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Germany’s Top 25 Compound Feed Producers

Tue, 01 Jun 2010 14:40:00 +0100

Top Ten’s Market Share Is 55 % -- Medium-sized “Pig Specialists” Are Developing Well – Northwest Germany Grows, Central Germany Stagnates, and the South Reports Losses – Top-ten Enterprises Located in Northwest Germany

Pig keeping is and will remain by far the most important sales market for the German compound feed producers. This is the conclusion of the latest evaluation undertaken by the ISN Interessengemeinschaft der Schweinehalter Deutschlands e. V..

In 2006, the ISN had first studied the structures prevailing in German pig feed production. Ever since, compound feed production has increased by 9.6 % throughout Germany, adding up to 8.92 million tons. According to information issued by the BMELV (Federal Ministry of Food, Agriculture and Consumer Protection), the number of production companies went down at the same time by 8.6 % (back to 330 companies).

The upgrading companies are looking back on two years of high prices to be paid for raw materials. Many farmers benefited from the phase of high prices, selling the crop they harvested instead of mixing feed themselves. For this purpose, the fattening places were expanded vigorously in number all over Northwest Germany. The structural changes observed with regard to the pig-keeping farms, also have effect on the use of compound feed: At the major farms, producing their own food often ties up too much capital and manpower, thus making complete feed purchase much better fit in to the company organisation.

How could the compound feed producers use this trend for themselves?

Over the past three years, the top-ten feed producers increased their total tonnage by 12.5 % to producing 11.5 million tons of compound feed. This way, they succeeded in achieving a 55 % market share for themselves. Looking at the Top 25, you find that they even reached a market share of 70 %. Compared with other agribusiness industries (such as agricultural chemistry, slaughtering), the degree of concentration proves to be comparably low. So, intense competition is still observed in the compound feed sector. This kind of competition represents one of the locational factors so favouring the northwest of Germany.

Based on company information, the analysis made by the feedstuffs industry shows that in 2009 more than a million tons of compound feed (for all kinds of animal species) were produced by the Top Five companies each. Among them are Deutsche Tiernahrung Cremer, Düsseldorf (2.3 million tons), Agravis Raiffeisen AG, Münster (2.17 million tons), Bröring group of companies, Dinklage (1.3 million tons), Mega Rechterfeld (1.1 million tons) and For Farmers Group, Lochem / NL (1.04 million tons.)

In the following, you find a detailed analysis of the developments in the field of compound pig feed.

Since 2006, the production of pig feed has increased by 784 000 tons, having gone up to 8.9 million tons. The ten biggest companies alone were able to expand their total production by as much as 444 000 tons.

Agravis and Deutsche Tiernahrung Cremer were able to maintain their year-2006 top positions in ranking at moderate growth. The Bröring group of companies is approaching the first and second places. Bröring were able to increase their production of compound pig feed by 25 % (up to 650 000 tons) over the past three years.

The Dansk Landbrugs Grovvarelskab (DGL) increased their share of the fourth-placed Raiffeisen Agricultural Association Nord AG (HaGe) at Kiel from 70 to 100 %. Having sold an additional 15 000 tons of pig feed, the HaGe Kiel also grew slightly. They are still on course for growth and call attention to themselves by performing takeovers (e. g., Roth Landhandel).

The Bela mills, ranking fifth and having been taken over by the Dutch For Farmers group, were able to increase pig feed production by 4 %. Bela are running production facilities at Langförden (near Vechta), Hamburg and Rees / Lower Rhine. Moreover, the Dutch company is active on the German market from its headquarters at Lochem / NL.

Above-average growth is reported for GS Agri / Schneiderkrug and for the Fleming & Wendeln Group / Garrel, ranking 6th and 7th on the list. GS Agri from the Oldenburger Münsterland (Northern Germany), including LBG Garrel and Landwehr, could increase their pig feed sales by nearly 46 % (up to 350 000 tons). The situation is similar for the Fleming & Wendeln group (including Leikra), whose production could be expanded by 45 % (up to 315 000 tons).

Quite a few companies are found ranking 11th to 21st which can be named pig-feed specialists as well. To mention a few: RWG Grafschaft Hoya (68 % share of pig feed), Strahmann GmbH & Co. KG (85 %), RWG Ankum (83 %), Kohnen / Sögel (including Eirero, 85 %) and Diekgerdes Landhandel (90 %). These five companies achieved a 152 000 tons’ increase over the past three years.

It remains to note that those companies which are based at the northwest German region were able to well expand their pig feed sales. The northwest German pig keepers’ investment activities, related to the building of new fattening houses, supports the good development of the compound feed industry established there. Comparing their growth rates with those of the Northern- and East German compound feed producers, one finds that growth there has been just moderate or even stagnating. Feed producers in Southern Germany even had to cope with quantitative losses during the last years. RKW Süd, for instance, lost their position on the Top-Ten list.

For 2010, the Deutsche Verband Tiernahrung (DVT; German pet food association) expects consolidation at a high level as to compound pig feed production. Further expansion of fattening farms and the industry’s orientation towards exports are intended to support the developing.

EU Pig Prices 2009: Spain Is Pulling Up Again

Mon, 25 Jan 2010 13:00:00 +0100

Price level reduced by 8 % throughout the EU -- Germany minus 10 % -- Difference in payment EUR 16 per pig -- Fluctuation margin increases -- Poland hit by 26 % currency depreciation

In 2009, the quotations lagged far behind the previous year’s prices in the six most densely pig-populated EU-27 countries. Compared with the year before, the prices in Spain, Germany, Poland, the Netherlands, France and Denmark fell by 4 to 11 percent which equals 6 to 16 cents less than in 2008. 68 % percent of all pigs raised in Europe in 2009 were held in these six countries. The 2009 summer months’ high turned out to be about 10 cents lower than that of 2008. Taking all countries into consideration, the calculated average price amounted to EUR 1.36 per kg slaughter weight in 2008 whereas it was EUR 1.47 per kg slaughter weight the year before. It is true that the pig feeders were sort of relieved by lower feed costs. However, the price decline could hardly be compensated for by those.

