Valorisation sustainable products

Production of the meat we sell provides a source of income for many farmers. At Van Loon Group, we strive to make our company and supply chain more sustainable, but we also want to keep products affordable for consumers. The efforts made by farmers, Van Loon Group and other supply chain partners to become more sustainable must be rewarded.

The price and surcharges paid by Van Loon Group to livestock farmers from its own chain.

The price we can pay our livestock farmers is indirectly dependent on the customer’s willingness to pay a fair price for sustainably produced food. We are working on innovative market concepts in collaboration with our customers and supply chain partners, ensuring that any additional costs or savings are evenly distributed across the chain.

All livestock farmers within our supply chain receive a fixed premium per animal delivered under the Better Life label. The premium depends on the number of stars awarded. The sustainability measures taken by farmers in terms of animal welfare therefore translate into a better price for their product. For pig farmers, this is a fixed premium per pig. For cattle farmers, the sustainability premium is incorporated into the price.

In addition, pig farmers receive a supply chain premium and may receive incentives for extra efforts in the areas of animal health (antibiotic use, salmonella status, hygiene management) and animal welfare (no tail docking and free-farrowing pens).

CEO

2024 has been a transitional year for the Varken op z’n Best (VOB) supply chain, marked by the implementation of a new settlement model for pig farmers, combined with a long-term purchase guarantee from us.

In this model, the actual cost price of a slaughter pig is calculated by an independent agricultural sector accountant. The pig farmer can then choose to have up to 50% of their pigs settled based on the calculated cost price, and the remaining 50% based on the market price.

This model operates with fixed quarterly prices, providing pig farmers with a more stable income and reducing the impact of global market price fluctuations. Additionally, the cost price model includes a provision for farmer income, thereby lowering the risk of negative earnings for pig farmers. This model will be rolled out gradually from 1 January 2025.

The methodology for this calculation was developed in consultation with our pig farmer advisory group and explained during five national meetings to which all pig farmers were invited. Each pig farmer was given the option to choose whether to deliver under this cost price model or to continue settling pigs at prevailing market prices. By the end of 2024, 41% had opted for the new system.

For many pig farms, 2024 also marked the end of the transition period for many Beter Leven Keurmerk (BLK) criteria. The most significant criteria - with substantial financial impact - include providing daylight access for all animals, increasing group sizes for sows and porkers, removing feeding stalls for pregnant sows, and providing solid floors. Together with accounting firm ABAB, we mapped the costs of these adjustments, and the additional expenses were directly included in the price paid to pig farmers for their pigs. Pig farmers who meet the 2025 BLK criteria will be reimbursed for these additional costs from 01-01-2025.

In 2024, a blockchain platform was set up to calculate the CO₂ footprint of all pig farms as automatically as possible. This data will become available in early 2025.
Van Loon Group has also developed a related concept named "Rund op z’n Best" for calves born on dairy farms - a beef concept in which female calves are fattened as beef cattle. These Dutch animals are fed a diet high in roughage and live in stable groups with ample space and fresh air. A key aim of this concept is to create a more viable income model for farmers. However, the national manure issue and a shortage of calves due to the bluetongue outbreak in 2023 have led to far higher than expected production costs. Although beef prices rose, this has not yet resulted in improved earnings for our livestock farmers.

Pig farming in 2040 will be very different than in 2024. Due to ongoing public debates about animal welfare, more stringent requirements regarding pig housing will be introduced over the coming years. The most impactful changes include the end of tail docking piglets and the banning of sow confinement, introducing what is known as free-farrowing pens. We embrace this future vision through the production of ZON Pig.

ZON pigs are kept in stable groups throughout their lives, can root in straw, and have access to outdoor areas. Their manure is immediately separated from urine using an ingenious separation system. Additionally, the pigs are fed exclusively with circular feed, which avoids competition with agricultural land used for human food production.
Because we offer a purchase guarantee for all ZON pigs, the number of ZON pig farms can continue to grow. Banks are willing to finance these stables, and pig farmers are therefore confident to make the move towards a more future-proof way of pig farming. In 2025, four more new ZON pig farms will be put into operation.

Through our VOB programme, we are also anticipating upcoming changes in animal welfare regulations. Pig farmers who choose to build free-farrowing pens now will receive a financial bonus per piglet once the pens are completed and in use. In doing so, Van Loon Group is actively encouraging the transition towards more animal-friendly livestock farming.

In 2025, a cost price model will also be developed for Rund op z’n Best.