The country has a population of just 5.5 million (m) people, but with total pig production standing at over 29m and producers exporting to the value of DKr32bn (£3.5bn) in 2013, the significance of the pig industry to this country is obvious.
Alongside economic growth, Denmark has also pushed for higher animal welfare. However, costs are inevitably incurred by improvements to animal welfare. So when Dan Jørgensen, a lifelong animal welfare advocate with strong opinions on the subject, was appointed Denmark’s minister for food, agriculture and fisheries in December 2013, eyebrows were raised across the industry. Jørgensen immediately made his desire clear to accelerate work towards welfare goals.
Danish Agriculture & Food Council (DAFC) chairman Martin Merrild says: "To tell you the truth, a lot of people in our sector were shocked when we heard the name of the new minister. Straight away he was in the papers talking about animal welfare problems in the pig sector and he was telling everyone that now we should do something about it."
However, Merrild tells GlobalMeatNews that, fortunately, the new minister has not gone down the same route as Sweden, where aggressive advances hit pig production. "He’s very determined to do something about animal welfare, but at the same time he says it doesn’t do the pigs any good if we press the industry so hard. So what we must do is work with welfare, but do it so that we don’t lose our competitiveness. The big fuss there was about him has actually ended in a situation where the farmers feel relatively secure about the situation. We have the same wishes as he has; we don’t want to see piglets die."
A compromise seems to have been reached after the new minister called a Welfare Summit to find a way for Danish pig production growth and animal welfare to go ‘hand in hand’. The summit, on 13 March this year, was attended by animal welfare campaigners, representatives from the veterinary profession, retailers and consumer groups. A declaration, which set out a number of targets, was signed by all parties.
The main targets were improving survival rates among piglets, encouraging the uptake of free-farrowing systems for sows (with a goal of reaching at least 10% of sows by 2020), finding alternatives to castration of male piglets without anaesthetic by 2018, reducing the number of tail-docked piglets, and reaching a lower incidence of stomach ulcers in sows and finishing pigs.
Merrild says: "We are delighted that the parties have succeeded in reaching a broad agreement, which will secure even higher pig welfare standards in Denmark. At the same time, it recognises that Danish pig production should achieve the economic growth that Danish society wants. The agreement underpins our future work by solutions to some of the major challenges of pig production."
Signatories to the declaration included the Ministry of Food, Agriculture & Fisheries, the Danish Agriculture & Food Council, the Danish Pig Research Centre, Animal Protection, Animal Friends, The Danish Veterinary Association, Danish Master Butchers, The Federation of Grocers and the Danish Consumer Council.
Merrild adds: "It is only in the interests of our farmers that we continue to improve piglet survival rates and try to find sustainable solutions for a number of the challenges that pig production is facing. First and foremost, this will lead to higher welfare standards, but it’s also crucial that we producers are as skilled as possible at what we do, so that in the long term we can increase exports and protect the jobs of those employed in agriculture and food production."
However, reaching these targets will be challenging. Asgar Kjær Nielsen, quality manager at the Danish Pig Research Centre, tells GMN that the piglet mortality target will be the hardest. He says: "Greater survival will definitely be the toughest challenge to the farmers, no doubt, because we are already doing well. Obviously everybody wants the piglets to survive because it’s money, it’s not just a number. But it’s tough when the farmers have such good results already." Another goal laid out was increasing freedom farrowing, relevant here because it ironically may hurt the piglet survival rate.
The summit gave the industry a target for at least 10% of nursing sows to be loose in the farrowing pens by 2020. Denmark has already brought in welfare improvements for sows – ahead of EU legislation and in line with UK standards, sows will go straight into groups or individual pens for the service period as opposed to being kept in sow stalls. This legislation applies to all newly built facilities after 1 January 2015, and to all facilities by 1 January 2035. But the goal of having nursing sows loose in farrowing pens, as declared at the summit, is another huge challenge.
As mentioned, increasing freedom farrowing is likely to have an adverse effect on the piglet survival rate, as the piglets can easily be crushed by the sow. Furthermore, farmers are likely to suffer economically due to the changes.
Nielsen adds: "It’s something that has to be more market-driven, because it costs much more for a farmer to build a farrowing unit with these pens as they take much more space – maybe twice as much. Somebody has to pay for these extra costs and it has to be the customers in the supermarket. Someone has to tell the customers that it has to be done in this way – there needs to be a demand before you can actually tell the farmers that this is the future and this is how we should do it. This is where the whole industry needs to act together."
While the number of piglets Denmark is exporting has risen from 5.3m in 2008 to a forecast 10m in 2014, the number of pigs the country is slaughtering is falling year on year. The Danes are exporting more and more piglets, mainly to Germany and Poland, but the amount being finished within the country has been decreasing for a decade, so why is this?
There are several reasons. Firstly, strict Danish environmental controls mean high costs for finishing in Denmark. John Howard, DAFC’s UK market director, explains: "We would prefer to see more pigs finished in Denmark, but there are high environmental costs experienced by Danish farmers which are not shared by their colleagues south of the border (in Germany).
This has meant that we see a lack of finishing capacity in Denmark and hence the need for producers to find a better market for their wieners south of the border. There is a Danish law requirement that, for a certain number of animals and livestock produced on a Danish farm, the farmer must either own or have access to a certain number of hectares on which he can then dispose of the resulting slurry. This has created something of an imbalance, because clearly the land requirements for finishing producers are considerably greater."
