Denmark’s organic pig farmers are now receiving a supplemental payment of Danish Krone DKK17 (US$2.55) per kilo for organic pork from meat processing companies. This supplemental payment is calculated each week and is paid on top of the standard listing price that both conventional and organic farmers receive per kilo of meat supplied.
Against this backdrop of rising prices, Denmark’s meat industry now expects more conventional pig farms to switch, in part at least, to organic farming. This prediction is based on stable production costs, coupled with the expectation of continued higher prices for organic pork.
This higher scale of remuneration means that pig farms are now in a position to trade profitably, a situation that has traditionally been made difficult due to a low level of consumer demand.
Latest industry data from Statistics Denmark shows that sales of organic meat rose by 21% in 2014. This segment now accounts for 8% of the total market for organic produce in Denmark, which was worth DKK6.2bn (US$932m) in 2014.
"It has now become profitable to produce organic pigs, and farmers can make a living. This is a welcome change of events for the industry because conditions have not always been this favourable over recent years," said Randi Vinfeldt, chairman of the Danish Organic Pig Farming association (DOPF/Svineudvalget i Økologisk Landsforening).
The size of the supplemental price being paid to pig farmers represents a unique situation, said Henrik Biilmann, managing director of Friland A/S, Denmark’s biggest buyer and processing company for organic pork.
"It says a lot about where the market is right now. We are in a situation we have never been in before, and it exists because there is a huge shortage of organic pork across European markets," said Biilmann. The profitability within Denmark’s organic pig farms has been steadily growing over the past six to seven years, he added.
The DOPF is now forecasting that Denmark’s organic pig sector will be slaughtering about 200,000 pigs a year by 2020. This estimate is based on more conventional farmers entering the organic pig production segment. Around 110,000 organic pigs were slaughtered in Denmark in 2014.
Such is the demand for organic pork that Friland has started to offer financial incentives and start-up grants to entice conventional farmers to switch, in part or whole, to organic pig rearing.