Eye On Europe: Dutch hog raisers face a battery of new 'political' costs

Tuesday, June 2, 2009

New environmental, animal welfare and consumer protection charges are costing producers in the Netherlands their position at the head of the European efficiency table

by NORMAN DUNN

Pig farmers in the Netherlands reduced their production costs until they were the lowest in Europe. But the advantage has been lost in just two years through new environmental, animal welfare and consumer protection expenses.

Up until 2006, Dutch farmers, producing some 25 million weaners and hogs annually from the country's one million breeding sows, stood proudly along with Denmark at the peak of the European efficiency table. Costs for feed, labour, livestock, buildings and equipment worked out in 2007 at the equivalent of C$2.22 per kilogram slaughterweight for both countries. Producers in the Netherlands also paid an additional "hog production licence," adding C$0.08 per kilogram to production costs. This hog production licence is a once-only charge costing C$317 for every slaughter hog space on the farm and C$910 for every sow place.

Now, however, Dutch hog producers are facing even more costs. Recent research by the country's Agricultural Economics Institute at Wageningen University put the annual price of environment protection for hog producers in the Netherlands at 17.4 cents for every slaughterweight kilogram of hog produced. This includes 12.7 cents for slurry disposal alone because Dutch farmers often have to pay crop growers in other areas to take delivery of their hog manure.

Other extras: animal welfare costs, including an increase in pen space per feeding hog to one square metre by 2013 (up eight cents a kilogram); consumer protection, including traceability and increasingly strict veterinary records (4.7 cents a kilogram).

Overall, it's reckoned that within four years Dutch hog producers will be paying around 30 cents extra per kilogram slaughterweight for such "political" costs.

But other European countries won't be far behind in this respect, according to the Agricultural Economics Institute. Danish producers will be paying an extra 20 cents per kilogram for more environmental protection, animal welfare, pork traceability and countryside planning measures. German farmers face around 17 cents for such political charges and France 11 cents.

Britain searches for ways to replace imported soybeans
The "Green Pig Project" in Britain is aimed at using homegrown protein sources in hog feed instead of imported soybeans. It is estimated that each year around 300,000 tonnes of soybeans are used in the United Kingdom as feed for growing and finishing hogs. With prices for this feed protein source reaching the equivalent of C$590 a tonne this March, there's now a push to become less reliant on soya input.

But price is not the only important factor in this argument. There are environmental aspects to consider, too, according to Scottish Agricultural Colleges (SAC). This advisory, educational and research organization is participating in the C$3 million Green Pig Project along with the British government, research institutes, feed companies, plant breeders, crop growers and swine breeding companies.

A first year of testing for the best types and varieties of peas and beans for growing and fattening hog feed is now being completed. Co-ordinator is SAC scientist Dr. Jos Houdijk, who explains that it is still too early to talk about the best alternatives for replacing some soybean in the rations. "We are looking at the nutritional aspects currently and we will probably start hog feeding trials after the next (2009) harvest."

His view is that local sourcing of hog feed protein may be more environmentally sound and offer more supply reliability, but he warns that the somewhat lower nutritional value of most temperate legumes, compared to soybean meal, means a straight exchange between soya and homegrown crops may not be possible.

"We are also looking at interesting work on feeding pulses in Canada and hoping that we can learn from, and contribute to, the findings with our British project," adds Dr. Houdijk. "Self-reliance of feed protein is only one of the aims. There are possible climate warming factors from global transport, and environment arguments because of rain forest destruction."

Dr. Houdijk agrees that there's no doubt about the advantages soybeans offer as a feed protein source. "But, with any feedstuff, where there are inefficiencies in feeding there's always plenty of N and P lost to the environment, which means we are also importing pollution."

'Our pork is healthier than chicken,' says the Italian heavy hog industry
The Gran suino padano, the heavy hog of northern Italy, has never represented a problem as far as selling its prime product of ham. From Parma to San Daniele, the gourmet joints with protected designation of origin have established a name all over the world. But what about the rest of the hog?

To earn a better income from the whole carcass, a consortium including 20 top processors and some 800 Gran Padano hog producers has run a high-pressure campaign to promote the meat from the rest of the hog and secure the same premium as the famous hams. This covers a long list of quality ware from the heavyweight swine, which are slaughtered at up to 160 kilogram liveweight.

