The pigs flock to Danish Crown
It has been less than six months since Danish Crown presented five initiatives that were to ensure the group had more pigs for slaughter in the 2025/26 financial year. This has been successful, so the group expects to be able to slaughter what corresponds to 9.4 million pigs on an annual basis during the coming year. Therefore, Danish Crown's board of directors has decided that both existing and new suppliers must now have the green light from Danish Crown Ejerservice before they can expect to have additional pigs slaughtered.
"It has been fantastic to see the interest that has been shown in helping to turn the tide at Danish Crown. Many farmers were naturally a little skeptical, but since we raised our settlement price for farmers' pigs to a competitive level at the beginning of May, something has really happened. We are now in a situation where we are so close to full capacity utilization that we need to manage agreements for extra pigs very tightly", says Niels Ulrich Duedahl, Group CEO at Danish Crown.
Specifically, Danish Crown is now activating the so-called stability mask in an upward direction. This means that suppliers can no longer increase their A-quantity - i.e. how many pigs they commit to delivering in the coming year - without approval from Danish Crown's Owner Service.
"In our industry, we are constantly focused on ensuring the best possible utilization of capacity at the slaughterhouses. We now appear to be able to do this for a large part of the coming financial year, and we have therefore asked the board to give us the necessary tools to manage the influx of extra pigs", explains Niels Ulrich Duedahl.
One million extra pigs in three months
Overall, Danish Crown's suppliers have committed to delivering over one million extra pigs over the past three months compared to what the group expected in early summer. They come from both existing and new suppliers, and the agreements range widely. They range from an agreement to deliver a few thousand extra pigs as an existing supplier, to entering as a new supplier with a six-figure number of pigs.
"We have sought out every opportunity to make agreements for extra pigs, and our consultants have been really busy and have been meeting at all hours of the day. I have to admit that for a while we felt like we were sitting with the famous ketchup bottle in our hands, but then we got the first agreements in place, and the last two months things have been going really well", says Søren Tinggaard, director of Danish Crown's Owner Service.
Young farmers continue to have opportunities
The many extra pigs mean that from September 1st it will no longer be possible to enter into agreements on growth supplements and delivery of heavy pigs, while the opportunities to obtain a guarantee of contribution margin and subsidies for renting stables are limited to new, young unit owners. Conversely, the supply of pigs on contract and for establishment bonuses for newly started suppliers are still open, but all agreements are now only entered into on the condition that there is capacity to take in new or extra pigs.
"We have chosen to maintain the initiatives that can support start-ups and young farmers, because we see a wave of generational changes in the coming decade. Therefore, we would like to support those who want to become suppliers to Danish Crown. We are also maintaining the possibilities of delivering pigs on contract, even though this is not relevant in the short term, because it may open up some opportunities to receive pigs from those who do not want to become shareholders in Danish Crown", says Søren Tinggaard.
Closer collaboration with suppliers
The stability mask is locked in an upward direction and Danish Crown will thus have activated the so-called stability mask both upwards and downwards. This means that the group's unit owners must give 12 months' notice if they wish to increase or decrease their annual delivery of pigs.
"I see the step we are taking now as the first step towards a model where we work much more closely with our suppliers to ensure optimal utilization of our slaughterhouses in order to thereby ensure continuous competitive settlement for their pigs. We are currently discussing how best to do this, and it is fantastic that we are now having this conversation based on a great interest in supplying to Danish Crown", says Niels Ulrich Duedahl.
Danish Crown has a total capacity to slaughter 9.4 million pigs per year.
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