It was an attractive location. A large garden, complete with swimming pool, surrounding a beautiful house. The farmer who lives there and his middle-aged son finish 45,000 pigs a year in their fully automated houses; computer controlled feeding and the injection of sulphur into slurry to reduce ammonia emissions, as well as a system to take the heat out of slurry and store it via a heat exchanger to raise temperatures in the houses during colder night-time hours. Average conversion rates of feed to liveweight was said to be 2.6 to 1 and one house was achieving 1.8.
As he drank what is “probably the best lager in the world”, straight from the bottle, the hospitable Danish farmer entertaining the Farmers Weekly study tour party said: “Of course, feed prices are high now grain values have risen. But we bought ingredients early and grow most of our own wheat, so we are still making money. But within the last two years in a radius of 10km from here, the banks have foreclosed 10 farmers. As a matter of fact, we are being invited to take over some of those farms.”
This was one of the bigger farms in Denmark. They were already managing more than 1,000ha and a haulage business as well as the pigs. But the average size of a farm in Denmark is 61ha which, by definition, means many are smaller than that, and two-thirds of farmers are part-timers. Indeed, the fact that they have other income may be significant to the fact that they continue to produce food when market conditions are unfavourable.
We went to another big farm where there was a 320-head dairy herd. They were milked through a rotary parlour, housed in superb, airy buildings and fed what appeared to be a first class, mainly home-grown ration. But the average loss per cow last year was just over £1,400. The price paid for milk ex-farm was too low to cover increasing costs. It was just like home.
The other factor making Danish farmers vulnerable to low prices and volatility is their tendency to borrow huge amounts of money. As it happens, that was not the case with either of the examples quoted above. But the average borrowing of Danish agriculture is more than three times more, compared with asset value, than UK farmers borrow. And while this might have been sustainable while farm incomes were healthy and interest rates low, the lack of profitability of key commodities over the last few years has caused land values to halve and left many farmers in negative equity.
Despite this, Danish farmers still produce enough food for 15 million people. The domestic population is 5.5 million so they export almost two-thirds of what they produce – a fair percentage, it must be said – to the UK. Moreover, agriculture represents about 12% of total Danish export earnings and when you add in the agri-industrial sector this rises to 20%.
But that does not seem to impress the Danish government which continues to impose punitive regulations on the industry – the latest proposal being a “fat tax” on meat which is unlikely to have any effect on health and seems to farmers and the food trade like a cynical excuse for another tax.
Farmers’ leaders are so incensed that they have launched a cross-industry image-building campaign to try to make the Danish public love them more. The need for that also reinforced the similarity to our situation back home.
David Richardson farms about 400ha (1,000 acres) of arable land near Norwich in Norfolk in partnership with his wife, Lorna. His son, Rob, is farm manager.