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

Part 1. Poultry meat Worldwide Production and Trade: Current Situation

Main players in broiler meat production usa 21% other 32% china Russia 14% 3% brazil India EU 13% 3% 11% mexico 3% Europe: ranking UK nr 9 en Spain nr 12

World: Main trade flows poultry meat Dominated by Brazil and USA (together 75%) EU Russia US Japan TH Thailand Brazil

Poultry meat EU Production and trade: Current Situation

Evolution of poultry production in the EU (‘000 tonnes) 14000 1,1 1,08 12000 1,06 10000 Production ('000 tonnes) Self-sufficiency (%) 1,04 8000 1,02 6000 1 4000 0,98 EU 25 EU 27 EU 15 2000 0,96 0 0,94 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Production Self-sufficiency Source: Agraceas / EU

Consumption in the EU, total (‘000 tonnes) and per capita (kg/head) 14000 25,0 BSE BSE BSE BSE 24,0 12000 23,0 Consumption ('000 tonnes) 10000 Consumption (kg/head) 22,0 HPAI 8000 21,0 6000 20,0 4000 19,0 EU 15 EU 25 EU 27 2000 18,0 0 17,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total Per capita Source: Agraceas / EU

EU trade of poultry meat Source: Eur. commission

EU imports of poultry meat, 2009 (volume, %) other Chili 5% 4% Thailand 16% Brazil 75% Brazil: Frozen / salted Chicken breast Thailand: Cooked chicken breast Source: Eur. commission

Export destinations EU poultry meat (legmeat, whole birds) Rusland EU USA M.East Africa Thailand Brazil

Poultry meat forecast EU • Medium term prospects are positive. • Consumption: increase • Production: small increase • export EU: low value products: stable / decrease • Import EU: higher value chicken breast: stable

Medium-term forecast for EU poultry meat market EU production, consumption, trade (mill tonnes cwe) 15.0 5.0 EU-12 EU-15 EU-25 EU-27 12.0 4.0 n Production tio p m 9.0 3.0 u s n e o d , C ra T n tio Consumption 6.0 2.0 c u d ro Exports P 3.0 1.0 Imports 0.0 0.0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Source: Eur. commission

International Competition

Production cost farm + slaughter ( per kg carcass) Difference with low cost countries cost per kg carcass weight 30 to 40% NL G FR US TH BR primary Slaughter

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 Production cost in Import levies 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

Part 2. Eggs Worldwide Production and Trade: Current Situation

Leading hen egg producing countries (FAO,2007) other china 34% 37% Brazil 3% usa Japan India Russia 9% 4% 5% 4% Mexico 4%

Regional trade in shell eggs Regional trade in shell eggs

International trade : 1.7 MT egg equivalent (3% of the world production) ���������������� egg powder 14% liquid egg products 14% ���������������� eggs in shell 72% ����������� ����� Source: ITAVI from FAO data 2006

Eggs EU Production and trade: Current Situation

Egg production (‘000 tonnes) and self-sufficiency levels (%) in the EU, 2000 - 2009 8.000 103,5 7.000 103,0 6.000 Egg production ('000 tonnes) 102,5 Self-sufficiency (%) 5.000 102,0 4.000 101,5 3.000 101,0 2.000 EU 27 EU 15 EU 25 100,5 1.000 0 100,0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Volume Self-sufficiency

Egg consumption per capita in the EU, 1998 – 2009 (kg/head) 15,5 15 Consumption per capita (kg/head) 14,5 14 13,5 13 12,5 12 EU 15 EU 25 EU 27 11,5 11 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Consumption (per capita)

EU trade of eggs (equivalent) Source: Eur. commission

International trade towards EU in eggs / egg products Rusland VS Japan Mexico India Thailand Argentina

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

Eggs forecast EU 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 ?

International Competition

Production cost Eggs in 2008 outside EU, Farm level (Ect/kg) 100 90 manure 80 electricity 70 general euro cent per kg 60 housing labour 50 53 other 40 50 feed 40 30 38 37 33 pullet 20 10 19 15 13 11 11 10 0 NL FR US BR ARG IND

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 …. 140 122 110 108 120 100 96 93 100 80 % 60 40 20 0 cage 350- `cage 430 cage 550 enriched Colony Aviary 400 cm2 cm2 (US) cm2 EU (world)

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 Increase in Lower import production cost in levies EU due to public concern

EU policy Common Agricultural Policy (CAP) and WTO:

Common Agricultural Policy EU (CAP) 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

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

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