Supplements must ensure Danish Crown more pigs
Astable utilization of the capacity at the slaughterhouses is the most effective way to ensure a competitive settlement for Danish Crown's unit owners. Therefore, Danish Crown's board of directors has just decided to introduce two forms of growth allowance.
"Our goal is to increase supplies by at least 250,000 pigs in this financial year, as this will ensure a better settlement for all unit owners. In other words, more pigs will save us more costs than the payment of supplements will cost us", says Daniel O. Pedersen, vice chairman of Danish Crown AmbA.
Growth allowance 1
Growth allowance 1 is 45 øre per kilos and will be paid out to the unit owners who meet the following two conditions: The unit owner must increase his A quantity and increase the number of delivered pigs in the financial year 2024/25 in relation to the registered A quantity per 1 October 2024, and at the same time the increased delivery must exceed the average number of pigs delivered in the five previous financial years.
This means that a unit owner who on 1 October 2024 expected to deliver 10,000 pigs in the financial year 2024/25 - and who in the period from 1 October 2019 to 30 September 2024 has delivered 10,000 pigs on average per year – by raising his A quantity and delivering extra pigs beyond the 10,000, will obtain a supplement of 45 øre for the extra kilos.
Growth allowance 2
Growth supplement 2 is 35 øre per kilos and is paid to the unit owners who meet the following condition: The unit owner must increase his A quantity and increase the number of delivered pigs in the financial year 2024/25 in relation to the registered A quantity per 1 October 2024. All unit owners can obtain the allowance for an increase in their production of up to 10,000 pigs, regardless of the registered A quantity per 1 October 2024, or for an increase in production of up to 20 percent compared to the registered A quantity per 1 October 2024.
This means that a unit owner who on 1 October 2024 expected to deliver 10,000 pigs in the financial year 2024/25, by raising his A quantity and increasing his deliveries by up to 10,000 extra pigs, will be paid 35 øre in addition on the extra kilos. A cooperative owner who on 1 October 2024 expected to deliver 55,000 pigs in the financial year 2024/25 can, by increasing his deliveries, receive the supplement for up to 11,000 extra pigs.
Stable capacity utilization benefits all unit owners
For owners who have delivered stably or have grown in recent years, it will thus be possible to obtain both growth supplements by increasing their A quantities with new pigs for Danish Crown.
"When we have free capacity at the slaughterhouses, there are two ways to go. We can either spread the cost over all the kilos delivered, or we can reward our unit owners for delivering more pigs so that we have full slaughterhouses. Our forecasts show that we will have room for extra pigs when we arrive a month or two on the other side of the New Year, so we are now choosing to introduce a supplement that can motivate the share owners to deliver more pigs", says Daniel O Pedersen
Regardless of whether you as a cooperative owner increase your A quantity, deliver more than in previous years, or choose to continue with an unchanged production of fattening pigs, calculations show that it will result in a better settlement for all owners if the total deliveries to The Danish Crown is increased.
"For us on the board, it has been central to create models that reward to a greater extent the unit owners who have faithfully supported Danish Crown and taken responsibility for the Danish value chain, and we actually believe that in the current circle of there are quite a few unit owners who can have the courage to increase their production", says Daniel O. Pedersen.
The two growth supplements are valid for deliveries in the financial year 2024/25 and can also be combined with the supplements offered to unit owners who have the opportunity to increase the production of UK pigs.
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