Denmark: the cost of environmental excellence

Denmark is Europe’s fifth-largest pork producer and a major player in terms of global exports, shipping some 1.6m tonnes of pigmeat last year including by-products, cuts, bacon, sausages, pig carcases and canned meat.

The country’s pig industry stands out for its environmental excellence, and Danish farms are considered some of the most environmentally-friendly in the world. However, while the Danish industry is proud of the high sustainability it achieves, the prioritising of the environment has had an impact on the country’s pig production balance.

Although Denmark’s pig herd has remained relatively stable over recent years, with around 29m piglets born each year, an increasing number of piglets are being exported to Germany. instead of being reared for slaughter in Denmark. In 2008, 22.2m head of pigs were slaughtered in Denmark, with 5.3m head of piglets exported. Last year, 19.9m head of pigs were slaughtered in Denmark, with 9.2m head of piglets exported to Germany.

Environmental regulations​

Karsten Flemin, senior market analyst at the Danish Agriculture & Food Council says the increase in piglet export and decrease in domestic slaughter can be largely attributed to environmental regulations in Denmark, which make it easier for producers to rear piglets than slaughter pigs. “Environmental regulations in Denmark mean that there are rules on the amount of land you need for the slurry,” he explains. “It is therefore easier to produce piglets, because you don’t have so much slurry when you produce piglets, so you don’t need so much land.”​

He adds that German farmers have better conditions for producing slaughter pigs, because the German government subsidises the construction of biogas plants, enabling the farmers to use their slurry to generate energy.

Finn Udesen, head of production economy and statistics at the Danish Pig Research Centre, says Danish farmers are also not allowed to use as much fertiliser as German farmers and are also under constant pressure to reduce pesticide use,  which has an impact on the production of feed crops.

“In Germany they also have special rules on VAT – the farmers can keep VAT and this also gives German slaughter pig producers a big competitive advantage over Danish farmers,”​ he explains. He adds that the Danish government is pushing for more biogas on Danish pig farms, but is not willing to subsidise it yet.

Udesen says the poor conditions for Danish slaughter pig producers means there is very little investment. “Slaughter pig producers are mainly part-time producers, and that also means they are not as professional as sow producers,”​ he says.

Slaughterhouse closures​

Declining slaughter pig production and consolidation has resulted in a dramatic fall in the number of slaughterhouses in Denmark. In 1970 the country had 54 slaughterhouses with throughput of over 100,000 pigs, but by 1990 this had fallen to 13 and by 2012 just nine. “Slaughterhouses in Germany have very cheap labour compared to what we can have in Denmark, which gives them an advantage,”​ adds Udesen.

With slaughter pig production falling, some of the remaining slaughterhouses are looking to reduce worker numbers, and Udesen warns this trend will continue unless the government, investors and industry act to improve conditions and boost investment in slaughter pig production in Denmark. “It is necessary to keep the production in Denmark so we keep the slaughterhouses and the know-how,”​ he says.

However, despite the pressure on the domestic slaughter industry, Udesen points out that Denmark has a number of advantages over other pig-producing countries. “We are lucky to have very good breeds, so our sows are very efficient; the average farms in Denmark are weaning almost 30 pigs per sow per year, which is tremendously high,”​ explains Udesen. “We also have very fast-growing pigs, and feed conversion rates are also about the best in Europe.”​

He adds that while farmers across Denmark have struggled in recent years against rising feed costs and subdued pig prices, a recent increase in pig prices has balanced the books and resulted in a fairly stable economy for farmers.

Export performance​

Improvements in farm economy means Danish pig production should remain stable in the year ahead. Flemin says that while the decline in slaughterings might have a small impact on exports, they are likely to remain strong, with good demand in EU and third-country markets. “We export about two-thirds of our pigmeat to the EU, and our biggest markets in the EU are the UK and Germany,” he explains. “Outside the EU, or biggest markets are China and Hong Kong, although Russia and Japan are also important.”​

He adds that environmental credentials aside, Danish pigmeat stands out from competitors because of the country’s high veterinary and hygiene standards. “Danish exporters have access to more markets then many competitors,”​ he explains. “Denmark is one of the only pig producers that has no restrictions on exporting to Russia, for example.”​

Denmark has also worked hard to develop an industry that can react to demands from different international markets, and has developed a number of cuts for specific markets.