A slaughter pig guarantee which will ensure producers in Denmark achieve a finishing margin of at least 87 Danish Krone (£9.30) a pig has been introduced by the country’s meat processing giant, Danish Crown.
The move is designed to halt a continued decline in Danish pig production which has seen slaughter pig numbers fall from 18m a year 10 years ago to 14m today. It’s also designed to reduce the export of weaners to Germany and Poland which are currently running at 10m pigs a year.
“We believe the new guarantee will put a bottom in the market for producers,” a Danish Crown spokesman told Pig World.
“The guaranteed margin will be applied to the domestic industry according to the monthly average prices calculated by VSPS, which is our Danish Pig Research Centre. This is a well-respected and approved price reporting programme in Denmark and a sound base around which to operate the guarantee.”
Danish Crown have also extended the scope of a second production incentive for producers which they’ve been running for the past 18 months, whereby producers who invest in new production facilities for finished pigs qualify for a 0.15 Krone (2p) per kg bonus on all finished pigs for the first five years of new production. This scheme was previously capped at 8000 pigs per producer but has now been put on an open-ended basis.
“We noticed that a significant number of producers to take up this incentive were adding up to 20,000 pigs a year to their output,” said the spokesman. “We’ve therefore decided to remove the upper limit on the bonus.
“The first step, of course, is to halt the decline in Danish finished pig production. Perhaps, after that, we can begin to see numbers rising again.”