Danish pig producers are facing a record low turnover due to the draught and an increasing production of pigs in China and in the US.
The export price for Danish pork is record low which naturally hits the Danish pig farmers hard on their pockets. According to an article from Danish Jyllands-Posten the price on pork is lower than expected and extremely low for the season.
Usually the price on pork peaks around summer and are at its lowest around Christmas. This year however the summer prices are the lowest in 15 years, says Jyllands-Posten.
“The low prices of pork are mainly due to the fact that pig production grows by 2-3 per cent this year in the EU and around 5 per cent in the US. At the same time, our exports to China have been hit by a sharp fall in prices due to an increasing pig production in China,” explains market analyst Karsten Fleming, Agriculture & Food to Jyllands-Posten.
Chinese crackdown on small family farms
China has the world’s biggest pork industry and according to Reuters the country is accelerating the transformation of their industry dramatically in these years. Many of the typical backyard farms are being closed across the country as they can’t afford the cost off the newly made pollution standards. This has made room for China’s new megafarms.
The crackdown on pollution standards on the smaller farms across the country was intensified during 2017. Hundreds of thousands of pig farms where forced to shut down according to Reuters – and therefor opening a more industrialized version of Chinese pig production with these megafarms.
The sharp fall in pork prices to the Asian export market is not only caused by Chinas transformation of their pork industry, but also because the US is experiencing a record high production of pigs, says Jyllands-Posten.
As the market has been flooded with pork and as the prices are at its lowest, the European draught has also added harder terms for the Danish pig farmers. The draught has made cow farmers dispose the production earlier than usual due to the lack of feed.
The grain harvest will become the smallest in 42 years due to draught which means the pig producers needs to buy extra amount of feed for their pigs.