Apart from the famous cured hams, products highlighted in a C$3.17 million campaign this year include salami sausage, belly of pork, mortadella and fresh pork cuts, making this label the first protected designation label for fresh meat in Europe. The strategy includes a transparent production policy with welfare-oriented production for quality assurance through full traceability.

First, the hogs have to be guaranteed as born in Italy. This may sound obvious, but in the past a trade had developed with heavy hogs from other countries being sent south to Italy for slaughtering and processing.

Next, the Padano swine have a guaranteed diet, with the main ingredients cereals, maize, alfalfa meal and sunflowers from the Po Valley, along with dairy byproducts. Control methods used by the consortium include special tattoo identification of every hog, backed up by over 4,000 spot checks per year by an independent agency.

The breeding and feeding of the heavy hogs have also been redirected towards producing less carcass fat and saturated fatty acids in the meat. In fact, some of the consortium members are now proudly declaring that their pork products have less cholesterol content even than poultry meat.

One of the biggest processors in the Consortium Gran Suino Padano (GSP), the international Levoni organisation, has published the table on page 51.

And does launching a premium label with assured quality work on the Italian market? Going by current GSP predictions, it certainly does. During 2009, the organization expects to sell some 60,000 tonnes of fresh and processed pork products. This represents a tripling of the 2007 sales and would mean fresh meat cuts from GSP hogs reaching a domestic market share of 12 to 13 per cent.

German working group pushes early treatment for lameness
It used to be that foot problems and resultant lameness in breeding sows was the second most common reason (right after infertility problems) for sows leaving the breeding herd early in European herds.
Now, according to a new German federal working group specializing in the problem, it has become probably the main reason for early slaughter of otherwise high potential breeding animals.

Last year, it was estimated in Germany that the financial penalty for sow lameness equalled on average C$116 per sow and year with sow culling rates for this reason running from five to as high as 30 per cent per herd. In Denmark, things are no better. In 2005, an estimated 72 per cent of sows culled from Danish breeding herds were culled because of foot problems.

The German expert group, based at the Boxberg Swine Research and Educational Institute in Baden-Württemberg, wants more attention nationwide paid to establishing a standard system for identification of lameness problems and their seriousness. Management influences are also to be examined, including the effects of different feed rations, housing designs, foot treatment equipment and the use of "sickbay pens" for treatment on-farm.

The Boxberg working group stresses that there's more than the early loss of sows to consider. Foot problems and lameness reduce fertility and also often lead to more piglet deaths through overlaying in the farrowing pen.

More help is also coming from a leading farm magazine in Germany, SUS. The publication has teamed up with animal health advisers and vets to produce a pictorial foot problem prognosis chart for use by farmers and stockpersons so that a whole range of problems leading to lameness can be identified early. The German experts advise that early treatment of overgrown horn, and especially scrapes and cracks in horn and ball, is crucial in avoiding secondary infections, including streptococcus. Special "sock" bandages should also always be available for injured feet.

For every sow culled at gestation day 100 because of foot problems, the net loss to the business when applying 2008 prices in Germany was the equivalent of C$888, even after the feed saved was included in the calculation.

Hog producers' price on the retail label?
Typical of the widening gap between hog producer income and store prices for pork is the situation in France, where in early 2009 farmers were getting an average of C$1.98 per kilogram slaughterweight (killing out 79 per cent and 56 per cent lean meat). Medium-price stores were selling, for example, a kilogram of pork chops for the equivalent of C$10.72 and a pork joint for C$12.54 a kilogram.

As always, processors and the trade point to increasing overheads, but the history shows a progressive trend with retail prices for pork rising continually over the past 16 years by 16 per cent for pork roast and as high as 26 per cent for loin of pork, while producer prices per kilogram slaughterweight have fallen by almost 30 per cent in that period.

Even consumer protection organizations are calling the situation "ridiculous" with the French "UFC-Que Choisir" pointing out that the store price had less and less connection with the price producers receive.

A similar situation in Italy has led to Guiseppi Politi, president of the Confederazione Italiana Agricoltori, the country's farmers union, calling for the producer price paid per kilogram to be printed on every pork product label alongside the retail price. BP