The reason for this breakthrough was the introduction of five strategic initiatives, including raising the purchase price for farmers to a competitive level starting in May of this year. This made it possible to convince sceptical suppliers and attract new partners, as well as increase the volume of supplies from existing ones.
"We are close to full capacity utilisation and are now forced to regulate agreements on additional volumes more carefully. The interest of farmers is impressive — it has allowed us to actually change the situation on the market," said Group CEO Niels Ulrik Dydal.
Restrictions on new agreements
Due to a record influx of applications since 1 September, Danish Crown:
- is suspending the conclusion of new agreements for additional volumes and the breeding of heavy pigs;
- will only continue to support young farmers and those planning to start a business;
- will require all changes in supply to be agreed with the business owner service.
Support for young farmers
Despite the restrictions, the company continues to offer supply contracts and bonuses for newcomers in order to support generational change in farming.
‘We want to help young producers and those who are just starting to work with Danish Crown, because this is an important investment in the future of the industry,’ emphasised Soren Tinggaard, director of the owner service.
A step towards greater integration
Danish Crown plans to move towards closer cooperation with suppliers to optimise the utilisation of its slaughtering capacity. Suppliers must now give 12 months' notice of any intention to change their annual supply volumes.
According to the management, this approach will stabilise the market and guarantee producers a stable competitive price for their products.
The company emphasises that this success was made possible by comprehensive measures and the high level of interest among farmers, which will ensure that Danish Crown's capacity is almost fully utilised next year.
PigUA.info based on materials from euromeatnews.com