Record profit Danish Crown, pig farmer benefits

Despite the corona crisis and the price drop in the pig market, Danish Crown has made a record profit in the broken financial year 2020/21. Pig farmers can expect an attractive supplementary payment.

In the broken financial year, which runs from July to June, the profit amounted to 2,2 billion Danish kroner. Converted at the current exchange rate, that amounts to a sloppy €295 million. Compared to the previous broken financial year, this is an increase of 5%, while profits also increased by 46% in that year. Then prompted by strong Chinese demand. Due to the extreme fall in prices on the pig market, the turnover is slightly lower, this ratio falls by 4,1% to the converted €7,8 billion.

Market focus pays off
Despite the fact that the Chinese sales opportunities have diminished considerably this year, the results hold up. In addition to the strong product positioning for pork in Northern Europe, among other places, this is partly due to the high prices and good sales opportunities for beef and veal.

Danish Crown states in a statement that the DAT-SCHAUB division, which sells animal products to the pharmaceutical industry, is also performing better. The unit is now one of the top suppliers to pharmaceutical companies worldwide, according to the group. 

Subsequent payment fraction lower than last year
The cooperative's pig farmers members are reaping the benefits of the good results. The supplementary payment for the pigs delivered amounts to € 0,17 per kilo. An additional €0,14 per kilo is paid for delivered slaughter sows. This is a windfall for pig farmers confronted with a steep drop in prices, although the supplementary payment is slightly lower than last year. This is because the slaughter figures rose by 8% in the past financial year, so that the supplementary payment must be spread over a larger number of kilograms delivered.

Danish Crown has set itself the target of paying suppliers/owners a pig price of €0,08 per kilo higher than the European average. The company says it has now succeeded for the second year in a row. 

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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