perspective for poultry meat and eggs in the eu · perspective for poultry meat and eggs in the eu...

Perspective for poultry meat and eggs in the EU

Peter van HornePoultry Economist

Agricultural Economics Research institute (LEI)Wageningen- University and Research Center (WUR)

The Netherlands

Hannover, November 2010

Content

� EU Poultry meat � Current situation� Trends / Forecast

� EU eggs� Current Situation� Trends / Forecast

� EU policy on CAP and WTO� Sustainability

Worldwide Production and Trade:

Current Situation

Part 1. Poultry meat

Main players in broiler meat production

Europe: ranking UK nr 9 en Spain nr 12

usa 21%

china14%

brazil13%

EU11%

mexico 3%

India 3%

Russia3%

other32%

World: Main trade flows poultry meatDominated by Brazil and USA (together 75%)

US

Brazil

Russia

TH Japan

Thailand

EU

EU Production and trade:

Current Situation

Poultry meat

Evolution of poultry production in the EU (‘000

tonnes)

0

2000

4000

6000

8000

10000

12000

14000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Pro

duct

ion

('000

tonn

es)

0,94

0,96

0,98

1

1,02

1,04

1,06

1,08

1,1

Self-sufficiency (%

)

Production Self-sufficiency

EU 15 EU 25 EU 27

Source: Agraceas / EU

Consumption in the EU, total (‘000 tonnes) and per capita (kg/head)

0

2000

4000

6000

8000

10000

12000

14000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Con

sum

ptio

n ('0

00 to

nnes

)

17,0

18,0

19,0

20,0

21,0

22,0

23,0

24,0

25,0

Consum

ption (kg/head)

Total Per capita

EU 15 EU 27EU 25

Source: Agraceas / EU

BSEBSEBSEBSE

HPAI

EU trade of poultry meat

Source: Eur. commission

EU imports of poultry meat, 2009 (volume, %)

Brazil: Frozen / salted Chicken breast

Thailand: Cooked chicken breast

Source: Eur. commission

Brazil75%

Thailand16%

Chili 4%

other5%

Export destinations EU poultry meat(legmeat, whole birds)

USA

Brazil

M.East

EURusland

Africa

Thailand

• Medium term prospects arepositive.

• Consumption: increase• Production: small increase• export EU: low value

products: stable / decrease• Import EU: higher value

chicken breast: stable

Poultry meat forecast EU

0.0

3.0

6.0

9.0

12.0

15.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Pro

duct

ion,

Con

sum

ptio

n

0.0

1.0

2.0

3.0

4.0

5.0

Tra

de

Production

Consumption

Exports

Imports

EU-15 EU-27EU-12 EU-25

Medium-term forecast for EU poultry meat marketEU production, consumption, trade (mill tonnes cwe)

Source: Eur. commission

International Competition

Production cost farm + slaughter (per kg carcass)

NL G FR US TH BR

cost

per

kg

carc

ass

wei

ght

primary Slaughter

Differencewith low cost

countries 30 to 40%

Regulations in the EU

� Welfare broilers� Lower stocking density / mortality (EU)� Foot pad lessions (NL, DK, Sw)

� Environment � Reduce ammonia emission (EU, NL, G)� Reduce fine dust (EU, NL)

� Food safety � Salmonella control (EU)� Reduction in use of antibiotics (NL)� No meat and bone meal (EU)� Ban on growth promoters (EU)� GMO free / approved feed ingredients (EU)

Free trade Fair trade

Import leviesProduction cost in EU due to public concern

Conclusions poultry meat

� Self sufficiency rate EU-27 around 100%� Economic optimum: Import high value breast

meat and export low value leg meat.

