The cost of pork in the European Union is considerably higher than the costs of other major producers, according to the InterPIG cost comparator, in which Wageningen Economic Research is involved. Compared to other EU countries, Dutch production costs are relatively low. The Netherlands scores quite well, particularly in the field of feed, but housing costs and labor costs are also relatively low. Senior researcher Robert Hoste from the Wageningen Economic Research institute explains why Dutch costs are on the low side.
What is immediately striking is that the costs in countries outside Europe are considerably lower than in the European Union and the United Kingdom. In Mato Grosso, Brazil, production costs are the lowest at €1,41 per kilo. In the Brazilian state of Santa Catarina, the production costs are €1,61 and in the United States the price is around €1,81.
In Europe, only Denmark comes close. In the Northern European country, the average production costs are around €1,86 per kilo. In the Netherlands, the production costs of €2,08 are also relatively favorable. In Germany, production costs for comparison are €2,22. In the United Kingdom the costs are even higher, at €2,55 and in Italy it is even €2,89. France (€1,92), Spain (€2,04) and Belgium (€2) do slightly better than the Netherlands in terms of production costs.
Expensive feed, low feed costs
In the field of feed, the Netherlands has relatively low costs per kilo of slaughter weight. In the Netherlands, feed costs are about €1,33. In Belgium the share is €1,42 and in Germany €1,44. That does not mean that feed prices in the Netherlands are low. They are actually rather on the high side. Hoste explains that the difference in feed costs can be traced back to the difference between countries that produce feed themselves or mainly import feed. This makes Dutch food quite expensive. For example, Dutch livestock feed averages €401 per tonne, but in France €360 per tonne and in Denmark €349 per tonne.
The low feed costs are rather the result of efficient production. Dutch pigs produce relatively many piglets per sow per year and the feed conversion ratio for fattening pigs is relatively favorable. In addition, the slaughter weight is on the high side. This means that Dutch pig farmers can spread the high costs over a large number of kilos.
Remarkably, the large availability of residual flows does not result in a lower price. According to Hoste, the prices of feed from residual flows and compound feed are moving closer together. Although prices are somewhat lower, residual flows still have to be processed at the company. If you add the costs for this, there is hardly any difference. "There will certainly be advantages for individual companies, but if you compare it internationally, we are in the middle bracket."
Low Housing and Labor Costs
It is also striking that Dutch housing costs are relatively low at €0,23. German housing costs are 6 cents higher, because the stables of our Eastern neighbors are quite expensive. There are several reasons for this. Hoste says that German stables are more solidly built. Because the costs are calculated from the perspective of new construction, you will end up with a higher amount. This is apart from the fact that German welfare requirements are becoming much higher than in other European countries, causing housing costs there to become further out of line. In Germany these are legal requirements for which no immediate compensation from the market can be expected. This is now also the case in the Netherlands, but in addition, the Beter Leven quality mark is the standard in the field of animal welfare for Dutch supermarkets. However, the InterPIG cost price comparison concerns regular production.
It is remarkable that labor in the Netherlands is also relatively cheap. In the Netherlands, labor costs amount to €0,13 per kilo. In Denmark these costs are €0,17 and in Germany the labor costs per kilo are €0,15. "The hourly rates are very high, we charge €28 per hour," says Hoste. This means that the Netherlands has one of the highest rates of the countries compared. Only Sweden and Denmark come close. Dutch labor efficiency, on the other hand, is very high. Due to future animal welfare requirements, Hoste believes that the required labor input will increase.
Danish costs
As far as Hoste is concerned, the difference between the costs of the Danish and Dutch pig sectors is the most striking. "It is difficult to explain exactly how this happened," says Hoste. But what is clear is that they are doing well on all kinds of fronts. In part it is because Danish livestock farmers even grow feed. This also explains the difference in feed costs. The decline in the Danish pig population seems contradictory to this. Although this is not so strange. The average age of Danish pig farmers is increasing. Many livestock farmers choose to close down their pig stables and decide to keep the feed. That's a lot less hassle. The high feed prices made this solution extra attractive.
In addition, it is striking that the costs of Spanish pig farmers have risen on all sides. "Due to the outbreak of PRRS, 30% of the piglets and pigs die on affected farms," says Hoste. The costs must then be spread over a smaller number of pigs. In addition, Italy's costs are high. Costs in Italian livestock farming are always higher, but Hoste says that Italian livestock farming is particularly affected by higher feed costs. The pigs in Italy are fattened to 160 to 170 kilos, which makes the feed conversion much less favorable. The combination of unfavorable feed conversion and high prices reinforces each other, so that feed costs have increased significantly.