Denmark’s agriculture can feed much more than its own population of 5.5 million. It’s a big food exporter, with about twothirds of its agricultural production going to exports, and it has a large pork industry that consumes a large proportion of its grain production.
"The annual production of Danish agriculture is sufficient to meet the food requirement of 15 million people," according to the yearbook Agriculture in Denmark, published on behalf of the farmers organization Danish Agriculture (Dansk Landbrug) and the Danish Agricultural Council (Landbrugsraadet).
The average Danish farm size is 55 hectares, second only to the United Kingdom in the European Union (E.U.).
According to the International Grains Council, Denmark’s total grain production in 2008 was 9.1 million tonnes, up from 8.2 million in 2007. Wheat production rose to 5.1 million tonnes from 4.5 million. Barley production in 2008 was 3.5 million tonnes, up from 3.1 million, with rye production unchanged at 100,000 tonnes.
Total imports of wheat in 2008-09 are expected to come to around 384,000 tonnes, with all but 30,000 tonnes coming from other E.U. countries, according to the French analysts Stratégie Grains. It puts total wheat exports at 398,000 tonnes, with 110,000 going to non-E.U. countries. Its 2008-09 figure for the Danish crop is 5.027 million tonnes, with a predicted an increase to 5.094 million in 2009-10.
Denmark is also a producer of rapeseed. According to the E.U.’s statistics organization, Eurostat, rapeseed production was 637 million tonnes in 2008, compared with 596.3 million in 2007.
TWO BIG MILLERS
Brinch-Nielsen noted that Denmark also is a big grain producer, with most of it going to the pig feed sector. "Annual production is around a million pigs, and we’re only 5 million people," he said.
Denmark is largely self-sufficient, although it has to import higher quality grain, mainly because of restrictions on the use of chemicals. "Milling grain does mainly come from Denmark," he said. "We also import high-protein grain from Sweden and Germany and the rest of the world. We have a deficit of highprotein milling grain."
Volatile markets have created a new problem for millers who have to deal with rapidly changing prices. "It goes up and down all the time," Brinch-Nielsen said. "We can’t have any structure. It used to be that the best price came to the biggest buyer. Now it depends when you bought the wheat."
Millers also face a highly competitive environment. "All over Europe this year has seen intense competition," he said. "There is large competition from central Europe."
The credit crunch has hit millers’ ability to invest.
"Investing in mills demands you have a very strong financial position," he said. "We do in Valsemøllen. For newcomers it’s different. But there is overcapacity, so that’s okay with me."
Ivan Pedersen, purchasing manager of Lantmännen Cerealia, the country’s biggest milling organization, explained how the two big companies dominate completely.
"You can find a couple of small oat mills," he said. "If you really take industrial production of flour, there is only us and Valsemøllen. We have two-thirds of the market. Our competitor, Valsemøllen, has about one third."
However, that does not mean that there is no competition. "We have competition from Germany," he said. "We’re buying grain from Germany, and it is possible to drive up flour from German mills."
Overcapacity in Germany means that the German millers are highly competitive in Denmark. "They are struggling along with overcapacity," he said. "They dump it on the market."
Lantmännen uses 230,000 tonnes of wheat in Denmark and also imports from Sweden. Lantmännen has invested heavily in a new, state-of-the-art mill in Vejle, Denmark.
"Our new mill has cost 400 million Danish kroner (around $76 million)," he said. "It’s the most highly developed mill in the world."
FOCUS ON HEALTH
"There’s a lot of focus on whole grain products and the focus on the good effect of eating oats," said Pedersen. "Our organic oats (business) is growing every day. The capacity in Denmark, Sweden, Norway and our plants in Eastern Europe is sold out. It tells you a lot about the focus on health."
Lantmännen has a wide range of customers. "We are rather dependent on the big industrial baking companies. We have small private bakeries, and then we have catering and supermarkets," he said. "We are servicing the whole market."
Big customers are important. "We are connected through Lantmännen to the big Danish baking companies like Unibake. The biggest part of our production goes to the big industrial bakers, which then export around the world."
He said the industry is participating in the Danish Whole Grain campaign, of which Valsemøllen’s Brinch-Nielsen is president.
"The whole grain partnership is very important," Brinch-Nielsen told World Grain. "The industry, NGOs and government have come together and made up the partnership. Its purpose is to increase consumption of whole grain in Denmark."
The campaign, which was launched in January, includes a logo that can be put on whole grain products.
"There are more than 100 products with the logo," he said. "More than 50% of the flour should be whole grain (to qualify for the logo), and also there are constraints on its sugar and salt, which means it is also a healthy product. All the big companies in Denmark have joined and the supermarkets are involved."
BIG PIG SECTOR
"We’ve always been a big country for pig production," Jesper Pagh of the cooperative DLG, which is owned by 28,000 Danish farmers and is the country’s largest agricultural supplier, told World Grain. "In an average year, 60% to 65% of the grain goes to feed."
Much of the grain is mixed into feed on farms, but around half is made into compound feed.
He said the feed industry has put a lot of effort into ensuring quality and traceability. "Of course, feed safety is a very big issue in Denmark," he said. "That will increase in the future. It’s not a problem, but it is a challenge."
Another challenge for the industry, Pagh noted, is that meat production is declining in Denmark and the rest of Europe.
Genetically modified (GM) crops also pose a potential problem. "We use GM soya and, to a lesser extent, GM corn," he said. "With the European approval times for new strains, we have a problem."
His concern is about delays in the approval of new varieties coming onto the market. "If we come to a situation where we have to guarantee feed is non-GMO, we have to pay a lot more for the feed."
"We are the only producer," Bjarne Simonsen, director of Emmelev, told World Grain.
He put annual usage of rapeseed for biodiesel at 100,000 tonnes. The Danish government’s target is for 5.75% of transport fuel to come from biofuels by Jan. 1, 2010. WG
Chris Lyddon is World Grain’s European editor. He may be contacted at:firstname.lastname@example.org.