.

The move is hoped to stop the fall in the production of finishing pigs in Denmark that has been seen over the last six years.

“Danish Crown is continuously working intensively to reduce costs and improve production efficiency in order to guarantee farmers a settlement that makes it profitable to produce slaughter pigs in Denmark,” said Deputy Chairman of Danish Crown's Board Asger Krogsgaard (pictured).
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“But even if we had been competitive over the last five years with the German listing, the cost of producing pigs in Denmark is much higher than in Germany, and one of the reasons is the Danish production system.”

He said that the move from Danish Crown is now a step in the right direction.

“With this action, we want to send the signal that we believe in a future for finisher production in Denmark,” said Mr Krogsgaard.

“When we provide a safety net for our member, who invest in new housing and new jobs, we also give our members a firm guarantee of a minimum level of earnings that they can take to their bankers. It could determine whether it is a yes or no to the new housing project,” Mr Krogsgaard added.

Provisionally, Danish Crown has set a limit to the subsidy to the production of half a million pigs, but if the plan is successful, it could be extended.

“This gross margin guarantee does not as such mean it will be more profitable to be pig producer in Denmark, but hopefully it creates an opening for the pig farmers, who want to expand but lack financial backing and security.

“The politicians must provide a better framework and conditions, approaching our closest competitors, such as Germany, Sweden and Poland to really create growth and jobs in the meat processing sector in Denmark,

“Until that happens, we at Danish Crown will do what we can to reverse the trend,” Mr Krogsgaard said.

The new grant and guarantee system is hoped to boost the number of slaughter pigs passing through the company’s slaughterhouses

Danish Crown's Board could at the end of last week presenting the Board of a number of new grant and guarantee schemes to promote a new production of slaughter pigs to the Group's Danish slaughterhouses, thereby ensuring Danish jobs.

Production of slaughter pigs in Denmark has over the past six years decreasing. It costs each year jobs in Danish slaughterhouses, and the trend continues.