'Pig farmers break with the past'

Pig farming in the Netherlands has traditionally been supply-oriented, cost-driven and does not produce in fixed chains. That's a dead end. Production costs in Dutch pig farming are increasingly out of step with neighboring countries such as Germany, Denmark and Spain.

Moreover, social acceptance for intensive livestock farming is low and the market risks in production are increasing. Then as an entrepreneur you have to be very strong technically and economically to be able to sustain this in the long term. Admittedly, the market is attractive at the moment and pig farmers now have money left over to plug gaps or reserve for future bad times. So why bother too much? But you have to fix the roof when the sun shines and the bad economic times are guaranteed to come.

being distinctive
The pig production of the future is oriented in chains, because as a chain you can be stronger and share risks. Moreover, you can then distinguish yourself in the sales market and manage the balance between supply and demand. This distinctiveness and demand-driven production is desperately needed to achieve higher consumer prices and thereby improve margins for all links in the chain. You can also reduce failure costs in the chain, such as unnecessary costs due to incorrect timing of delivery or product quality.

I imagine this as follows: pig farmers will work closely together in producer associations; these producer associations enter into a long-term partnership with the meat industry on the basis of equality. This cluster of producers' associations and meat industry is distinctive in the market and can make agreements with supermarkets and other buyers on the basis of equality. The terms 'equivalence', 'long-term' and 'distinctive' are keywords for the pig production of the future for me.

Breaking with the past 
However, this requires a break in thinking, an "Umdenk" as the Germans say. When I surveyed pig farmers more than 10 years ago whether they would like to produce in an integration, there was an interesting response: 'Only if that is the only way to survive.' Entrepreneurship is in their blood for pig farmers and many want to be free to do business. But only the largest and most efficient pig farmers are strong enough to survive.

For others, a break in thinking is necessary: ​​to give up a bit of freedom in order to be able to cope with the interplay of forces of the future. It should not be a complete vertical integration, with the control of the entire chain in one hand. Then you would take the entrepreneurship of pig farmers off their hands, and with it the drive for maximum performance.

Creating equality
The shift in thinking has started in the Netherlands, as witnessed by a number of good partnerships (such as Good Farming Star and the Sustainable Pork Chain), where a start has been made with added value and distinctiveness. But here too the position of the pig farmers must be strengthened, so that they have an independent role in the production chain and there is balance in the negotiations (think of the term equality).

Short-term thinking, unfortunately a characteristic of the meat industry, must make way for the new approach with, I repeat again: long-term cooperation on the basis of equality in order to be distinctive in the market. Then there will be sunshine after the rain.

Robert Hoste

Robert Hoste is an Economist Pig Production at Wageningen Economic Research (WUR). He is involved in 3 tasks: sector and business economics in pig farms in the Netherlands, international analyzes and the production chain.

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