british egg industry council

BRITISH EGG INDUSTRY COUNCIL1

Developments within the European Egg Industry

Presentation to Irish Poultry and Egg Conference, Monaghan,on 7th November 2012

Mark Williams

BRITISH EGG INDUSTRY COUNCIL

2011 and 2012 –2 Years of Momentous Change

• Implementing new animal welfare legislation

• EU Wholesale egg price spike

• Trying to cope with high feed prices

• Ongoing trade negotiations

• But…more good news on egg nutrition & rising sales

BRITISH EGG INDUSTRY COUNCIL3

EU Egg Industry

• Successful

• Unsupported

• Highly efficient

• Innovative

• Reactive to Consumer demand for eggs

• Free range, Barn, Organic, Enriched colony cage, Speciality (eg Omega-3)

BRITISH EGG INDUSTRY COUNCIL

EU Egg Industry Background (2011 F)

• Egg Production (for human consumption, including imports, less exports, less hatching eggs) (source: EC)– EU – 27 6.133 million tonnes

• Egg consumption (EU-27) (source: EC)

– 204 eggs/capita/annum, or 12.23 kg/capita/annum

• Exports – 216,000 tonnes (3.5% of production) (source: EC)

• Imports – 16,000 tonnes (0.3% of production) (source: EC)

• Self-Sufficiency - 102.9%

BRITISH EGG INDUSTRY COUNCIL

Source FAO. Presented by EC at Eggs and

Poultry Advisory Group on 11/10/2012

5

World Hen Egg Production (2010 = 65.57 Million T)

10 "Countries" = 79.6% of the total production

China = 37.5% of the total

0

5.000

10.000

15.000

20.000

1000 T

2008

2009

2010

BRITISH EGG INDUSTRY COUNCIL

Number of EU Laying Hens by System of Production (‘000) (2004 – 2012F)

34.2 m Romanian ‘back-

yard’ hens included as FRNon-compliant hens

from 1/1/12Enriched cage included

for first time

BRITISH EGG INDUSTRY COUNCIL7

Implementing the Welfare of Laying Hens Legislation

• January 2012 - 51m non-compliant hens

• January 2012 – ‘Letter of Formal Notice’ sent to 13 non-compliant member states

• June 2012 – ‘Letter of Reasoned Opinion’ sent to 10 non compliant member states– Commission currently considering responses

• Next step is referral to European Court of Justice

• 2013 – Fines?

• October 2012 – 5(?) member states non compliant = 23 million hens

• Will the EU be fully legal by 2013 – unlikely!

BRITISH EGG INDUSTRY COUNCIL8

The Action Plan

• Action Plan requires;

• Eggs from conventional cages can only go for processing in the member state of origin and cannot be exported

• Egg products created can only be used in food products or industrial products manufactured within the member state of origin

• (However, food products made from non-compliant egg products can be traded across the EU)

BRITISH EGG INDUSTRY COUNCIL

Source: EC: EU market situation for Eggs

and Poultry, Advisory Group 11/10/12

9

85

105

125

145

165

185

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Price

Pac

kers

stat

ion

€uro

/ 100

kgEvolution of the weekly EU

average price for Eggs for Consumption

Avg 07 - 11 2009 2010 2011 2012

BRITISH EGG INDUSTRY COUNCIL

180

200

220

240

260

280

300

Non GM GM

Source: NFU

Mid-Lay Feed Ration Prices (£/t)(January 2010 – November 2012)

