The latest pig census in Denmark indicated that production would remain stable in the coming months, although DAFC recently revised down their price forecasts for the remainder of this year. Although pig slaughterings in the first quarter of 2014 were virtually unchanged from the previous year, exports of weaners remained at high levels. DAFC continued to highlight that ‘over implementation’ of EU Directives by the Danish authorities placed the country’s farming and food industry at a disadvantage to its main competitors.The April pig census in Denmark showed a modest 2% increase in overall pig numbers. The key figure, as an indicator of future production trends, is the size of the breeding herd, which was unchanged. However, the increase in the number of ‘maiden gilts’ offsetting the small decline in the numbers of older sows can usually be read as a sign of a fairly stable position for the immediate future.
The DAFC analysts recently revised down their future estimates of Danish pig prices. We will see higher prices in the next two quarters but it is not expected that prices will reach the previously anticipated levels. In the early months of 2014, prices were depressed following the closure of the Russian market to EU supplies. More recently, the decline in availability of pigs across the EU, coupled with the expectation of lower supplies of US pig meat onto global markets due to the losses resulting from the spread of the Porcine Epidemic Diarrhoea virus (PEDv), has restored confidence in the future marketplace.
In the first three months of 2014, pig slaughterings in Denmark were virtually unchanged from the previous year at 4.8 million head. However this figure compared to 5.2 million in 2012 and 5.6 million head in 2011.
In the same period, weaner exports grew to 2.6 million head, compared to 2.3 million head in the previous two years. The steady growth in these exports has been largely due to the cost advantages enjoyed by German pig producers due to the rigid environmental rules in Denmark.
DAFC continued to exert pressure on their government to adopt a smarter and more targeted legislative approach, as opposed to one based on ‘over implementation’ of EU Directives.
In advance of the elections to the European Parliament, DAFC Political Director, Flemming Nør-Pedersen, highlighted several examples of ‘over implementation’ or gold-plating of the general requirements laid down by EU Directives. For example, he cites the much stricter controls on the spreading of slurry on the fields.
“The Danish rules mean that Danish crops are fertilized at a less than optimum level and we estimate the net loss being somwhere between DKK 1.6 and 3.3 billion annually” says Mr Nør-Pedersen
In addition, veterinary controls in the meat industry go significantly beyond the level required by EU rules.
“If the authorities in Denmark charged the minimum fees which the EU provides for, Danish companies’ meat inspection costs would be DKK 85 million less per year.”
The manner in which the EU ‘cross-compliance’ regulations are applied in Denmark exposes farmers to potentially double the sanctions applied in most other EU countries. These regulations mean that farms in receipt of subsidies or grants must comply with a number of requirements determined by the EU in respect of the environment, health and animal welfare or face the possibility of their entitlement to EU subsidies being withdrawn.
”In Denmark the authorities have allowed more regulations than necessary to be covered by these ‘cross-compliance’ regulations. This means increased administrative burdens for farmers. Moreover, the risk of having farming subsidies withdrawn is far greater for Danish farms than for most of their fellow EU competitors.” concluded Mr Nør-Pedersen.
Other areas highlighted as contributing to additional costs for the Danish food and farming industries are the stricter limits on use of ammonia and chlorides which add to refrigeration costs for the food processing sector and a more restrictive interpretation of the Aquatic Zone and Habitat Directives, which places Danish livestock producers at a disadvantage to their competitors.