The capital used for investments needs to be earned in the pig industry itself
If it's about pork, Germany is not found among the countries at the upper price range of the market. Comparing pig prices on the major European markets, you will find that they all are almost alike. This was the most important insight gained in the European pig price comparison drawn up by the ISN Interessengemeinschaft der Schweinehalter Nord-Westdeutschland e. V.

But telling the pig keeper or the slaughter company (who might just as well have known about it anyway) that pig prices are almost alike on the major European markets -- what good would that be for? Well, he who is interested in it will find out that, after the Euro was introduced and cross-border concentration of the slaughter industry has become kind of customary, a Single European Market has developed which does no longer have to cope with considerable trade barriers or competitive distortion.

Higher pig prices might certainly be found in some of the EU member countries, which would however be caused by national features. Take a look at Italy, for example: World-wide exports of its well-known Parma ham make Italy able to achieve higher prices. As a special exception, yet, this does not apply to the current situation.
In Spain and Portugal, seasonal price variations are being observed which result from the summer tourism business. Every summer, millions of holiday-makers romp about in Spain who -- of course! -- do eat their schnitzel there, thus forcing up prices in summer.

Apart from such exceptions to the rule, however, pig prices do indeed move round the same level all over Europe. The so-called Rote Seite should accept this, too, in order to avoid unnecessary waste of time discussing about German pig prices, comparing them with Dutch or Belgian prices. Should considerable price differences be detected, huge numbers of live pigs would, within the shortest possible time, be exported to the country where the highest possible prices are being paid. The Rote Seite rather should concentrate on trying to achieve higher prices through sales to the grocery trade. The pig keepers' task cannot be to iron out -- by keeping their producers' prices at a low level -- the slaughter companies' pricing deficits in their sales to the grocery trade.

This fact was now realised in the slaughter industry, too -- an insight that was mirrored in the statements the slaughter companies' representatives gave during the ISN Strategic Convent which had been held in Münster in March. So for instance Dr. Uwe Tillmann, Bestmeat Company CEO, said that in future a sales policy oriented to the results should be followed by the slaughter companies. In the end, no more money could be paid anyway to those working in the pig industry than the amounts the consumers spent at the till. Meat should no longer be flogged off at the counters.

But, as the slaughter companies and the producers agreed during the discussion, the problem was not at all caused at the discount shops but rather at the major supermarket chains, where pork partly is sold at prices below cost price. It goes without saying that not much will then be left for the pre-businesses. Naturally, the capital the slaughter companies undoubtedly require for making investments must be earned in the pig industry itself rather than be taken from the pig keepers' purses (as do Westfleisch and Danish Crown).

However, with getting to know that prices are almost alike all over Europe, people find that another aspect is attached much greater importance to. If possibilities are given to make similar proceeds no matter where in Europe, you may well imagine what countries will be losing market shares in the end: it's those countries, where pork production is most expensive. The production costs, in turn, directly depend on the political framework given. The latter, again, is being influenced by national solo-runs such as the German red-green government strives for. Any kind of regulation exceeding the EU guidelines inevitably results in increasing production cost and in competitive distortion at the same time.

This has happened both in Great Britain and in Sweden. During the past decade, both countries arrived at considerably increased production costs through stricter rules as regards the protection of animals (more space to be made available to each animal, no fully slatted floors allowed, stipulating management on litter, and so on). As a consequence, the British pig stock went down by near to 40 % since 1994, and in Sweden the decrease came to holding about 20 % less pigs. Meanwhile, a decrease down to 51 % in the self-sufficiency rate was observed in Great Britain. Introducing stricter rules for the protection of animals in Sweden made Sweden's largest slaughter company (Swedish Meats) be a candidate for being taken over through Danish Crown.

If we want to have most of the pork that is being consumed in Germany to be continued to be produced in Germany, we must recommend to the Federal Government to stop such national solo-runs immediately. No need to talk about those 500 000 jobs that are definitely being endangered to be destroyed by this kind of policy. But of course, the Federal Government may carry on following its policy of national solo-runs, thus chasing the specialised pig industry out of Germany (as it has already succeeded to do with layer management). But maybe the Government has quite a different strategy in mind? The Government declared it its goal to achieve a 20 % share of organic farming in national agriculture before 2010. And this might well be achieved also by disproportionately shifting conventional pig management to other countries.