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THE HUNGARIAN EGG SECTOR

Dr. Györgyi Molnár – Péter Földi

Hungarian Poultry Product Board

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The presentation….

1. Hungary in facts

2. Poultry Product Board

3. Egg production

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Hungary in facts I.

Population: 10, 014 millionLand area: 9,303 million ha

Agricultural Land: 5,337 million haArable land: 4,322 million haCereals: 2,6 million ha (wheat, corn)

Animal husbandry:Cattle: 682 000 Pig: 3,2 millionSheep: 1,2 millionHorse: 65 000Poultry: 36 million

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The Poultry Product Board (PPB) of Hungary – Who we are?

Non-profit, non-governmental organization, represents the

vertical poultry production-chain. It is able to operate self-

regulation and represents the industry at national and European

level as well.

Duties, responsibilities: Forum for reconciliation in the industry,

market-regulation – self regulation, advocacy, lobbying,

marketing.

Information: collecting and processing data, informing the

members about EU and domestic trends, changes of laws,

collaborate with the Ministry of Rural Development and the

authorities.

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Structure of the PPB

Number of members in 2014: 1793 Six member associations:

536

261625

301 126

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broilerturkeygooseducklayerfree range

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Structure of the PPB – according to the activites

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6143

252

36

113

1402

55

18 40 23

52Breeders with grandp.’ s stocks

Breeders with parent’ s stocks

Hatcheries

Rearing farms for fattening

Rearing farms for pullets

Table-egg producers

Fattening poultry farms

Poultry slaughterhouses

Further processors

Domestic traders

Export-import traders

Other activities (assoc. partners)

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Egg production…..

Egg sector in Hungary

breedingGrandparent/parent stocks (hatching)

productionGrading/ packaging

• 100% - Hungarian ownership

• „own” breeding company

• 70% of day old chicks hatched In Hu

• Most of the producers have own packaging centres

as well (and partly own feed mill)

• 2 big packaging centres also integrate producers

Laying hens population01. 12. 2013.

thousand hens

Breeding stocks* 3 100

backyard, seasonal 6 200

intensive 3 800

Total 13 100

*including broiler breeders

Backyard production

- depending on the feed price: cheap cereal – more

hens/eggs

- market size is not forecastable

- the government wants to increase the ratio of the

backyard population – giving work and income to people

living on low standard

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Capacities of the egg production farms

< 350 350-1000 1001-10000 10001–40000 40001–100000 100 001< under constr.0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

26.73

13.03

39.26

9.64

3.892.37

5.08

1.07 0.80

13.57

20.87

26.59

37.09

% of farms % of hens

591 farms 6 020 259 hens Source: NFCSO, aug. 2012. , PPB calculation

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Proportion of the different production systems in Hungary (2012)

Capacity: 6 million, farms: 561, hens in: 3,8 million

0.66 0.52

16.99

81.83

bio-

free range

alternative

cage

Source: NFCSO, aug. 2012. , PPB calculation

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Jérc

etel

epít

és (

ezer

db

)Placement of laying chicks in Hungary (‘000)

(2000-2013)

Source: PPB, 2013

Pla

cem

ent

of la

yin

g ch

icks

(‘0

00 h

ead

s)

Table egg production in Hungary on intensive farms(In million eggs) (2000-2013)

Source: PPB, 2013

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Étk

ezés

i to

jás

(mil

lió

db

) T

able

egg

(m

illio

n p

iece

s)

389

265217

0

50

100

150

200

250

300

350

400

450

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

To

jás

fog

yas

ztá

s (t

ojá

s/f

ő/é

v)

Egg consumption (egg/capita/year) (1980-2011)

Source: CSO, 2013

Egg

con

sum

pti

on (

egg/

cap

./yea

r)

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Men

nyis

ég (t

onna

)

Héjas tojás export Héjas tojás import Étkezési tojás export Étkezési tojás import

Export – Import statistics of egg (tons)(2003-2012)

Source: CSO, 2013

Export: Romania, Austria, Slovenia, Germany, LithuanaImport: Slovakia, Germany, Poland, Lithuana

Vol

um

e (t

ons)

Hungary became netto importer on table eggs

Egg in shell export Egg in shell import Table egg export Table egg import Egg in shell import

70

80

90

100

110

120

130

140

150

160

170

180

190

2010. január 2010. július 2011. január 2011. július 2012. január 2012. július 2013. január 2013. július

(%)

Takarmány (tojó I.) árának változása (%)

Étkezési tojás (M+L; dobozos+tálcás; barna héjú, ketreces) csomagolóhelyi átlagáárának változása (%)

Price change at feed and eggs(January 2010 = 100%)

Source: Szöllösi, based on AKI PaIR and PPB data

Change at feed price (%)

Change at egg (M+L, cage system) (%)

Effects of the accession to the EU- I.

Closed, protected market became opened

Even small surplus of the main egg producer countries

can cause problems on the small Hungarian market

(3-4 million poor people take only the price into

account )

Price politics of the commercial chains is based on

small size and mixed (S+M, S+L) packed eggs

Administrative market intervention of the EU (Cage ban) causing price cycles

But: low price remains longer than the high price in case of lack of eggs

Amount of the Hungarian import depends on the price (in Euros) but on the exchange rate of the HUF as well

Threats of importing from third countries

Effects of the accession to the EU- III.

Consequence of the accession to the EU

Hen population decreases

Number of producers decreases

Lost self sufficiency in eggs

Only those producers have profit, who have import

activities as well

Price pressure

Bigger warehouse stocks from time to time

Storm clouds….

Clouds above the egg industry

No economic reserve any more No resource for development Competitiveness decreases VAT is 27% Black-market is relative big Dominance of chain stores (actions of the NGO-s, animal welfare politics in the

EU) Import pressure Low egg consumption

Investment demand in the whole poultry industry, 2014-2020

Production Million Eur Billion FT Developement goals

Broiler- 483 145Modernisation and building new stalls, development of technologies

Turkey- 183 55Development in the supply chain, product development

Goose- 117 35 Breeding, technology

Duck- 167 50 Technology

Table egg 100 30

Increasing of hen population (targeting self sufficiency) Stall and technology development (partly in production and in packaging centre),

Total 1050 315

The way to reach our targets

Investment program – with subsidy

Strong collaboration with the government

Opening to the chain store – discussions

Special agricultural credit with low (subsidised) interest

Marketing programs (to increase egg consumption)

Decrease the VAT

Initiate to change regulation(s)

Trademark on the poultry meat….

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…and on the eggs!

Possible results

10-12 thousands extra working places (periodically and continually)

Better product quality Loyalty to the „logo-products” Higher consumption Higher self sufficiency rate (more export) More tax to the government Smaller black-market Stable production level (hens and eggs) Stable market

-

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Thank you very much for your attention!

gyorgyi.molnar@magyarbaromfi.huwww.mbtt.hu

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