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A recently built German pig house for 1,850 sows in Neuhaus-Rosien, close to the former border with eastern Germany.
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More expansion is expected. But it’s definitely a case of ‘proceed with caution’. Feeders are already being warned that only the most efficient will survive the coming years of pressurised producer prices and probably above-average feed costs. Even now, the message is: “If you cannot produce slaughter pigs for total costs of well under €1.40/kg slaughterweight, then forget any plans of expansion.”
As this €1.40 may well work out to be the average producer price for the whole of 2010, one can appreciate that there’s not an awful lot of breathing space left for 2011 and the years to come.
10 million weaners imported
At the same time weaners imported by German feeders levelled at approximately 10 million in 2010 with around 3 million from the Netherlands and 7 million from Denmark. In fact, including around a million finished pigs imported for slaughter, every sixth pig ending up on the cutting line in Germany is now one that’s been imported.
But there’s expansion in the German piglet production sector too – as far as unit sizes are concerned anyway. Average herd size is now 110 breeding sows compared with just 75 sows five years ago. Again, this is only half the story because most expansion is taking place where herds have already reached 200 sows and more. In fact advised start-up herd size, at least in the northwest and east of the country, is now a minimum 400 sows.
As the smaller herds sell-off, sow numbers have dipped from 2.4 million in 2005 to an estimated 2.26 million at the moment. The number of farms involved has dropped 30% in the same time to around 20,000, according to Agrarmarkt Informations-Gesellschaft (AMI) estimates. Just ten years ago there were 47,000 sow herds in the country. AMI expects this diminishing trend to continue.
Weaner production disappearing
Another reason for the continuing disappearance of smaller weaner production units in Germany involves management and housing changes pencilled-in for 2013 under the new EU animal welfare directive. These include mandatory group housing for gestating sows and changes to space per pig, slat sizes and trough space. With just 25 months to go before the EU deadline for such significant changes, many pig production units haven’t even got down to planning: an ominous omen that these new rulings will lead to a much bigger bleeding of smaller producers from the sector than so far imagined.
A second hurdle is the difficulty of expansion, even if the capital is available. Especially in the main pig production area of north west Germany, regulations demanding extra field area where pig numbers are increased have led to such a demand for land that it’s almost unavailable at the moment – and certainly unaffordable. This is one reason why there’s no accelerated move to create the ostensibly much more efficient self-contained farrow-to-slaughter systems applied in most other western European countries. Planning permission is becoming increasingly difficult to obtain. Adding a feeding unit to a breeding enterprise might offer production efficiencies – but in Germany it also doubles the red tape, and expense, of getting started.
So we have a situation in Germany tailor-made for an increase in imported piglets. Helping are reasonable prices such as the present ones for Danish weaners at 28 kg liveweight and delivered in batches of 100. The overall average for 2010 was around €45.
If supply from Germany’s two neighbours remains at about the same in 2011 the price is expected to remain stable, although it’s reckoned that the beginning of 2011 will probably see cheaper imported piglets for the first month or so.
The motor for export success
With its pig breeders fighting for survival and a slowly expanding feeding sector, the real silver lining on the German situation shines out from the slaughter and processing branch. This has developed into a very high-capacity, as well as fairly low cost, motor powering a flourishing export trade.
Such a development is crucial in a country where pig meat self-sufficiency has soared from 80% in the 1980s to 110% this year and probably heading even higher. It’s also badly needed because pig meat consumption on the domestic market has slumped from around 60 kg per capita 20 years ago to 53 kg. Slaughterhouse throughput in Germany has increased from 48 million to 59 million in just five years. And there’s still room for a 10% to 15% increase through 2011 and 2012, say the experts.This is fighting talk from a country that has already positioned itself as number two pig meat exporter in the world after the USA. Germany shipped 2.15 million tonnes abroad in 2009. That itself is a 5% increase on the year. The exports had five main destinations last year: Italy, the Netherlands and Poland (74% of exports go to EU countries) and then Russia and Hong Kong.
It looks like this all-important export market is going to have to be expanded even more because it is thought very likely that German slaughtered pig totals will hit the 60 million mark, maybe in 2011 but more likely the year after.
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Source: Pig Progress magazine 27.1
