Overview of the European Egg Market EPC Conference, 18 th October - - PowerPoint PPT Presentation

Overview of the European Egg Market

EPC‐Conference, 18th October 2011 Enno Herlyn

• 1. Actual European egg market
• 2. Cage Ban from 1.1.2012

‐ Impact of the cage ban – the example of Germany

• 3. Outlook and conclusion

Overview of the European Egg Market

1.Actual European egg market

Overview of the European Egg Market

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• 1. Actual European egg market

Per Capita Consumption of Eggs in the EU, 2010

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• 1. Actual European egg market

Development of production and consumption

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• 1. Actual European egg market

Self Sufficiency

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• 1. Actual European egg market

Supply balance

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World production

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• 1. Actual European egg market

Prices

2011: Further price decline due to Dioxin crisis to 5.4 € (~7.7 $) 2010: egg shortage due to transformation period + high demand (Easter) highest price 14 € (~ 20 $)!

Actual Situation in Europe Reduction of placements in Europe

Placements of layer chicks in 06.2011 in comparison to 06.2010 (ema) France ‐ 16,0% Italy +/- 0,0% Spain ‐ 11,7% Poland ‐ 19,3% Germany + 4,0% Portugal +/- 0,0% UK ‐ 5,1%

• 2. Cage Ban from 1.1.2012

Overview of the European Egg Market

• 2. Cage Ban
• EU – Derective 1999/74/EG from 19.7.1999 for all

EU-Countries: No conventional cage as of 1st January 2012

• 2. Cage Ban
• The directive decided that:
• from January 1st, 2012 on all cages will be

prohibited.

• from January 1st, 2003 on no such cages must be

installed in EU member countries.

Member countries may decide to ban cages earlier

and to tighten regulations of the directive

ISPA

• 2. Cage Ban for example Germany

Legal background (1)

• The German administration made use of the regulation in

Directive 1999/74/EC that the member countries could tighten the regulations of the directive and apply the directive earlier than January 1st, 2012.

• In 2006, the German Parliament (Bundestag) passed the

Animal Welfare Law which stated that: conventional cages would be prohibited in Germany by January 1st, 2009 (three years earlier than in other member countries of the EU), the regulatory statutes for keeping laying hens would deviate from the EU directive in the following way:

ISPA Legal background (2):

• Enriched cages according to Directive 1999/74/EC would

not be permitted in Germany.

• Instead, colony nests (Kleingruppenhaltungen) would be permitted, if:

Enriched Cage Europe vs. Colony Cage Germany

Legal background (3):

Enriched cage Colony cage

Minimum area 20.000 cm² (3100 sq inch) 25.000 cm² (3875 sq inch) Minimum area per Layer 750 cm² (116 sq inch) 800 cm² (124 sq inch)

• ver 2 kg 900 cm²

Hight of the cages 20 cm (7.9 inch) at every point, including the perch area 45 cm (17,7 inch) partly 20 cm (7,9 inch) possible. Nest Yes, but not defined 90 cm² Litter Yes, but not defined 90 cm² Perch per layer 15 cm (5.9 inch) 15 cm (2 levels) Feed offering per layer 12 cm (4,7 inch) 12 cm

The transformation process:

• The transformation of cages to alternative systems began in 2007, but

most of new systems were not implemented before 2009 and 2010.

• In the fourth quarter of 2009, many egg companies placed pullets in their
• ld cages because of the lower production costs.
• In 2010, the leading food retailers announced that they would no longer

list eggs produced in any form of cages, including colony nests (pressure

• f NGOs).
• The installation of colony nests immediately stopped and most of the egg

companies switched to barn systems, which caused high financial losses.

Development of German egg production (in 1,000 t)

• continuous decrease of egg production since

2000

• impacts of the banning of cages

Decrease by 23.5 %

FAO / EMA 2011

Development of the German self sufficiency rate between 2002 and 2009

• The self sufficiency rate fell from 74 % to only 59 % in 2009, while the

share of imports increased by 1.4 billion eggs (between 2008 and 2009).

258 246 251 273 307 346 391 430 67,4 59,0 67,8 68,5 70,6 70,7 71,2 74,0 50 100 150 200 250 300 350 400 450 2002 2003 2004 2005 2006 2007 2008 2009 Import volume of shell eggs in 1,000 t 50 55 60 65 70 75 80 Self sufficiency rate in %

Import volume of shell eggs in t Self sufficiency rate in %

Development of German shell egg imports between 2008 and 2010; data in mill. pieces

Imports 2008 2010 Change absolute (mill.) % Total 5,606 7,701 + 2,095 + 37.4 Imports from: Netherlands 4,203 5,427 + 1,224 + 29.1 Poland 404 674 + 270 + 66.8

Import share of the Netherlands: 2008: 75.0 % 2009: 77.6 % 2010: 70.5 % Share of the Netherlands regarding Germany´s import increase: 58.4 % MEG

Results: _______________________________________________

• Layer flocks in Germany decreased by over 15.6 %

between 2005 and 2010.

• Egg production decreased by over 800 mill. pieces

between June 2009 and June 2010.

• The self sufficiency rate fell from 74 % to only 59 %.
• Shell egg imports increased from 5.6 billion eggs in

2008 to over 7 billion eggs in 2009.

• About 200 mill. € were invested by the industry to meet

the German legal regulations.

• At the end of 2010, about 18 % of the layers were housed

in so-called „Kleingruppenhaltungen“ and enriched cages.* Most of the layers were housed in barn systems (62.8 %). Organic systems shared 6.2% and free range systems 12.9 %.

Status of reconstruction

Layer in production (total 2010) Cage Production 2010 Status of reconstruction (Estimation) Italy 49 Mio. 75% 50% France 45 Mio. 78% 70% Spain 44 Mio. 96% 40% Germany 41 Mio. 20% 100% UK 34 Mio. 52% 90% Poland 37 Mio. 92% 50% Netherlands 33 Mio. 66% 90% Belgium 9 Mio Portugal 6 Mio. 50% Hungary 5,5 Mio 75 %

Costs…….

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• 3. Outlook and conclusion

Overview of the European Egg Market

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Development of the population

Breeding for success....together Quelle: UN Population Reference Bureau

F

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Development of the population

Breeding for success....together Quelle: UN Population Reference Bureau

F

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• 2. Outlook

Conclusion Europa

• Cage production is going back. Alternative systems coming up.
• Consumers and trading companies determines more and more
• markets. It will be interesting to be seen when the last cages are

changed in Europe and how a change in consumer behavior affect the production structure.

• Due to the delayed and slow change in the production and use of the
• ld systems to the end the forecast will be right that there will be no

decline in egg production in 2011.

• During the year 2012, but - at least temporarily, we will see a

decreasing egg production. This will then also lead to a discharge to the European markets and thus hopefully lead to a increase of the egg price.

Conclusion World

The world egg production will increase further.

• a. Population growth by enhancing growth rate (2050 about 30%

increase).

• b. Rising per capita consumption (instead of 154 to 194 eggs, then

cover eggs). If the current trend continues, it is necessary to increase the production by 64%).

• Eggs are a good opportunity to satisfy the increased demand for

animal protein.

• A limiting factor could be the availability of feed.

Thank you for your attention