Finns eat over a kilo of Christmas ham per person

Six million kilos. That’s how much Finns eat Christmas ham this Christmas too. That’s more than a kilo for every inhabitant of Finland.

The consumption of Christmas ham is high, but so is the consumption of pork anyway. Last year, 159 million kilograms of pork was produced in Finland, or about 28 kilograms per inhabitant.

In the peak year of 2008, production was no less than 217 million kilos, which means that both production and consumption have decreased, but perhaps less than imagined. Pork is consumed less and less often as a bare fillet or chops.

Most often, pork is hidden in ham pizza, cold cuts or sausages.

Agricultural producers the meat expert of the interest organization MTK Mari Lukkariniemen consumption decreases steadily at an annual rate of about three percent. Broilers have taken over the industry from pork.

Pork production, like agriculture in general, has also become more efficient and the number of pig farms has halved. In 2008, there were more than 1,200 pig farms, last year around 620. According to Lukkariniemi, farms are closing down all the time.

How big pig business overall is? It is difficult to get a clear answer to that. Lukkariniemi does not have a total turnover figure for pigs. It can be estimated by multiplying the number of kilos produced by the price paid for the meat, which is recorded.

If 160 million kilos of pork are produced and about 213 euros are paid for 100 kilos, the production value would be around 340 million euros.

“But this is a very theoretical estimate of the value of primary production on the slaughter meat side. Producers can also receive other compensations,” Lukkariniemi says.

Some of the pigs are sows that focus only on piglet production. There, the piglets are raised to intermediate piglet size, i.e. around 30 kilos. It takes about two and a half months.

After that, the piglets are sold to slaughterhouses, where the piglet grows into a 120-kilogram butcher’s box in just over three months. Some pigs manage the production chain from start to finish.

From one according to Lukkariniemi, after expenses, the pig farmer will have an average of 13.7 euros from the slaughter box. The slaughterhouse charges 191 euros for the carcass, so the calculated EBITDA for the pig is about seven percent.

The biggest cost item is feed. Other costs include the price of the pig, electricity and other expenses related to breeding. With EBITDA, the piggery has to cover the financing costs and investments, which means that the owner of the piggery is left with even less.

In 2023, according to Lukkariniemi, many pig farms were cramped, when the price of feed and interest rates rose at the same time and sharply. About a hundred piggeries stopped operating during the year.

Pigs there are still hundreds. Slaughter and meat processing, on the other hand, is very concentrated. Most of the pigs are slaughtered by Finland’s three big butchers, Atria, HK-Foods (formerly HK-Scan) and Snellman. Pig farmers usually have a production contract with a slaughterhouse company.

Meat companies further process the vast majority of meat into ham, sausages and snacks. Only a quarter of pork is consumed as actual meat, such as pulled pork, minced meat or fillet.

If the pigs are not profitable, will the slaughterhouse giants make big profits from pork processing? Not really.

“The average margin in the meat industry has historically been around two to three percent. The business is based on stable, high demand.”

The operating profit percentages of HKFoods and Atria, which are listed on the stock exchange, were really around two to three percent last year. However, meat companies do not specify which part of the result comes from pork.

Also operating profit margins in food retail are typically quite low. A large result is based on a large turnover.

In Lukkariniemi’s opinion, it is a good question whether anyone actually makes money from pork production.

“In primary production, and this does not only apply to the pig sector, polarization is characteristic. There are farms whose financial situation is good. They have opportunities to invest, for example, in solutions that improve the welfare of animals,” says Lukkariniemi.

But then there are many farms that have a lot of debt and can barely survive.

Pellervon Economic research has recently done a cash flow analysis of the entire meat sector, but pork is not broken down in it. However, it can be concluded to some extent how the cash flow is also distributed in the pork chain.

The cash flow of the entire meat industry in 2022 was a total of approximately 2.6 billion euros, which is how much money was moving in the meat business.

Of the cash flow, 911 million euros or about 35 percent went to agriculture, 283 million euros or about 11 percent went to meat imports, only 158 million or about six percent remained for the food industry, 767 million euros or about 30 percent went to trade and 220 million euros or about eight percent to restaurants.

In the cash flow statement first, we looked at how much money was spent on buying meat products in Finland overall. After that, it has been analyzed which part of the sum remains for each step of the chain.

If the situation in the entire meat industry also applies to pork, pig farmers will be left with more than a third of the money circulating in the industry.

“Of course, the cash flow analysis does not tell us anything about how the invested capital at different levels of the chain produces,” Lukkariniemi says.

Although margins are low in the industry, pork production provides jobs for many. It also employs salaried workers on farms, animal transporters and workers in slaughterhouses and meat processing.