'Challenges are bigger than ever'

Koen van Bergen, sector specialist at Rabobank, knows better than anyone what is going on among Dutch pig farmers. He is jointly responsible for knowledge development and financing policy. For example, Van Bergen regularly talks with entrepreneurs about various subjects: from business development to termination.

In addition, Van Bergen keeps a close eye on developments in the worldwide market. "These are challenging times for pig farmers. The long-term expectation is that there are probably about 1.000 entrepreneurs left in the Netherlands."

What year has 2018 been for pig farmers so far?
"We saw at the beginning of the year that the European pig herd had grown. That is why we could expect supply pressure. Usually pig prices rise in the second quarter, but that has not happened now. In addition to the depressed supply, pork sales to China have handed in. This means that self-sufficiency has increased in Europe and that puts pressure on the price."

"The previous 2 years were significantly better. However, 2018 (so far) cannot be described as a bad year. We can conclude that the price decrease has started, especially in the piglet market. In Germany, the contraction is due to stricter legislation and regulations, already in place. Due to a smaller supply and more positive demand from Germany, the piglet price may recover somewhat in the long term. On balance, we expect 2018 to be a year with average yields. In addition, we expect an average feed profit for the finishing pigs and a slightly below average feed gain for breeding sows."

The revenues are becoming more and more erratic, does this also apply to the costs?
"On the cost side, the feed price has risen sharply and the disposal costs for manure are also extremely high. The collection contributions vary from €25 to €30 per cubic meter. This is due to the disappointing conditions during the spreading season, which was partly due to a wet spring. and dry summer were caused. However, this can be seen as an incident."

"Another cause is the reduced export opportunities in Germany as a result of the tightened regulations. This is not an incident, but the new reality. If demand-driven manure processing does not get off the ground, the manure disposal costs will probably remain high."

Is extra manure processing capacity therefore needed?
"There is quite a bit of processing capacity in the Netherlands, but more is needed to create a balance. We expect that in the coming years, especially in the eastern part of the Netherlands, there will be additional processing capacity. This can provide relief, but the manure issue is and will remain complex. The price for manure processing consists partly of technology costs and partly of the sale of the residual flows (such as solid fraction and mineral concentrate)." 

"When unprocessed manure is too expensive, the price of the processed manure products also increases. This means that manure processing costs rise and the pig farmer ultimately has to pay more. Despite the fact that we have a lot of experience in the Netherlands, manure processing remains challenging. based on technology, while market demand determines which technology you need. Market-oriented manure management is the motto."

What competencies does a future-proof pig farmer have?
"Companies are getting bigger and the risks are also increasing. Risk management is therefore becoming increasingly important, partly because the returns are becoming more erratic. Entrepreneurs are increasingly aware of this. An entrepreneur needs buffers to survive a price drop. have a grip on the cost price, for example, the feed price is sometimes fixed for a longer period of time."

"There is a staff shortage in pig farming. That does not make finding good employees any easier. More and more demands are made on a future-proof pig farmer. He/she is everything in one: professional, entrepreneur and manager. Increasingly more often we see that, in companies that get bigger and more capital intensive, these 1 roles are no longer united in 3 person. All in all, these are challenging times for pig farmers. That was also the case in the past, but now perhaps even more than ever."

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This abbreviated interview is part of the pig analysis of 2018. The subscribers of Boerenbusiness Pigs & Feed Pro recently received this. Would you also like to receive this magazine? Click here to become a subscriber and receive the magazine.

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Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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