Perspective for poultry meat and eggs in the EU Peter van Horne - - PowerPoint PPT Presentation

Perspective for poultry meat and eggs in the EU

Peter van Horne Poultry 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% china 14% brazil 13% EU 11% mexico 3% India 3% Russia 3%

• ther

32%

World: Main trade flows poultry meat

Dominated 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)

2000 4000 6000 8000 10000 12000 14000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Production ('000 tonnes)

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)

2000 4000 6000 8000 10000 12000 14000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Consumption ('000 tonnes)

17,0 18,0 19,0 20,0 21,0 22,0 23,0 24,0 25,0

Consumption (kg/head) Total Per capita

EU 15 EU 27 EU 25

Source: Agraceas / EU

BSE BSE BSE BSE

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

Brazil 75% Thailand 16% Chili 4%

• ther

5%

Export destinations EU poultry meat

(legmeat, whole birds)

USA Brazil M.East EU Rusland Africa Thailand

• Medium term prospects are

positive.

• 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

P ro d u c tio n , C

• n

s u m p tio n

0.0 1.0 2.0 3.0 4.0 5.0

T ra d e

Production Consumption Exports Imports

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

Medium-term forecast for EU poultry meat market EU 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 carcass weight

primary Slaughter

Difference with 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 levies Production 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)

china 37% usa 9% India 5% Japan 4% Mexico 4% Russia 4% Brazil 3%

• ther

34%

Regional trade in shell eggs Regional trade in shell eggs

eggs in shell 72% liquid egg products 14% egg powder 14%

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

Source: ITAVI from FAO data 2006

EU Production and trade:

Current Situation Eggs

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

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 production ('000 tonnes)

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

Consumption per capita (kg/head) 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 India Mexico 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 cost

• countries. Increase ?

Eggs forecast EU

International Competition

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

15 19 10 13 11 11 50 53 37 40 38 33

10 20 30 40 50 60 70 80 90 100 NL FR US BR ARG IND

euro cent per kg

manure electricity general housing labour

• ther

feed pullet

Regulations in the EU

Animal Welfare Environment Food safety

Towards 2012 within EU

• 1. EU Directive welfare for laying hens

2003: 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.

• Housing systems

Meer space per hen, increase in production cost ….

93 96 100 108 110 122 20 40 60 80 100 120 140

cage 350- 400 cm2 (world) `cage 430 cm2 (US) cage 550 cm2 enriched EU Colony Aviary

%

Free trade ?

• In 2012 large difference in housing system

EU and rest of the world

• Additional increase

in production cost of 8%

• Protection on

EU 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 world

Planet

Climate chance Energy saving GM crops Environment (NH3)

People

Foodsafety Animal welfare Use of antibiotics

Profit

Fair income Fair competition

Thanks for your attention

peter.vanhorne@wur.nl