A combination of reduced beef supply across Europe and stable consumer demand has significantly driven up beef prices during the first six months of the financial year. Danish Crown Beef’s revenue reached DKK 3.2 billion - a 9% increase compared to the same period last year. Profitability has followed accordingly, as reflected in the payouts to farmers. On average, payments have increased by 12.8% since the beginning of the financial year.
“We’ve experienced a prolonged period of increasing payments to farmers, and that trend is continuing. Prices have jumped more sharply than during the same period last year. The beef market is red-hot right now, and we’re closely monitoring developments, as we’re starting to see early signs that we may be approaching the market’s upper limit,” says Finn Klostermann, CEO of Danish Crown Beef.
A Focus on Quality
The rise in revenue and earnings cannot be attributed solely to the booming beef market. Danish Crown Beef has a strategic focus on increasing the value derived from each animal. This is reflected in a 2% increase in the proportion of raw materials being refined, compared to the same period last year.
Particularly notable is the growth in sales of the company’s own branded products - those sold under the Danish Crown label - which have risen by an impressive 75% following strong development during the 2023/24 financial year.
In March, a new payment model was introduced, rewarding farmers for improved eating quality through a special marbling premium.
“This is a significant shift in how we pay our suppliers. We’re seeing strong demand for high-quality Danish beef, especially in markets like Italy and Spain, so we’re increasing our focus on quality. It only makes sense that higher quality should result in better payouts for the farmers,” says Finn Klostermann.
Challenges in Germany
While the Danish operations have boosted recurring earnings, the two German cattle slaughterhouses and the hide company Scan-Hide have underperformed. The cattle population in Germany is declining, pushing up the prices of animals for slaughter. This, combined with lower slaughtering volumes and reduced efficiency, is impacting earnings. Lower supplies of cattle hides are also a challenge for Scan-Hide, though this is overshadowed by weak demand for leather from both the automotive and furniture industries, due to ongoing geopolitical uncertainty.
Sustainability Data Across the Entire Value Chain
Danish Crown Beef has intensified its focus on maximizing the value of its meat rather than simply increasing volume—an approach fully aligned with the company’s overarching strategy around quality and sustainability.
“We’ve long been working to enhance quality and extract greater value from our raw materials. We see this as the right path forward in a market with increasing competition for raw materials, and it also fits well with our sustainability ambitions,” says Finn Klostermann.
