Danish swine production expert Jacob Rasmussen used a bit of good news to melt the frost off a roomful of Manitoba producers who have been suffering through an arctic winter of depressed prices.
“At the moment it’s tough, but given your level of cost, in the long run you’ll be better off,” Rasmussen said in an interview after giving a speech at the Manitoba Swine Seminar.
“There is room for Canadian pig production in the future.”
In fact, Rasmussen thinks Canadian pig production costs are now the lowest of all the major exporters.
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“You’ll be able to improve that,” said Rasmussen, a member of the Danish National Committee for Pork Production.
“In 10 years time you’ll be on the Danish level of efficiency.”
With the lowest overall cost of production among the major players, improved efficiency will simply make Canadian pig production more competitive. Countries like Holland and Denmark will be able to improve their efficiencies only slightly.
“I don’t think we’ll be able to compete with you or the Brazilians or the Russians in the long run.”
Rasmussen said the National Committee for Pig Production found Canada to have the lowest overall production cost, about 20 percent better than Holland and Denmark, the third lowest labour cost per kilogram of gain, about 30 to 40 percent below Danish and Dutch labour, and the second lowest capital costs, about one-quarter less than Danish and Dutch costs.
These advantages more than outweigh the better efficiency of Danish and Dutch production.
The committee found Denmark and Holland have the best rate of live pigs born per litter, 15 to 20 percent better than Canada, which was second worst. Denmark and Holland also have the best rate of slaughter hogs produced per sow per year, 15 to 20 percent better than the Canadian average, which was second worst among the major countries.
Canadian pig producers are glum because market prices are poor and most are losing money, but Rasmussen said only American and British hogs farmers are making a small profit right now.
“At the moment you’re losing money like every other country is losing money,” Rasmussen said.
Canada, if it can keep its production costs down and continue to increase its production efficiencies, has a bright future as a pork exporter, he said.
His own country’s industry, he thinks, will lose the overseas export business and have to focus on Europe’s fresh meat market. The production base in Denmark will have to shrink so that it is not producing a surplus. Then it will be able to keep the premium prices offered for the fresh meat market, which is expensive for overseas exporters such as Canada to supply.
“In that market you can get very high prices, but it will take a lot of producers to leave the industry before we are there,” Rasmussen said.
“That will have to happen in many European countries.”