In comparison with the previous year, the difference between the corrected German and other quotations halved. Spain is an exception, with the difference towards Germany having increased by 8.5 cents there in 2009. Yet, reporting minus 4 %, Spain presents the least change in price as it comes to comparison with the other countries.

In 2009, the German quotation floated around rank 2. Having decreased by 10 % compared to the year before, the price proved to underachieve. With a monetary recession of 14.5 cents compared to 2008, the 2009 payout price per fattening pig at an average weight of about 94kg went down by more than 13 euros.

Poland had made it to rank 1 in 2008. But in 2009, Spain was able to recapture the leading position in Europe, relegating Germany and Poland to ranks 2 and 3, respectively. The German and Polish quotations are close on each other’s heels, showing a difference of no more than 0.4 cents. As a result of the financial crisis, the Polish zloty lost 20 % in value over the last year, compared to the euro. This can be taken as an explanation for the shifting to rank 3.

The Polish quotation was the one to lose most with its 11 % decrease. Had Poland still led during the first few weeks of 2009, the Spanish started a catch-up race. The Spanish corrected quotation passed, and until autumn it clearly remained in the front. In autumn, the Spanish quotation fell harder than the other five quotations. The seasonal decrease, which is typical for the country, however wasn’t as significant as it had been the years before, when Spain often brought up the rear.

In respect of European quotations, Germany continues to hold the lead. Just like over the previous years, the Dutch quotation in particular was geared to Germany as the leader. The Dutch corrected quotation still is moving about 2 cents below Germany’s. This way, the Dutch slaughter companies make sure their slaughter hooks are operated at full capacity and exports of Dutch pigs toward Germany are kept within limits as regards quantities.

In 2009, the French had to make do with maintaining rank 5 on the list, just as they had to in 2008. In the course of the year, it became ever clearer that France in particular as well as Denmark were the ones to draw the short straw during the summer period of high prices. There, they were able to profit only little from the booming demand. Relative to the comparison countries, France even brought up the rear from September to mid-December 2009.

Traditionally, Denmark brings up the rear in the European price structure over the remaining time. There, the corrected quotation fell short of Germany’s quotation by as much as 7.6 cents. This was by even 16.9 cents below the Spanish leading quotation. Thus, the payout price per fattening pig is by almost 16 euros lower in Denmark than it is in Spain. So, the difference between the comparison countries’ highest and lowest price levels has once again become more significant, compared with the year before. The tough influence the Danish group of slaughter companies, Danish Crown, exerts on prices paid to the producers bound by contract continues to be strongly debated. The Danish krone / Euro exchange rate remains steady; so the financial crisis is noneffective here.

In 2010, the German self-sufficiency is most likely to achieve 110 percent. This way, export will be more important than ever. The pan-European pig production is supposed to get to a high level this year. Germany as a net exporter depends on exports towards third countries. Most presumably, there will be fewer exports towards Russia in January than there were the months before. But then, they are expected to get back to their previous level from February on. It appears most likely that the increased consumption in Russia cannot be met by domestic production.

Discount Chain Stores’ Price Offensive: At Times You Win And At Times the Others Lose!” - A comment by ISN Board Member Carl-Josef Detert, ISN market commissioner

Mon, 26 Oct 2009 12:02:00 +0100

“The 2009 price offensive is going on!” was announced from the Aldi discount chain stores recently, and the prices were reduced for the tenth time this year. Now at last, the price offensive has finally reached the pig industry.

The information has barely become known, and the major Aldi competitors follow right away: the Lidl, Netto, Penny, Norma and other discount chain stores are also taking their advantage! At one go, fresh pork is sold by 3 to 7 percent cheaper at all discount shops. Aldi leads the way and all others start to run after them straight away. The prices being almost identical, the question suggests itself whether or not price arrangements have been made in advance.

The consumer is expected to laugh last, and he is supposed to be grateful! The prices are going down by as much as 3 percent for minced meat and by no less than 4 percent for chopped pork. Bratwurst, schnitzel and smoked pork chop are reduced by 6 percent; the minute steak and goulash prices are reduced by 7 percent. Altogether, the average consumer may expect savings to level off at below 6 percent. But that is only half the truth. Given a price of 1.35 euros per kg pork, the pig keepers are currently paid about 120 to 130 euros per pig for slaughter. Since the end of August, the producer price has been reduced by more than 13 percent by the slaughter industry! Is it just one half thereof which is forwarded to the customers and is the other half thereof being put in the slaughter industry’s own pockets?

Again the pig keeper asks himself: Will the slaughter industry indeed be unable to enforce higher (or at least unchanged) prices towards food retailing? The slaughter companies again and again emphasize their need to restructure their enterprises and to increase productivity in order to have more to bring to bear towards food retailing. Well then, restructuring is in full swing, and concentration is proceeding. Meanwhile, the three “Grandees” (Tönnies, Vion and Westfleisch) have achieved a 51-percent market share. Isn’t that enough to be brought to bear? How far do we still have to go with concentration? A ranking was made up of the 100 largest German food retailers in the “Lebensmittel Zeitung” (food retailers’ magazine). Among the “Top 100”, 9 meat processing companies are found. While the pig keepers hope for the export of live pigs and while fierce competition prevails among the livestock traders, the Vion Food Group went up to rank 2nd on the table with its 8.6 billion euros turnover. According to their own statement, Vion “plays the leadership role in Europe”. Is that to be embodied every now and then by announcing “internal prices”? Yet, the effect of it leaves a lot to be desired towards food retailing, but it does not towards us the pig keepers!

The farmers’ proceeds have been on a very low level for a long time. Over the past years in particular have the producers’ prices been dreadfully low. Just did things seem to get better again (one had not yet recovered from the financial disaster), and now prices are falling again!? It remains a mystery to us that the producers are given such a small share only; the money obviously is earned at the following levels of the value chain!

