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News 1150 views last update:Feb 12, 2009

Policy measures will increase pig cost price

Costs of policy measures for pig producers will rise in many European countries in the coming years. In the Netherlands, total net costs for policy measures could amount to €0.26 per kg slaughterweight by 2013.

In 2007, additional costs were approximately €0.20 per kg – so this means a €0.06 increase.


These results were made public in the presentation of the scientific report Pig production costs; an international comparison by researchers Robert Hoste and Linda Puister at the Wageningen University and Research Centre's agricultural economic institute (LEI) in the Netherlands.


Build-up
According to the researchers, the €0.06 net cost price rise compared with 2007 will be built up as follows: emission reduction €0.02, living surface area over €0.03 and spatial planning nearly €0.01. This amount is more than in the other countries.


In Germany and Denmark, the costs will rise by around €0.04 to €0.12 per kg; in France costs will rise by €0.02 to €0.08 per kg. The Netherlands therefore not only has the highest costs in 2007, but these will rise the most in the coming years.


Development
In the past, LEI had already studied the development of the production costs for pigs for the PVE and the same method and choice of countries formed the basis of this study.


The current study consists of three parts:


* an international production cost comparison based on the year 2007. Here, apart from the countries mentioned, Spain, Poland, the US and Brazil were included;


* an assessment of the cost increase per country until the year 2013 resulting from social societal demands on production;


* insight into the differences in production costs between primary farms and causes for these variations. The calculated production costs exclude VAT and the costs of production rights.


Cheapest
As for 2007, the cost comparison reveals that, "within Europe, the Netherlands and Denmark were the cheapest pig producers in 2007. After adding the costs of production rights, however, the Netherlands is at a cost disadvantage compared with Denmark.


"France is in a good third position while Germany, Poland and Spain are clearly down the list from the first two countries with around €0.20 higher production costs. The production costs in the US and Brazil are consid erably lower."


EU policy
The report warns for negative effects due to EU policy regarding GMOs and meat and bone meal. "The current EU policy regarding GMOs and meat and bone meal and the lack of Non Trade Concerns in the context of the WTO negotiations negatively affect the production cost development and competitiveness of the European pig sector compared with third countries.


"In Brazil and the US, there tend to be few limiting measures with regard to animal welfare and the environment. At state level and among private parties there is increasing interest in animal welfare. The environment does play a role in the US but few or no cost rises have resulted."


Related websites:
Wageningen University and Research Centre
Agricultural Economic Institute (LEI)

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