Larger Finishing Units Will Offer Better Returns for Danish Pig Producers

DENMARK - There are major benefits to be gained from producing finishers in new, larger units, participants at the recent Herning conference heard.
calendar icon 31 October 2014
clock icon 3 minute read

This is shown by the results of research undertaken by the Danish Agriculture and Food Council. The Danish Pig Research Centre (VSP) is therefore calling upon finisher producers and their banks to invest in new developments.

Over the past seven years, structural developments in the Danish pig finishing sector have been at a virtual standstill. This means that the housing units used for finishers are small and, in many cases, outdated. According to the Danish Pig Research Centre, it is crucial that pig producers embark on building programmes to safeguard the future of pig production in Denmark.

VSP Director, Claus Fertin, said: “Excavators should begin digging as soon as possible. “There is a good future for pig production in Denmark, but we need to replace the old housing units with new ones. We need larger and more modern facilities, which will ensure the economies of scale that many producers don’t currently enjoy because their units are too small. The initiative will also benefit the environment.”

An average finishing unit in Denmark currently has less than 1,000 pen places. Calculations from DAFC show that the financial benefits from converting from 1,000 pen places to 8,000 pen places in a unit is DKK50 in saved costs per finisher produced.

Mr Fertin added: “Such economies of scale are crucial for the future of finishing pigs and have a significant impact and that there is an unwillingness to invest in what is seen to be an uncertain future. However, brighter times lie ahead for pig producers. It requires courage from producers and a willingness to lend by banks and mortgage institutions. New and large units are the future.”

Currently, more than 80 per cent of finishers are housed in small and medium-sized units, which were built before 2007.

The Danish mortgage bank, DLR, shares this view view about the future prospects of Danish pig producers. DLR has been providing loans to farmers since 1960.

CEO of DLR, Bent Andersen, said: “We have believed in Danish agriculture and Danish pig production ever since our establishment. We believe in Danish pig production today and we’re sure that we will also have a large and financially sound sector in the future. There is, therefore, no doubt that DLR will be involved in financing profitable investments in future finisher production as part of a total financial solution.

“We at DLR have seen pig producers experience many ups and downs throughout the years. And although there is still a certain amount of caution about making major investments, I am sure that the commercial opportunities for pig producers going forward are good.”

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