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Godt Nytår and Happy New Year

Let’s hope so as the VSP Chairman, Lindhart Nielsen, forecasts a better year ahead for the Danish pig industry

Lindhart Nielsen, Chairman of the Danish Pig Research Centre (VSP), gave an upbeat New Year Message to the industry, as he predicted improved earnings for pig producers during 2013. Although feed prices were likely to remain high for the foreseeable future, the months ahead would see a better balance between the cost of production and market returns.

It is too early to predict the full impact of the new EU pig welfare regulations, but pig production in the EU already began a downward move during 2012, recording a 3% drop in the January to September period.

It is inevitable that a significant number of pig producers, especially smaller ones, will chose to leave the industry rather than make the necessary investments to ensure compliance with the new EU pig welfare rules. And EU processors are already reporting high levels of cull sows coming onto the market. The impact of the latter on availability of EU pigs for slaughter will not be fully manifested until the 2nd half of 2013.

Mr Nielsen believed that the fact that Danish producers were well ahead of many of their EU competitors in terms of compliance with the new regulations would place Denmark at an advantage especially as regards supply of pig meat to the more discerning market sectors.

He also hoped that 2013 would see a renewed interest in investment in the production of finished pigs in Denmark, rather than the export of weaners to Germany, Poland and other EU markets. The industry had recently called on the Danish authorities to adopt a less rigid approach to the implementation of environmental rules, which places Danish producers at a significant competitive disadvantage.

It was likely that export of weaners would reach 10 million head during 2012, compared to nine million in 2011 and just a million a decade ago. There was now a compelling business case for the government to adopt a more flexible approach, as there would be a positive benefit for both employment and export earnings for the Danish economy.

Both Danish Crown and Tican have recently announced initiatives to support expansion of finishing capacity closer to home.