� Production cost not competitive with BR,US,TH,AR

� Free trade or Fair trade: balance between level of:

� Laws and regulations (sustainability)� Import levies

Worldwide Production and Trade:

Current Situation

Part 2. Eggs

Leading hen egg producing countries (FAO,2007)

china37%

usa9%

India 5%

Japan4%

Mexico4%

Russia4%

Brazil3%

other34%

Regional trade in shell eggs Regional trade in shell eggs

eggs in shell72%

liquid egg products

14%

egg powder14%

International trade : 1.7 MT egg equivalent (3% of the world production)

Source: ITAVI from FAO data 2006

+6.2 % per year

+6.2 % per year

+3.7 % per

year

EU Production and trade:

Current Situation

Eggs

Egg production (‘000 tonnes) and self-sufficiency levels (%) in the EU, 2000 - 2009

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Egg

pro

duct

ion

('000

tonn

es)

100,0

100,5

101,0

101,5

102,0

102,5

103,0

103,5

Self-sufficiency (%

)

Volume Self-sufficiency

EU 15 EU 25 EU 27

Egg consumption per capita in the EU, 1998 – 2009 (kg/head)

11

11,5

12

12,5

13

13,5

14

14,5

15

15,5

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Con

sum

ptio

n pe

r ca

pita

(kg

/hea

d)

Consumption (per capita)

EU 15 EU 25 EU 27

EU trade of eggs (equivalent)

Source: Eur. commission

International trade towards EU in eggs / egg products

VS

Argentina

Rusland

IndiaMexico

Japan

Thailand

EU Eggs Exports (egg equivalent, DG Agri, 2009)

Consumption: small increase (UK, NL, diff per

country)

Production: small increase (2015 by Windhorst, IEC)

export EU: to Switersland and Japan: stable

Import EU: egg powder from low costcountries. Increase ?

Eggs forecast EU

International Competition

Production cost Eggs in 2008 outside EU, Farm level (Ect/kg)

1519

10 13 11 11

50

53

37

4038

33

0

10

20

30

40

50

60

70

80

90

100

NL FR US BR ARG IND

euro

cen

t per

kg

manure

electricity

general

housing

labour

other

feed

pullet

Regulations in the EU

� Animal Welfare� Environment

� Food safety

Towards 2012 within EU

1. EU Directive welfare for laying hens2003: Space allowance 550 cm2/hen 2012: Enriched cages with 750 cm2,

laying nest, perch, litter

2. EU: Beaktrimming before 10 days (ban in NL, UK, G ?)

3. Netherlands (2012) and Germany (2010): colony cage with 890 cm2 per hen.

Alternative / barn:

Perch

Laying nest

Litter

More space

Enriched cage

Perch

Laying nest

Litter

Cage height

More space

Housing systems

Meer space per hen, increase in production cost ….

93 96 100108 110

122

0

20

40

60

80

100

120

140

cage 350-400 cm2(world)

`cage 430cm2 (US)

cage 550cm2

enrichedEU

Colony Aviary

%

Free trade ?

• In 2012 large difference in housing system EU and rest of the world

• Additional increasein production cost of 8%

• Protection onEU borders ?

Eggs: breaking and drying into egg powder

Long shelf life and low transport cost

Free trade Fair trade

Lower import levies

Increase in production cost in EU due to public concern

EU policy Common Agricultural Policy (CAP) and WTO:

Reform of the last 20 years (L. Hoelgaard, DG Agri)

� Lower intervention prices and safety net (milk, cereals)� Reduction/abolition of export refunds (milk, cereals, meat) � Improved market access (quota, bilateral agreements)

� Consequence: market orientation � Respect of Good Agricultural and Environmental

Conditions

Common Agricultural Policy EU (CAP)

Thanks to the CAP reforms, the EU can have a high level of ambition in the WTO Doha round: Offering:

� Domestic support: � Reduction of Trade-Distorting Support for the EU.

� Market access: � large average tariff cut for the EU;

� Export subsidies: � elimination of subsidies by 2013

� Draft modalities: significant tariff cuts (average 60%) with preserving flexibilities for sensitive products (with increased market access).

� Future safeguard for Poultry meat / eggs and egg products ?

WTO – the EU position (L. Hoelgaard DG Agri)

EU position in the worldPlanet

Climate chanceEnergy savingGM cropsEnvironment (NH3)

PeopleFoodsafetyAnimal welfareUse of antibiotics

ProfitFair incomeFair competition

Thanks for your attention

peter.vanhorne@wur.nl