Competitiveness of the EU egg and poultry meat sector. Peter van Horne LEI Wageningen UR Poultry Day at Eurotier, November 2014

Transcription

1 Competitiveness of the EU egg and poultry meat sector Peter van Horne LEI Wageningen UR Poultry Day at Eurotier, November 2014

2 LEI research Institute Agricultural Economics Research Institute (LEI) Independent Research Institute, the Netherlands Part of Wageningen University and Research Centre Competitiveness of the EU poultry sector: - LEI Report (poultry meat). Updated - LEI Report (egg industry) Update in progress

3 Content presentation Poultry meat sector / Egg sector World wide development Position of EU Production costs in selected countries EU legislation Competitiveness Free trade Future perspective

4 Poultry meat production

5 World wide development poultry meat Poultry meat will be the largest meat sector in the world in 2020 (mln tonnes) FAO/OECD, outlook 2014

6 Main players in chickenmeat USA largest producer of chickenmeat / EU 4th in ranking with 12% Source: FAO/ MEG Bilanz

7 Main players in chickenmeat Growth in kg poultry meat/ sq km: High growth in India / Indonesia EU share from 12% in 2010 to 10% in 2030 Source: FAO

8 4. Position of Europe

9 Balance poultry meat EU ( 000 tonnes) Import: 2012 average value 261 euro/100 kg Export: 2012 average value 144 euro/100 kg Source: Eur. commission

10 Economic Importance 1. Production: 12.9 million ton 9.9 mln ton broiler turkey + duck + other 2. Total production value in 2012: 32 billion euro 3. Employment: persons With 20,000 commercial farms (> 5000 birds)

11 Method production costs broiler meat Collecting basic data on production, 2011 / 2013 Countries in EU : NL, DE, FR, UK, IT, ES, DK, PL, HU Countries non EU : USA, THA, BRA, ARG, RUS, UKR NL calculation method Focus on: Primary: feed, doc, housing, labour Processing: plant, equipment, labour Transport cost to market

12 Production costs broiler farm and slaughter 2013 (Euro/kg CW) in EU countries Average 173 euro/kg CW with range + or 8%

13 Production costs broiler farm and slaughter 2013 (Euro/kg CW) in third countries BRA and ARG 32%, UKR 23%, USA -22%

14 Legislation Environment Nitrate Directive / IPPC Directive Reduce ammonia emission Food safety Salmonella control No meat and bone meal Ban on growth promoters GMO feed ingredients Welfare broilers Housing conditions (density / mortality)

15 Costs related to EU Legislation at farm level Production costs 2011 are 94.6 euro/kg. Share 5% Difference between countries

16 Legislation Focus on farm level Industry Salmonella control Ban on Meat and bone Meal (disposal offal) Stunning of poultry Origin labelling Recent legislation / National legislation Reduce fine dust (NL, DE) Foot pad lessions (NL, DK, Sw) Reduce use of antibiotics (NL, DK) Campylobacter prevalence

17 Scenarios for the future Import tariffs on poultry meat. Reduction as a result of WTO agreement Multilateral or bilateral agreements Exchange rates large fluctuation. Scenario examples: 50% reduction in import tariff (no additional levy) 10% change in exchange rate to Euro

18 Calculating offer price Production cost farm level and slaughter Additional: Cut up bird Deboning breast cap Revenue other parts Revenue offal Calculated offer price fillet

19 Situation 2013: Offer price breast fillet EU and non EU (E/kg)

20 Scenario 1: 50% lower basic levy, no additional levy 2013 Offer price breast fillet EU and non EU (E/kg)

21 Scenario 3: 50% lower basic levy and 10% lower exchange rate Offer price breast fillet EU and non EU (E/kg)

22 Conclusions poultry meat Poultry meat sector: production value of 32 billion euro in 2012 and more than 300,000 persons employed. Many EU regulations on environment, food safety and animal welfare. Third countries: no or very little legislation. Third countries have significant lower production costs farm and slaughter Quota and Import levies protect EU from large volumes of imports of poultry meat. Future perspective: Further increase of legislation/ regulations Lower import levies or more market access

23 Egg production

24 Development of egg production per continent (mill.ton) Source: FAO

25 Leading hen egg producing countries Source: FAO/ MEG Bilanz

26 Growth in kg eggs / sq km: High growth in India / Indonesia EU share from 10% in 2010 to 9% in 2030 Source: FAO

27 4. Position of Europe

28 Balance eggs EU ( 000 tonnes) Import: 2013 average value 146 euro/100 kg egg eq. Export: 2013 average value 105 euro/100 kg egg eq. Source: Eur. commission

29 Method production cost eggs Collecting basic data on cage production, 2010 Countries in EU : NL, FR, ES, IT, UK, DK, PL Countries non EU : UKR, USA, ARG, INDIA NL calculation method Focus on: Primary: pullet, feed, housing, labour Processing: plant, equipment, labour, energy Transport cost to market

30 Production costs eggs 2010 (Euro/kg) in some EU countries

31 Production costs eggs 2010 (Euro/kg) in selected non EU countries

32 Processing costs whole egg powder 2010 (E/kg) in non-eu countries

33 Offer price shell eggs in Germany 2010 (Euro/kg)

34 Offer price whole egg powder Germany 2010 (Euro/kg)

35 EU legislation Environment Nitrate directive (max amount N on land) Ammonia emission (Nat. Emission Ceiling) Food Safety Zoonoses directive / Salmonella control Ban on Meat and Bone meal (MBM) Restriction on use of GM crops Animal welfare Density, 550 cm2 per hen (since 2003) Beak trimming regulations Housing systems (directive 99/74/EC)

36 EU legislation in 2010: production costs of eggs

37 EU legislation: housing systems EU legislation EU directive: Enriched 100 cages % Alternative 80 systems 60 Gmo 40 MBM 20 etc. 0 `cage 450 cm2 cage 550 cm2 enriched EU barn

38 EU legislation in 2012: production costs of eggs

39 Offer price eggs in Germany 2012 (Euro/kg)

40 Offer price whole egg powder in Germany 2012 (Euro/kg)

41 Scenarios for the future Import tariffs on eggs and egg products. Reduction as a result of WTO agreement Multilateral or bilateral agreements Exchange rates large fluctuation. Examples: 50% reduction in import tariff 10% change in exchange rate to Euro

42 Offer price whole egg powder Germany (Euro/kg) scenario 1 (-50% import tariff)

43 Offer price whole egg powder Germany (Euro/kg), scenario 3 combination or worst case

44 Conclusions eggs Third countries have lower cost at farm level compared to EU average Many EU regulations on environment, food safety and animal welfare. Some countries with additional national regulations. In 2012 change to enriched cages: estimate total cost of EU regulations is 15% of production cost Import levies protect EU from large volumes of imports of eggs and egg products.

45 Free trade agreements WTO: no world wide general agreement on free trade Trend: Bi-lateral and multi-lateral agreements EU with: India / Ukraine / Canada / USA USA EU Talks on lower import levies and more Market access agr. products

46 Free trade Fair trade Production cost in EU due to public concern Import levies

47 Legislation / market demand Regulations and Legislation will further increase production costs Attention for Sustainability; Animal welfare Food safety Environment Ethics Challenge: higher market prices for more sustainable produced broilers and eggs

48 Thanks for your attention. LEI Wageningen UR