This is also proven by the “The 300 Richest Germans” ranking which was published by the “manager magazine” last weekend. Owning about 17 billion euros each, the Aldi founders Karl and Theo Albrecht share the top position. Dieter Schwarz, founder of Lidl, follows with his 10 billion euros’ assets, thus ranking third. “Lidl is worth it” is the advertising slogan; and this certainly applies to Mr Schwarz! In view of such figures, the name of the Aldi pork brand “Bauernglück” (Farmer’s Luck) is given quite a different nuance. Where then is it found, this kind of luck? We the pig keepers are still in search of it! By the way: Compared to last year, the “Tönnies Group” advanced to the 176th rank in the 2009 list, with its 550 million euros. Money can obviously be made with meat. The Risken family as owners of the Stockmeyer establishment hold a tranquil 143rd position with its 650 million euros. How pleasing an information: them all being so well off!

The food retailing’s market power and the ongoing concentration in the slaughter business together with the pretended helplessness towards food retailing make it increasingly impractical for us the piglet producers and pig feeders to get our piece of the pie. The uncountable terminations of business in sow husbandry make this plain to see! But don’t forget about one important fact: No pig keepers, no pork!

Freebie European Economic Stimulus Package: Do NOT Launch the Ammonia Guide!- A comment by ISN Board Member Philipp Schulze-Esking

Thu, 04 Jun 2009 16:58:00 +0100

Something new is coming again for the pig keepers, after they already had to cope with the so-called “Animal-Welfare Technical Control Board” and the “Mexico flu”. This time, the horror shows up in the form of a so-called “guide for the detection and evaluation of nitrogen deposition”.

What sounds so cumbersome, complicated and very much like bureaucratese, lives up to its promise: The “guide for the detection and evaluation of nitrogen deposition” (also called “ammonia guide”, as a moniker) is meant to “sweeten” the ready-to-build-and-invest farmer’s life when it comes to issuing future building applications. Apart from the Federal Immission Control Act, the Technical Instruction on Air Pollution, etc. the guide’s requirements would have to be fulfilled in future in the case the guide were put into force.

Remaining as it is currently, this provision would lead to a building freeze with regard to piggeries all over Germany. The provision serves as no more than just a regulatory control instrument of structural policy which is by no means practical.

From the pig keepers’ point of view, even the revised version of the draft guide is quite an absurdity, for various reasons. There is, for instance, no justification for evaluating forest to the extent it is (over-) estimated. The “initial level of pollution” is overvalued by 100 %. Accordingly, the corresponding “initial-level-of-pollution map” is exceedingly questionable, all the more because just one single measuring is taken as a basis for the whole of Germany! Beyond that, “humus stipulations” and “nitrogen-indicator plants” are going to play a major role when it comes to the decision on whether or not putting up a building will be allowed for.

What’s most distressing is the fact that as the next step to be taken every time the approval is refused, a case-by-case review is to be carried out according to the ammonia guide, in the form of a yearlong individual measuring performed at the respective farm. The farmer would be forced into paying for the costs caused by determining the “initial level of pollution”, which would amount to approximately 50 000 euros. That’s quite a substantial amount which is indeed suitable to nip every piggery-building application in the bud! It seems as if all those farmers were to be victimised who installed “biotopes” on their farms over the past years. Mostly concerned are the upgrading farms – almost 90 % of all farms would produce negative inspection results and would then have to undergo the expensive individual measuring!

Nowadays, with the financial meltdown and the emergency chutes for banks visible to the naked eye, such a monstrous bureaucratic thing as a freebie economic stimulus package would not be an easy thing to introduce. We, the pig keepers, do not demand money to be donated by the state – but then again we do demand not to have obstacles be thrown in our way! There needs to be a level playing field for everyone!

“Heavy is the head that wears the crown.” - A comment by Paul Kathmann, ISN Board Member

Fri, 13 Mar 2009 08:41:00 +0100

In the future, the farmers no longer will be spoilt for choice with regard to the “Animal Protection Control Board”.

Through an amendment to be made to the Animal Welfare Act, introducing test and licensing procedures is intended to be rendered possible relating to serialised housing equipment. In the course of conducting such procedures, the housing equipment is to be tested for animal friendliness. So far, however, there is no such thing as a definition of the term “animal friendliness”.

First of all, the project is contradictory to the German government’s promise to phase out bureaucracy and to convert EU laws in a one-to-one way. Moreover, it tops off the Pig Keeping Decree which exceeds EU laws anyway. Expert knowledge almost falls by the wayside throughout all this discussing. Would this possibly be due to the fact that the issue of the “Animal Protection Control Board” is one of the last few unanswered questions from the coalition agreement which still needs to be dealt with somehow or other?

Some scientists and animal rights groups refer to Swiss models, disregarding the fact that Switzerland is not a member of the European Union and that the Swiss wall off their market. However, livestock husbandry in that country of importation cannot be compared to German or global livestock husbandry, taking into consideration the Swiss special agricultural subsidies policy and the wage and salary standards.

Being enacted as a national solo-run, the “Animal Protection Control Board” is going to further vitiate our farmers’ competitiveness.

If test and licensing procedures were established, the medium-sized stable setters in particular were made unable to field innovative products in a swift and down-to-earth way. With the conditions varying at the individual farms, it is almost impossible to set up stables in just one and no other way. Standardisation is a counterproductive thing to consider.

Furthermore, the costs resulting from any kind of test procedure will have to be borne by the German livestock keepers. Thus, the investment costs will continue to go up and burden the business situation.

The German economy is called to exert pressure on the politicians to avoid word like: “Being faced with a Hobson’s choice makes your life a misery.”

“MADE IN GERMANY” - GERMAN PORK IS SAFE!A comment by Philipp Schulze Esking, ISN Board Member

Thu, 11 Dec 2008 12:11:00 +0100

Over the past years, the food industry has been beleaguered by a series of crises every now and then, such as BSE (bovine spongiform encephalopathy), Nitrofurans, Nitrofen, MPA (Medroxyprogesterone Acetate), and acrylamide. The crises vary in terms of the causes, the causers and the hygienic evaluation.

