1. Salami chain in the Netherlands
1.1. General facts and figures connected with pork and salami

The Dutch pig sector has a reputation for producing pigs of a consistently high quality and a uniform weight class.
With its IKB (Integrale Keten Beheersing – in English: Integrated Chain control) – the Dutch pig sector provides total surveillance of animal production. The pig sector has for many years been guaranteeing the safety and quality of its pig meat. Key elements of the IKB schemes are exchange of information combined with a system (Identification & Registration) for tracking and tracing animals, and extra requirements relating to feed, hygiene and the use of veterinary drugs. These aspects make the Dutch pig sector competitive to other countries.

Population and production
For the first time since 1999, the Dutch pig population showed a slight increase. In April 2004 there were 11.2 million pigs (+0.4%) in the Netherlands. The number of farms where pigs are kept however decreased 7%, to 9,980. The larger number of pigs resulted in a 0.8% growth in production, to 20.3 million animals. Out of this total, 2.3 million were exported as fattened pigs (+1.8%), 3.7 million as piglets (-8.5%) and 179,000 as sows for slaughter (-6%). The remaining 14.1 million were slaughtered in the Netherlands, along with 337,000 imported pigs. This resulted to a 3.9% increase in the number of animals slaughtered, to a total of 14.4 million with an average slaughtered weight of 89.7 kg. This resulted in a production of 1.3 million tonnes of pig meat (+3.4%).
The decline in the number of farms with pigs continued in 2005. The present number – just under 9,700 – is only a third of that in 1990 (at the end of 1999 there were 16,426 pig farms with a total of 13.6 million animals in the Netherlands) . Almost all the disappeared farms had kept pigs as a sideline activity. The number of farms specializing in pigs on the contrary increased.

Exports
Exports of pigs, pig meat, pig meat products and bacon increased 7.8% in 2004, to 1.2 million tonnes (calculated in slaughtered weight). The export value increased 11.2%, to € 2.1 billion. Exports of pigs showed a 2.7% drop whereas those of pig meat and bacon increased substantially (+13%). Exports of (cooked/canned) pig meat products experienced a slight decrease (-0.6%). The increase in the export volume is largely attributable to the larger number of animals slaughtered (+4.8%). The three largest export countries as far as pig meat, bacon and (cooked/canned) pig meat products are concerned are the United Kingdom (34%), Germany (21%) and Italy (19%). With exports of live pigs included, Germany is the largest market for the Dutch pig sector.
Increased exports
In 2005 the Dutch pig sector’s exports increased to 1.25 billion kg (4%). Together with the higher selling prices, this increase resulted in a 7% increase in the export value of the overall pig sector, to 2.2 billion. The export value of live pigs in particular increased because far more animals were exported and the exported animals were sold at higher prices.

Selling prices
In 2004, the average reference price for fattening pigs (class E) was € 1.31 per kg of slaughtered weight (excluding VAT), which represents a 13.6% rise relative to the price in 2003. The price of piglets according to the Utrecht Pig Exchange was € 30 per piglet (+12.6%). The selling prices of piglets and pigs rose in 2004 as a result of the expansion of the EU, and the greater demand for pig meat on the global market due to import bans on other types of meat on account of animal diseases. Piglet prices rose substantially in 2005. This upward trend was supported by a strong demand from Germany, but also from the new EU member states Poland and Hungary.

Consumption
At 688,000 tonnes, Dutch consumption of pig meat remained virtually unchanged in 2004 (+0.1%). This corresponds to 42.3 kg of pig meat per capita. Pork consumption is by far the highest of all meats in the Netherlands. In spite of the rise in the selling prices of fattening pigs, the average shop price was the same as in the previous year. This is partly because shops are slow in adapting their prices to the higher purchasing price, but also due to the price war amongst Dutch food retailers that also helped to keep retail pig meat prices low. 1
Slight decrease in consumption
The consumption of pig meat was last year a little lower than in 2004. Consumption per capita decreased to 41.9 kg (-1%). This decrease was largely due to the higher retail prices charged for pig meat.
Consumption of meat and meat products (in kg per head) in the Netherlands 1990-2004
This figure is about half of the consumed quantity based on carcass weight (= including bones).

Table 1: Consumption of pork in the Netherlands
Year
1990
1995
2000
2003
2004
2005
Consumption (kg)
42.5
44.2
43.6
42.4
42.3
41.9
Source: www.cbs.nl

Better market situation
The trend towards improvement of the market situation remained unchanged in 2005. Production increased slightly, exports, especially of live animals; saw a substantial increase and the price level of fattening pigs was virtually no lower than that of 2004. Sow farmers realized better results due to the higher prices paid for piglets and lower feed prices. Fattening pig farmers did less well on account of the higher purchasing prices of piglets. This was however largely compensated by lower feed costs. As capital charges decreased too, the income/costs ratio of an average fattening pig farm improved.



1.2. The chain

The meat chain extends from the animal feed, genetics/breeding, multiplication, farm and slaughterhouse sectors to the processing industry, portioning, wrapping, distributing, and selling and the wholesale and retail sectors. This chain of activities is generally a result of long term, strategic management decisions, and, therefore, fairly constant at the short term.

1.2.1. Inputs into the pork production chain:

The input into the pork production chain, which refers to the way the chain activities are carried out and to the kind and amount of material used in the chain. Input is qualified by means of input values, for example, amount and composition of the feedstuffs, type of pigs and the way of breeding, kind of veterinary care and medicines, amount of energy, type of transport and labour. Some inputs, such as feed and veterinary care, may themselves be the result of a (sub)chain. Input, input values and chain activities are often closely associated with each other since one feeds a kind of feed, transports pigs over a certain distance with a particular truck, wraps pork in a specific material, and so on. Input values are generally a result of short-term, operational or tactic management decisions.2
Drawing 1: Salami chain in the Netherlands

Source: Own study