August 5, 2010

Grain price surge squeezes Danish pig farmers

Farmers in Denmark, the world's largest pork exporter, are getting squeezed by a jump in grain prices, the Danish Pig Producers (DPP) group said.

The country's 5,000 pig farmers are facing higher feed costs, which may total an additional 900 million kroner (US$160 million) this year, DPP chairman Henrik Mortensen said.

Denmark rears 27 million pigs a year, feeding each 200 kilogrammes (440 pounds) of wheat and barley in addition to soy products. Feed accounts for two-thirds of production costs.

Meanwhile, wheat traded in Chicago, reached a 22-month high August 2, extending a 38% advance in July that was the biggest since 1973. Russia is also facing its worst drought in at least a half century and flooding damaged crops in Canada.

The total debt of Denmark's farmers rose 13% to 298 billion kroner at the end of 2008, according to the latest data from the Danish Agriculture and Food Council.