There are also benefits enjoyed by German pig farmers – for example, the subsidisation of green energy and VAT financial advantages – which lead to a large number of piglets ending up in Germany as opposed to be being finished in Denmark
DAFC’s Merrild says that high labour costs in Denmark also contribute to the problem: "Processing here is more expensive because of high labour costs – we are paying a lot higher than the rest of Europe. We have a system here where there is no regulation of payments – it’s a totally free labour market – but the unions are very strong and we make agreements with them. For many years the slaughterhouses were on their own as an organisation, so the workers were in a very strong position. We still have very high wages, especially in the pig slaughterhouses, a lot higher than in the poultry industry. Foreign workers are also not on lower wages in the slaughter industry."
The financial crisis caused a lot of problems in this field, since Danish farming has a history of low self-financing. Merrild explains: "We have a tradition here that farmers have a lot of debt because they were able to get farms financed. That was a good position for us because it made it a very open business, so young farmers could start farming here without being born in a rich family. You could get financed up to 95% of the value of the farm. Of course that changed after the financial crisis, and a lot farmers now have very high debt, because that was the tradition up until the crash, which gave them the opportunity to invest and develop their farms, buy land and so on. A lot of those farmers are now locked in a situation where they cannot finance new stables, so the farmer who’s producing his own piglets and would have a good opportunity to finish them on his farm, won’t be able to finance that."
Another reason is that the Danish pig industry is the victim of its own success. Karsten Flemin, market analyst at DAFC, adds: "It’s because we have a lot of success with our piglet exports; they are in good demand from Germany and Poland, so there are fewer to be slaughtered in Denmark. We are extremely efficient at breeding piglets, we have probably the lowest production costs in Europe for producing them."
The Russian ban
Porcine Epidemic Diarrhoea Virus (PEDv) has had disastrous effects in the US, which means opportunity for Denmark. It is estimated that US pork output could be cut by 7% in 2014, while it is reported that the virus has killed over 7m piglets since its detection. Flemin says: "It’s killing a lot of pigs in the US and that means we don’t see the US as being as big a competitor as normal in the export markets, as US production will go down."
Another positive is the stable or slightly declining pig production in Europe, and there has also been a good start to the barbecue season in Europe. Flemin says: "The weather is totally different to last year when we had a cold and wet springtime. This year we have excellent weather in Europe and that means a better demand situation for meat."
However, the increased price projections have been undermined by Russia closing its market to the EU. The Russian ban on EU pig meat was imposed following the discovery of African Swine Fever (ASF) in wild boars in Lithuania and Poland. The EU common export certificate means that the ban applies to all countries within it. This has been a real blow to Denmark since, due to the above factors, if Russia were open, it would be an excellent year for pig producers, with pig prices 10-15% higher. Flemin adds that the political scenario with Ukraine has complicated the situation even further, causing more barriers to finding a solution.
Preventing African Swine Fever
Denmark, relatively speaking, is not far from Poland, where ASF was found in wild boars. And with 2.5m out of a total of 10m exported Danish live pigs going to Poland, a lot of transporters are going in and out of the country, which causes a real risk. If ASF were to be found in Denmark, the damage to the pig industry would be huge, so there are a number of measures being put in place which, the DAFC hopes, will make sure it does not become a Danish problem.
Around 22,000 transporters come across the border each day. As part of the Danish Transportation Standard, Denmark runs day and night safety wash border stations, which disinfect the trucks. Bent Nielsen, head of department, SPF & Pig Health at DAFC, tells GMN that a lot of money has been spent on this. "Every truck has a risk of bringing these germs back, and this we do not want, so the border stations are a primary barrier."
According to Nielsen, washing and disinfecting at the borders has increased tremendously, with the station employees taking drivers’ boots and disinfecting them, as well as providing them with disinfected clothing that can only be taken out of a bag when they get to the farms. Inspections are also carried out to check that all trucks are disinfected and cleaned properly. He explains: "With the Danish Transportation Standard, there are washing and disinfecting stations on our border, so that all the trucks that come back from Europe and Russia which have been transporting pigs have to go through this system before they are allowed to go further. And if they come from a high-risk area, such as Poland, they would get a red certificate, which means they have to do the washing and disinfecting and then wait 48 hours in quarantine before they are allowed to come near Danish pig farms."
Denmark is also using SPF trucks, which are easy to clean, and have an air filtering system, taking viruses and bacteria out of the air. The DAFC has produced folders and posters and all drivers receive information in many languages at the border stations, focusing on how to prevent ASF entering the country. A roadshow is also currently holding free disease-control seminars about implementing biosecurity around the country to make sure as many people as possible get in contact with the veterinarians in the industry, to learn to prevent exotic diseases from coming into the Danish pig population.
The marketing team at DAFC has been analysing consumer behaviour, looking at how shoppers make decisions when they buy meat. It found that consumers were more likely to buy a product if the cuts were of equal size in a packet, while they have also found that consumers want cooking instructions on the labelling. Hanne Castenschiold, DAFC’s chief consultant, says she is in dialogue with the industry about working on these areas.
Nutritional promotion is central to Danish pork marketing, with protein amounts and other benefits clearly presented on packaging labels. DAFC has also participated in working groups which reformulated the official government dietary guidelines. Meat was formerly not mentioned, but ‘Eat lean meat’ has been brought in as a part of the guidelines. Castenschiold says: "We think this is a result to be proud of, because saying you should limit your consumption of meat, as recommended before, was not a good promotion for us."
Promotional materials also compare how much energy and protein one receives from meat to what one receives from other sources – for example beans.