Both sloppiness and criminal activities are grouped under the umbrella term “crisis” as well as are latest scientific findings. The public does not differentiate – in most all cases, crises are being perceived as “scandals”.

Once again it’s the Irish mixed-feed industry that becomes an endangerment for others! Apart from the consumers, the pig producers are the ones who suffer most! In the worst case, bitter loss of income has to be coped with, like had happened back in 2002 for instance, when the synthesised hormone MPA (Medroxyprogesterone Acetate) had been detected at three sow farms in the Dutch Brabant region. As a consequence, 29 farms located in 6 provinces had been closed by the authorities in charge. An MPA-contaminated feed constituent had been purchased and fed. At that time, the Irish branch of a US pharmaceutical enterprise had supplied hormone-contaminated molasses. At the worst, the stables are left vacant in such cases. This means that no income is generated while the fixed expenses continuing to accrue.

Quite obviously, the people do not know how to guarantee high Western European standards over there on the Emerald Isle! Although Ireland is kind of a “midget” among the pig producers, it’s for the whole of the European pig market now to be threatened by the Irish carelessness! So the question arises: Don’t the Irish have any kind of quality management which might make them keep themselves under surveillance?

This case clearly reveals that the QS System (German quality assurance system) does an excellent job! Using this seal of quality, German pork is labelled – i. e., it is approved that the piglets are undergoing the whole process of being produced, raised and fattened in Germany. In addition to that, there is the “Verein Futtermitteltest (VFT) e. V.”, an association carrying out tests and control very regularly with regard to all kinds of mixed-feed sorts.

German thoroughness secures success in export! Maybe the Vikings’ offspring on the Emerald Isle better learned this lesson from the Germans!

Castration of Piglets – Sheer NGO Activism? A comment by Franz Meyer zu Holte, ISN Chairman

Tue, 07 Oct 2008 17:09:00 +0100

Currently, aggressive campaigns are being run again by so-called animal-rights activists, this time on the subject of the castration of piglets.

It has been for a long time already that the German pig keepers regard animal protection to be a very serious topic. However, it is unavoidable that conflict arises in this connection concerning other protective interests, such as consumer protection, environment protection and labour protection.

With regard to the castration of piglets in particular, we are very carefully observing development and research in the neighbouring countries. At the end of 2007, we held an experts’ workshop at Bonn (North Rhine-Westphalia) at the initiative of the “Deutsche Gesellschaft für Züchtungskunde” (DGfZ; German association for breeding science). Amongst others, the “Deutsche Tierschutzbund” (German humane society) participated in this workshop. During further talks with experts, we analysed, together with scientists and others involved from the food processing chain, various alternatives to the traditional ways of castrating piglets, then initiating studies on our own (German) account with regard to selective breeding, for instance, against boar smell. The current situation may be summarised as follows:

None of the alternative methods is applicable in practice straight away!

As far as we know, the carbon dioxide anaesthesia as is favoured in the Netherlands proves to be a problem of consequence with regard to animal protection, environment protection and labour protection. The same goes for isoflurane gas narcosis. Both methods demonstrably are not suitable for stunning the animals far enough to avoid them feeling the pain during castration.

The “vaccination against boar smell” (also called immuno-castration) as is propagated by Pfizer is being disapproved of because of the risks related to the vaccination and its effectiveness still being unclear.

The ideal solution to the problem would be to abstain completely from castration, if consumer protection could be granted for as a result of breeding- and / or technical methods (protection from foul-smelling meat). Research was initiated correspondingly.

What we think to be the most effective and most favourable short-term solution is pain therapy. In collaboration with other associations from the industry concerned, we called upon the pharmaceutical industry as well as the authorities to set up immediately the preconditions needed from the technical and lawful points of view to allow the pig keepers to apply pain killers as a matter of routine. Pain killers are already used in part, but according to the drug laws prior rededication of drugs is required for this purpose. Therefore, we are keen to find solutions to the problem which do not only work as an alibi but have sustainable effect with regard to all kinds of concern (animal protection, environment protection, labour protection).

We would very much welcome to be given credit for as well as to-the-point support in our efforts by those organisations to which animal protection is really meaningful. Emotional activism of a kind that we experience every now and then does not come up to the matter of concern but, to my mind, does only lead to “wannabe-solutions” which in truth do not at all serve animal protection.

It would be very unfortunate if the recent campaigns were conducive to such kind of “wannabe-solutions”.

Duesse Product Testing? That Looks Like Being a Butcher’s Party!”-A comment by Carsten Spieker, ISN Advisory Board Member and Piglet Producer

Thu, 21 Aug 2008 17:12:00 +0100

We are red, we are white, we are Danish dynamite!” – Reader of the agricultural special press, you might be subject to such kind of fallacy if you bought into the interpretation given by the “Duesser Mastferkelwarentest 2008” (testing carried out on fattening piglets; note on the part of translator).

But there is no rose without a thorn! For if taking a closer look at the ISN analysis of the testing you will find it backed in a detailed way: It’s a poor comparison, and even the conclusions derived from it are.

So, in many a point the evaluation doesn’t reach far enough to allow reliable and statistically firm information to be given. That is an unfortunate fact, because the North Rhine-Westphalia Chamber of Agriculture is particularly known for its neutrality and objectiveness.

German breeding companies, such as BHZP, Huelsenberger and PIC (just to mention a few), which have done a great job over the past two years truly do no longer take second place to the Danes or the Dutch. This is very clearly supported by the figures accomplished at my own farm. It’s a slap in the face which none of the local pig breeders has deserved to be given.

Comparisons are important, verily, and market transparency is one of the ISN’s ultimate ambitions. However, comparing apples to oranges is not a sensible thing to do. You rather need to compare like with like. In this context, comparing the new Danish sow with the “ancient antecessor sow” (so-to-speak out-of-date German breeding) must be regarded as a crass failure of the method.

