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Better outlook for Danish producers

While pig price expectations for 2013 were recently revised downwards, Danish pig farmers’ fortunes will continue to improve during 2013. In the longer term, the prospect of fewer weaners being exported and more pigs being finished in Denmark received a boost with the news that the government would shortly announce a package of measures to support the building of new, environmentally friendly finishing accommodation.

Following several years of poor results, it now seems that Denmark’s pig producers can look forward to better days. This was revealed in a recent report compiled by the Danish Pig Research Centre. Danish pig producers’ operating profits saw a strong year-on-year improvement in 2012. Despite the fact that price expectations were recently revised downwards, an improving position is forecast during the coming year.

The advances in 2012 and 2013 are due to better prices for pig meat, low interest rates and high grain prices, as Danish pig farmers produce significant amounts of arable crops, much of which is used to feed their pigs. Grain prices are expected to fall after the 2013 harvest, which will, of course, reduce feed costs. Weaner producers have seen the strongest advances over the 2011-2013 period, as a result of strong demand on export markets.

Weaner exports continued to grow strongly in the early weeks of 2013, with shipments in January and February rising to 1.57m from 1.43m in 2012, primarily to increased demand from the German and Polish markets.

The prospect of increased investment in the building of new finishing capacity in Denmark received a boost, with an announcement that the Danish government are to allocate a budget of DKK 150m (£17m) to supporting the building of new, environmentally friendly pig housing. Coupled with the initiatives announced by Danish Crown and Tican, the Danish Pig Research Centre estimate this has the potential to expand pig finishing in Denmark by 1.5m head, with all the additional benefits of higher local employment and increased export value.