Danish Crown may be forced to close more slaughterhouses in Denmark if the supply of hogs doesn't increase.
Landbrug & Fødevarer, a food and agriculture organisation, forecasted hog slaughter for 2014 at 18.6 mill., a nearly 3% decline compared to a year ago. Rising exports of piglets to Germany and Poland are driving herd reductions in Denmark. Profits for pork processing are higher abroad, where German and Polish farmers can pay more for piglets than Danish farmers.
In August, the company announced plans to relocate a pork deboning facility to a Tulip facility in Cornwall, England. Danish Crown has closed 18 pork processing facilities and laid off more than 7,000 workers over the last 10 years.
To mitigate the slide in finished hogs, Danish Crown recently offered to guarantee a margin for each grower based on prices calculated by the Danish Pig Research Centre (VSP). The VSP noted that the pig production in Denmark is on a downward trend, and that the average sow farm will have 1,000 sows and an average finisher will produce 11,000 pigs annually in 2020.
Source: Danish Crown