The testing personnel at Duesse seriously needs to acquiesce to being asked whether or not taking samples from eight farms raising pigs of Danish genetic origin only holds the same significance as does taking ten times as many samples at least of and including other origin.

All the more, having the Danish descent being evaluated only for gilts up to the fourth litter then does not really contribute to make the conclusions drawn from the evaluation sound believable!

Over-evaluating live-born piglets, thus supporting the Danish descent, is being relativised by hindsight if a closer look is taken into the quantities of those piglets really weaned. Unfortunately, the fact goes under that the Danish are ranking far ahead related to the number of piglets lost in the process.

We as PIC multiplying breeders hold 550 sows at our farm. Per sow and year we achieve as many as 29 weaners. The annual mean amounts to 12.8 live-born and 11.8 weaned piglets per litter. Certainly, this may be attributed to the farm management, too, but it also shows how highly productive the sows of local descent are!

Furthermore, we observe a lack of sow-planner-data evaluation; the data have not been cleaned up. Yet, every practising expert knows about how significantly the data collected relating to losses vary between the individual farms for computing reasons.

All this looks like being an unneeded “butcher’s party” held for the German multiplying breeders. Standard fundamentals and conditions would definitely have been required to be formulated before testing. This, however, was omitted. All the more, the thought hurts that handling the results in a more responsible way would have been beneficial to the whole matter.

Local descent definitely can keep up with that of our neighbouring countries. In practice, the differences are no more than just marginal. They become blurred anyway between the origins tested if you focus on the right boar to be used for achieving the final product!

No Technical Control Board is Needed With Regard to Animal Welfare! - A comment by Uwe Braeunig, dlz agro-magazine editor

Tue, 08 Jul 2008 00:00:00 +0100

Dear pig keepers: Enough is enough! In view of massively increased feed and energy costs as well as of piglet and fattener prices which still are not costcovering, many farmers find themselves in an existence-endangering situation. Yet, they need to cope with even more adversity.

The evil is named “Animal-Welfare Technical Control Board”, or as it is called at the authorities: “Second Draft Amendment of the Animal Welfare Law”. Behind it, the implementation hides of a compulsory test and admission procedure for serially manufactured housing equipment and management systems. As for the industry, this is completely redundant, because as another national solo-run it just has our farmers still more affected with regard to competitiveness after they need to come to terms with the national pig keeping decree by now which already exceeds EU laws. As a matter of fact, this was clearly uttered by the Deutsche Bauernverband (German farmers’ association) and the ISN Interessengemeinschaft der Schweinehalter Deutschlands on the occasion of a hearing before the Bundestag’s agricultural committee held in Berlin on June 4th.

Detlef Breuer, ISN CEO, said this “Animal-Welfare Technical Control Board” was “slowing innovations, increasing officialdom and driving costs”. But, regardless of all justifiable criti-cism and contrary to all its promises to not exceed EU laws, it looks as if the German Federal Government intends to push through this draft law, and at best before going on summer recess.

The bad thing about it is that here expert knowledge falls victim to political argy-bargy; to tell the truth this is one of the last coalitionagreement issues still to be discussed about. The fact is: All costs connected with the test procedures will finally be attached to the German livestock keepers. This alone is enough of a reason to not just accept the intended “Animal-Welfare Technical Control Board”. However, the law still needs to achieve accreditation by both Bundestag and Bundesrat.
So go pedalling on those members of the Bundestag who represent your electoral ward! It remains to be seen whether or not that will be a successful thing to do. But in any case it’s worth the try!

This comment is published in the dlz agro magazin ("Primus" pig) edition July 2008

Photo: Uwe Braeunig, dlz agro-magazine editor

Renewable Energy Sources Act – „Hello, Pig Husbandry“? - A comment by Friedrich Hake, ISN Board Member

Mon, 16 Jun 2008 00:00:00 +0100

”The good and the bad sides” of the amendment of the Renewable Energy Sources Act seen from the pig keepers point of view

Friday the week before last, the amendment of the Renewable Energy Sources Act was enacted by the Federal Government. In it, new reimbursement rates were fixed for infeed for biogas plants as well as for current produced from wind energy, solar energy, waterpower and geothermal en-ergy.

Basically, the pig keepers look upon sustainable utilisation of bio-energy favourably. Even if the amendment was very much overdue – it needs to be looked at in a more differentiated way. For quite some time, the ISN had demanded for making various amendments, which unfortunately were taken into consideration to some extent only. Some success, however, could be achieved.

The ISN, for instance, supported the idea that a so-called “liquid-manure bonus” be introduced, because the floor space required would be limited this way and the in-house organic fertilizers would get improved. Now this “liquid-manure bonus” was introduced. Up to a capacity of 150 kWh, 4 cents per kWh are paid. Up to 500 kWh, 1 cent still is paid per kWh if there is a 30 percent share at least of liquid manure. As a result of the cut-off criterion, there is no bonus for higher performance categories.

Another request was related to a “combined-heat-and-power-generation bonus”. Through this, the facilities’ economy would be improved and the utilisation of the heat produced would be pushed forward, as, for instance, goes for digestate applied in fertilizer production. This way, it was possible to ease the situation with backlog nutriment especially in regions where large numbers of livestock are held. This bonus was raised by 1 cent of late.

In the first place, the drying of digestate was meant to be retained in the “combined-heat-and-power-generation bonus” and continues to be an important issue, as it has been throughout all the discussions. By utilising biogas-generated heat for concentrating the separated digestate, transportable fertilizers will be producible in future which may be brought to regions where nutriment is insufficient.

It’s a satisfying fact, too, that there will be no shifting of government aid from originally me-dium-sized biogas plants to large-scale industrial biogas plants run by institutional investors, as had been for a while before! Such kind of large-scale consumers of primary products and crop require enormous floor space at their sites. On top of that, the large gas-supply plants usually are run by the major power suppliers such as E.ON, RWE and others. Since for biogas plants of this size the “technology bonus” was lowered compared with what had been planned in the government draft and since plant operators were committed to run heat-led combined heat and power plants, additional competition for floor space was averted.

