Wheat Surge Squeezes Pig Breeders in Denmark, World's Top Pork Exporter
Farmers in Denmark, the world’s largest pork exporter, are getting squeezed by a jump in grain prices, the Danish Pig Producers group said.
The country’s 5,000 pig farmers are facing higher feed costs, which may total an additional 900 million kroner ($160 million) this year, Henrik Mortensen, chairman of the producers’ group, said by phone today from the city of Loegstoer.
Denmark, a country of 5.54 million people, rears 27 million pigs a year, feeding each one 200 kilograms (440 pounds) of wheat and barley in addition to soy products. Feed accounts for two-thirds of production costs.
Wheat traded in Chicago, a global benchmark, reached a 22- month high Aug. 2, extending a 38 percent advance in July that was the biggest since 1973. Russia is facing its worst drought in at least a half century and flooding damaged crops in Canada.
“It’s a chaotic situation as many pig farmers are already in debt,” Mortensen said in an interview. “Meat prices will also go up, but there’s always a delay of some months, which means that farmers have to rely on the mercy of their banks.”
The total debt of Denmark’s farmers rose 13 percent to 298 billion kroner at the end of 2008, according to the latest data available from the Danish Agriculture and Food Council.
To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net
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