Danish Crown suffers from raw material shortage

Danish Crown sees a sharp decline in slaughter figures in its own country. Denmark has enough pig farmers, but the majority of the piglets are exported to Germany and Poland. In order to be able to slaughter these pigs itself, the slaughterhouse tries to attract new suppliers with a hefty premium and free advice.

Danish slaughterhouses are having great difficulty filling the slaughter hooks this year. The weekly slaughter figures are far behind the long-term average. In the first 9 weeks of this year, the slaughter figure stagnated by no less than 8 percent. Without measures, this trend will continue and employment at the slaughterhouses will be at stake.

Raw material shortage
According to Danish Crown CEO, Jais Valeur, Denmark produces a lot of piglets, but slaughterhouses hardly benefit from the large pig production. Danish Crown has been suffering from a raw material shortage for some time and can therefore not take full advantage of good export opportunities. This is also reflected in the export figures. In the first three months of this year, Danish pork exports to China fell by almost 20 percent to 25.500 tons. 

Danish pig farmers are therefore encouraged to fatten the piglets themselves. Both the Danish government and the Danish Crown are coming up with incentives for this. For example, the government has released a subsidy. Pig farmers can lay claim to this for the construction of new fattening pig houses.

Danish Crown is also taking measures. It was already announced last November that existing suppliers will receive a premium, converted almost 7 cents, on top of the pig price. Now new suppliers are also being tempted with a higher payout price. New suppliers, who supply pigs especially for the British market, are tempted by Danish Crown with a premium of 4 cents per kilo. This premium is fixed for at least one year. As a bonus, pig farmers receive free advice.

Win win situation
Danish Crown has high hopes for the stimulus package. The package is mainly intended to create a win-win situation. Since yesterday, May 2, pig farmers can make use of the premiums and perks.  

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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