So far so good. Unfortunately, there still is the other side of the medal, even with the amend-ment of the Renewable Energy Sources Act. For the consumers, the costs continue to be on a high level, because ever more money needs to be spent on energy and food.

In addition to that, the pig keepers had always demanded that the bonus paid for renewable primary products be abolished or at least be reduced to a clearly noticeable extent. Now quite the opposite has happened: This kind of bonus was even increased by 1 cent! It’s a pity really that this bonus mostly gets to the landlords in reality instead of arriving at the maize produc-ers! The same thing goes for the feeding-in reimbursement increase.

Make yourselves aware of about what amounts we are speaking: Under certain conditions, a biogas plant using up to 30 percent liquid manure may generate a total increase by up to 4.9 cents per kWh! This composes of a 1.9 cent liquid-manure bonus (new) + a 1 cent bonus for renewable primary products + a 1 cent bonus for maintaining the critical values for formalde-hyde according to the Technical Instructions on Air Quality + an additional 1 cent combined-heat-and-power-generation bonus. Imagine: If you figure that out for a 500 kWh biogas plant, this corresponds to a possible annual additional proceeds of up to EUR 200 000!! It is true that the required investment costs (such as for a new or additional combined-heat-and-power-generation concept: new heating for the piglet house, the residential house, the greenhouse and others as well as for the emission bonus (critical values for formaldehyde)) still need to be paid out of this. Yet, it is an enormous monetary advantage, compared with the livestock im-provement business! It must be admitted that the biogas plant operators have been “deeply in the red” over the last months. First and foremost, the upcoming increases of the reimburse-ment rates will allow them to produce a well-balanced operating profit again.

But in the long run, the fact may not be foreclosed that an increased reimbursement will be reflected in the leasehold market. This will most particularly be the case if the situation does not get better on the primary-products market (maize).

Converting it to the 200 hectares floor space requirement of a 500 kWh plant, this means an amount of up to EUR 1 000 per hectare won through the above-mentioned increase of reim-bursement (without consideration of additional investment needs). That’s quite a motivation for generating power, isn’t it?

But then, where does the feed needed for the pigs come from? – As a matter of fact, competi-tion will persist with regard to floor space! It’s just that further intensification of the conflict could be averted this time. However, with an ongoing shortage of floor space the feeding stuff costs will remain on a high level. The question still needs to be answered: What will we use the farmland for: generating energy or producing nutriment?

Photo: Friedrich Hake, piglet's breeder und pig fattener from Hameln / Lower Saxony and ISN Board Member

EUR 3.3 Billion Spent on Domestic Animals by 23 Million Pet Lovers - A comment by Friedrich Hake, ISN Board Member

Mon, 26 May 2008 00:00:00 +0100

The Germans not only are a nation of 80 million “football coaches” but also one of more than 23 million “animal-welfare campaigners”.

In order to supply their pets’ wants with regard to feed, plaything and other requirements, the German citizens spent more than 3.3 billion Euros in 2007. Turnover in the trade specialised in domestic-animals feed even increased by 0.4 percent, going up to EUR 2.47 billion! Cat food was sold best with an overall EUR 1.2 billion being invested in it. As for accessory etc., an increase of 1.3 percent was noted (up to EUR 859 million).
Altogether, 23 million domestic animals are being held in Germany; among them, there are 7.9 million cats, 5.3 million dogs and 3.4 million aviary birds.

In the supermarkets, three times as much space is needed meanwhile for placing pet supplies as is needed for babies’ demand. In view of the huge amounts spent by the people for their beloved quadrupeds’ welfare, you’d think the animals’ luckiness might be of quite some value to the Germans. In terms of these figures, you might also reason that there were about 23 000 000 potential animal-welfare campaigners in Germany. That would be more than a quarter of all German citizens. Compared with such quantities, the number of 79 000 German pig keep-ers looks rather smallish; and the pig keepers are often scolded by diverse so-called animal rights groups.

Professor Poresky from Kansas / USA states that (domestic-) animal keepers performed better as human beings than those do who do not hold a pet. That, however, needs a more differenti-ated look to be taken at. If you discuss with a cat owner about the songbirds hatching in his garden, you will soon find out about how far animal protection goes, as a matter of fact. Only recently, the State Advisory Board on Animal Welfare handed in a complaint at the Baden-Wurttemberg Ministry of Food and Rural Areas about considerable “deficits being observed in domestic animal keeping”. Very often, small and low-priced rodents, birds or peregrine animals such as reptiles are being purchased without prior consideration and are not being held appropriate to the species. Both veterinarians and owners of animal shelters often file complaints about observing “animal housing contrarious to animal welfare and about bad care” with regard to domestic animals.

According to a most recent scandal reported about regarding cattle owned by the German So-ciety for Nature Conservation (NABU), 12 heads of cattle so far have perished in mud in three different East Frisian nature protection areas as a result of misinterpreted love of animals. This clearly shows that so-called “animal-welfare campaigners” do not necessarily have the expertise which is needed if it’s about adequate animal husbandry. It remains a sensitive thing to do anyway to try and find out what makes them be qualified for the job. Love of the animal alone certainly is not enough. It is not for nothing that there is an apprenticeship as animal keeper during which the apprentice needs to sit exams by the passing of which he then may definitely substantiate the expertise he gained in animal protection. At all this, the NGO’s political importance and relevance, respectively, still appears to be questionable.

All-too often farmers are the butt of diverse self-styled animal-welfare campaigners’ offence. For instance, let’s talk about the latest discussions about anaesthesia-free piglet castration which were initiated by the humane society. The farmers were scolded as animal tormentors, and thus an emotional quarrel was picked in the public without real insight having been avail-able with regard to alternatives. The ISN has opened up to this social process of discussing a long time ago yet, however not on an emotional but on a factual level. We are actively coop-erating in the EU PigCas project, are playing our part in it and are holding lectures (as we last did in Nordwijk / Netherlands). The pig keepers are discussing about the animals’ comfort in pig farming within the “ISN Committee for Animal Welfare”.

Farmers of course are the livestock owners who do the job in a better way, and animal protec-tion is a matter concerning the whole society. It certainly does not only start with productive livestock and then end again at Rover and Pussy’s front doors.

Photo: Friedrich Hake, piglet's breeder und pig fattener from Hameln / Lower Saxony and ISN Board Member

Minister Seehofer Visits the Weser-Ems Region – Educational Trip and Charm Offen-sive

Tue, 13 May 2008 00:00:00 +0100

The Federal Minister of Consumer Protection, Horst Seehofer, followed an invita-tion extended by professor doctor Hans-Peter Mayer, EU delegate, to visit the centre of German livestock improvement breeding, the Lower-Saxony rural district of Vechta. At the Big Dutchman concern premises, top executives from the Lower-Saxony agricultural- and food industry met to talk with the visitor who is not seen often in Germany’s north-westerly regions.

After the Federal Government had changed about two years ago, many expectations were raised which now, however, give way to scepticalness. Too many issues are in disorder, too much gets left in the dust. This has been so even before the EU Ordinances for Keeping Lay-ing Hens and Pigs had taken effect.

So, Minister Seehofer made no secret of the reality that it’s a matter of public perception rather than of facts nowadays. “Go visit more chat shows,” he said, enthusing about Sandra Maischberger (German chat-show host) and giving advice to the auditory: “Watch the polls!” Medium-sized businesses in the Lower Saxony agricultural- and food industry are characterized by assiduity, activity and down-to-earthness. Populist showmanship is rarely found in this environment. Here, the entrepreneurs feel very much responsible for their customers, for their employees and for the enterprise’s economic future.

There is much interest within the agricultural- and food industry to find real solutions to real problems! That’s the weak point in the Minister’s will and expression of opinion if it comes to essential issues of improvement breeding. Being asked about, for instance, tentative efforts in pork exports, about the Law on Meat and Cattle or about the Bill of Livestock Transport, he partly got caught up in contradictions or just used flowery phrases. He was very good at ex-plaining everything, but said he “would not be able to help it”. So, when it came to the point, Horst Seehofer always said he “could not be held responsible”, it were “the others’ area of authority” or that of “those in Brussels” or that of the “Bundesrat”. He said the Federal Ministry of Consumer Protection, Food and Agriculture should be blamed in no case. At that point, however, the question came up on what the people at that Ministry did if they did “nothing”. There was quite some entertainment value in the dialogue. When being asked about the “Technical Inspection Authority for Livestock Protection”, the Minister seemed to feel a little cornered, however countering: “It’s the same thing with the Pope: You cannot hold him responsible for each and every sermon that’s held.” That at least yielded some laughs. Once in a while, the former health minister or the “designated” Bavarian CSU’s chair-man surfaced. To some extent, there was kind of lack of nationwide orientation. However, Horst Seehofer clearly stated himself being in support of bio-energy, of biogas and bioethanol. Time could not be turned back in every point, he said. No clear statement yet was given about gene-modified organisms. Politics need to set rules, not wait until it seems opportune to come to political decisions.

There goes a saying in Northern Germany: “He ploughs the furrow straight”, which to some degree expresses a person’s commitment and reliability. It certainly is not so hard a thing to do, ploughing straight, if you have the plough set accurately.

One thing may be said about Horst Seehofer: That man holds charm, he can talk well and he is able to fascinate the auditory. “He’s kind of a sport”, said one of the guests when walking home. But for someone who desires to be taken seriously by the Lower Saxony agricultural- and food industry it’s not enough to just be nice. Respect, the way the Lower Saxony Minister of Agriculture (Hans-Heinrich Ehlen) enjoys it, needs to be acquired.

There is ever more doubt among the agricultural- and food industry’s representatives about whether or not the government in Berlin is on the right path with regard to the tasks which need to be come to terms with.

One of the headlines in the latest issue of the renowned “Wirtschaftswoche” magazine read: “Driving Force – Everything Is a Good Match in the Lower Saxony Agriculture”.
“Dynamic and trend-setting – that indeed is what Lower Saxony’s agriculture is if compared with the economic power reported about from other areas in Germany”. The farmers here were “more productive than ever”, a fact which might also be attributed to the Lower Saxony local government’s well-done job. “The Ministry of Agriculture proves to be kind of a farm-ers’ lobby – those who are immediately involved don’t seem to have a problem with that”, was the Wirtschaftswoche’s slightly biting comment.

As a matter of fact, the Berlin Ministry of Consumer Protection appears to be farther remote from that than it has been ever before.

Photo: Ulrich Kirschner, pig feeder from Meppen / Emsland, and ISN Board Member

"Having A Heart for VION"-A comment by Christian Schulze Bremer, ISN Advisory Board Member

Mon, 28 Apr 2008 00:00:00 +0100

“In 2007, the VION food concern realised a net gain of EUR 120 million, making a total turnover of EUR 7.1 billion. Compared with the 2006 figures, this stands for a 55 percent in-crease”, reads the press release.

Congratulations to it! We, the pig keepers, are happy to hear that so large a yield return is being brought in by the slaughter industry. Because we, the pig keepers, also bring in large yield return – which however proves to be negative! It’s so nice to hear that a company struc-tured in as smallish a way as is VION was able to make this 50 percent increase. The question remains to be asked how much may have been gained by slaughter companies of larger struc-ture?!

The pig keepers at least still “have a heart for VION”. The feeding stuff costs, after all, have gone up by about 50 percent, too! Shouldn’t this make us feel conjoined?

We are so grateful to have been given the solution to a problem: In January, the ISN wondered who would benefit from private storage and from the exuberant export reimbursement. The money never reached the pig keepers; but where had it gone, instead? - Now we found it!

You know, pig keepers do not at all like to burn up their money. But this way we know it’s well-invested at least.

Says an old truism:
“The pig does not run to fat just for itself but for the others.”

Photo: Christian Schulze Bremer, sow keeper from Dülmen / North Rhine-Westphalia, and ISN Market Committee Chairman

Sow keeping: time per piglet makes the difference -A comment by Peter Spandau, North Rhine-Westphalia Chamber of Agriculture

Fri, 18 Apr 2008 00:00:00 +0100

Sow keepers sustainably suffer from low piglet prices. In connection with increased feeding-stuff prices, they won’t ever have their costs covered. Higher revenues on piglets still take a long time coming, and in view of the market forecasts, more favourable feeding-stuff prices are most unlikely to come into effect. In times like these, the question is asked again and again whether or not production resources – say: savings potential - can be made available. This is a question which cannot be answered easily by the piglet producer:

It is true that currently the number of weaners counted per sow increases as a consequence of breeding progress. Through this, the production costs per piglet are being decreased. But there are just few ways to accelerate the process for the individual farms.

The same goes for savings potential relating to direct costs. Cancelling inoculations may have the farmer expose himself to the danger of having to cope with output losses. Delayed raising of new gilts may lead to a suboptimal herd structure. When carrying out experiments with low-priced feeding stuffs, using them on his high-performance sows, the farmer most possibly puts the production robustness at stake.

So, for many of the pig keepers there will be left just the large part of building occupancy expenses and labour costs, amounting to an average EUR 20.00 per piglet. This, above all, needs to be taken into consideration. At the same time, the human resources management is required to be examined very carefully.

Timekeeping always indicates that the time needed per sow and year varies a lot even at herds of 250 to 300 sows, taking from 9 to 15 hours (equatable to about EUR 4 per piglet after all)! Labour time and performance do not seem to bear relation in this connection. The question rather is about organisation and management, also depending on the technical equipment used in the stable as well as on the structural facts.

Distances between the individual functional areas in the stables are of as much importance as are, for instance, the automation of feeding, group sizes, the housing system, the cleaning method applied, the health management and many more.

If optimisation of labour productivity proves to be no longer possible via organisation and management, it becomes necessary to question the structural facts. Building new stables in the open countryside may turn out to be more effective in the long run than might be the more cost-effective reconstruction of existing buildings. The saving earned for one working hour per sow and year complies with about EUR 150 investment costs per sow place. Insofar, in-vestment and extra work need to be balanced with each other very thoroughly.

In terms of sustainable competitive piglet production, labour productivity is as important as are the number of piglets and the size of the batch. No technical revolution is expected with reference to the saving of labour. Recognising and activating operational resources should be given top priority. Everyone should already have his master plan under his belt, pertaining to labour efficiency.

This comment is published in the SUS edition No. 2, April / May 2008

Agitation About Gene-modified Organisms! Pig Stock to Be Reduced by 50 Percent? - A comment by Ulrich Kirschner, ISN Board Member

Thu, 03 Apr 2008 00:00:00 +0100

It’s high time for the current EU policy to be scrutinised with regard to how to deal with gene-modified organisms (GMO). There is quite some disturbance going on about the security of herbal-feeding-stuff supply for the overall EU pig farming as a result of the EU’s current GMO policy, hindering the pig farmers from producing pork at internationally competitive prices.

The farmers feel particularly concerned about what happens in the grain trade and on the soy market. Apart from the fact that those products become ever more expensive all over the world, the EU Commission makes the situation get worse through imposing higher import duties as well as through its restrictive attitude towards genetic engineering. Thus, the prob-lem of high feed costs goes on with aggravating, leaving the European pig farmers having to cope with competitive disadvantage. In this respect it is essential indeed for the EU Commis-sion to put things right as fast as can be in order to re-establish international competitiveness pertaining to feed costs. All those unfortunate discussions about practising “no tolerance at all” need to be brought to an end now; the more so with regard to the fact that animals fed on GMO fed are being imported into the EU anyway from the USA, Brazil or Argentina.

Since the beginning of 2007, the swill prices have increased by 45 to 50 percent. Thus, enor-mous additional cost was created to the disadvantage of the EU pig farming which cannot be passed on to the end-consumer, a fact which goes for the meat-producing sector in particular. For wheat alone, which is among the most important feeding stuffs, prices have increased by almost 90 percent within a year’s time.

Only recently, a report was published by the Agricultural Head Office (AHO) titled “Eco-nomic impact of unauthorised GMOs on EU feed imports and livestock production”. In this report, it was confirmed that the current EU policy would most likely lead into an import ban to be imposed on bruised soy; about 35 million tons (equal to 75 percent) of all proteins of herbal origin fed to EU livestock are given by way of feeding soy. Again, this would mean an up to 44-percent decrease in pig- and poultry stock until the year 2010!

In view of the consumers’ growing concern about higher prices to be paid for provisions and feeding stuffs, the implications of the following EU Commissions’ memoranda with regard to their realisation urgently need to be taken account of: (EG) no. 1829/2003 and 1830/2003. The same goes for the AHO report about the effects asymmetric admissions may have on trade.

Rather than only reluctantly allowing for gene-modified plants to be made use of, the EU should consider introducing a reasonable risk-management policy. Inter alia, practicable fig-ures need to be fixed for marginal values as regards the existence of GMOs within the chain of feeding-stuff suppliers. A step in the right direction was taken by EU Agricultural Com-missioner Mrs Mariann Fischer Boel when announcing that low quantities of GMOs may be imported into the EU although they are not part of EU admissions. The following may be the reason for such change of mind relating to the issue of GMOs: Fear is growing within the EU that the USA might impose punitive tariff duties on EU products, which as a matter of fact is most likely to happen as a result of non-realisation of the WTO dictum with reference to how to deal with GMO products in the near future.

It is quite an essential thing to do that EU Commissioner Fischer Boel is now being supported in her attitude as to GMOs by the most important EU agrarian states and by Germany and France in particular. The German Minister of Agriculture, Mr Horst Seehofer, needs to show his colours without hesitation in order to avoid that the feed-cost situation, which proves to be very severe already for the German pig farmers, continues to aggravate.