BRITISH EGG INDUSTRY COUNCIL

• Multilateral - Doha Development Agenda– no progress

• Bilateral– Ukraine – agreed, but not ratified

– Canada – to be finalised soon

– India – to be finalised soon

– Japan – just started

– USA – to start Spring 2013

– Mercosur - ongoing

• Need sensitive product status on vulnerable tariff lines

Trade negotiations

BRITISH EGG INDUSTRY COUNCIL

Source - EC

12

Compared

tonnes % tonnes % tonnes % tonnes % tonnes % to Jan-Jul 11

USA 4 245 18.6% 11 165 36.7% 13 439 42.9% 5 417 28.4% 9 623 42.0% + 153%

Argentina 6 164 27.0% 7 899 26.0% 7 888 25.2% 7 898 41.5% 7 036 30.7% + 86%

Mexico 2 002 8.8% 1 893 6.2% 1 425 4.5% 556 2.9% 1 017 4.4% + 427%

Albania 2 209 9.7% 1 659 5.5% 3 208 10.2% 1 303 6.8% 1 182 5.2% + 310%

India 6 593 28.9% 5 776 19.0% 3 211 10.2% 1 505 7.9% 1 307 5.7% + 26%

Israel 646 2.8% 711 2.3% 941 3.0% 547 2.9% 796 3.5% + 85%

Canada 1 0.0% 33 0.1% 2 0.0% 0 0.0% 67 0.3%

Brazil 64 0.3% 67 0.2% 0 0.0% 0 0.0% 0 0.0%

EXTRA EU 25/27 22 850 30 409 31 356 19 045 22 903

% change + 33% + 3% - 39% + 111.2%

2008 2009 2010 Jan-Jul 122011

EU Imports of Eggs:

Trade Figures (Comext – tonnes egg equiv.)

BRITISH EGG INDUSTRY COUNCIL

Commissioned by EUWEP (EU association for egg packers, traders and egg processors)

Updates reports published in 2003 and 2005

BRITISH EGG INDUSTRY COUNCIL

EU legislation in 2010: production cost of eggs

1.2%

0.2%

1.2%

1.2%

0.6%

1.0%

3.5%

91.2% 8.8%

N directive

ammonia emission

salmonella

Meat and bonemeal

gmo

beaktrimming

density (550 cm2)

production cost basic

Source: EUWEP

BRITISH EGG INDUSTRY COUNCIL

EU legislation in 2012: production costs of eggs

1.1%0.3%1.1%

1.1%0.7%0.9%

3.3%

6.6%

84.9% 15.1%

N directive

ammonia emission

salmonella

Meat and bonemeal

gmo

beaktrimming

density (550 cm2)

enriched cages

production cost basic

Source: EUWEP

BRITISH EGG INDUSTRY COUNCIL

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

84

66 63 60 68

6

-

3

11 19 19

18

30 30 30

30

0

20

40

60

80

100

120

140

EU UKR USA ARG IND

cent per

kg

production cost (excl EU-Directive) cost of EU-Directive transport levy on importsSource: EUWEP

BRITISH EGG INDUSTRY COUNCIL

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

477

377 380 358 381

26

--

3

9 15 16

15

137 137 137

137

0

100

200

300

400

500

600

EU UKR USA ARG IND

ce

nt p

er

kg

production cost (excl EU-Directive) cost of EU-Directive transport levy on imports

Source: EUWEP

BRITISH EGG INDUSTRY COUNCIL

Offer price whole egg powder Germany (Euro/kg), (50% reduction in import tariff and 10% lower exchange rate)

(‘worst case’)

477

339 342 323 343

26 3

9 15 16

15

69 69 69

69

0

100

200

300

400

500

600

EU UKR USA ARG IND

cent per

kg

production cost (excl EU-Directive) cost of EU-Directive transport levy on imports

Source: EUWEP

BRITISH EGG INDUSTRY COUNCIL

Free trade Fair trade

Import levies Production cost in EU due to public concern

BRITISH EGG INDUSTRY COUNCIL

(1999)

Barn

5.8%

Free

Range

16.4%

Cage

77.8%

UK Egg Market Split, by System of Production (Volume)

(Source: Defra, UK Packing Station Throughput)

The UK egg market is led by market demand

BRITISH EGG INDUSTRY COUNCIL

New egg data

BRITISH EGG INDUSTRY COUNCIL

Eggs for Action!

BRITISH EGG INDUSTRY COUNCIL

British Egg Week

BRITISH EGG INDUSTRY COUNCIL

British Egg Week

BRITISH EGG INDUSTRY COUNCIL

Retail Egg MarketConsumer Purchasing 2008 – 2012

Volume(000s boxes)

% change(year on year)

2008 12,703 +0.3

2009 12,765 +0.5

2010 12,966 +1.6

2011 13,431 +3.6

2012 (year to 30 Sept - annualised)

14,126 +5.2

BRITISH EGG INDUSTRY COUNCIL26

Conclusions

• EU has the most modern industry in the world

• A huge achievement– should be proud of this

• UK - Confidence restored in British eggs– Lion Quality Scheme– Industry restored to growth

• but … always alert for new emerging issues

BRITISH EGG INDUSTRY COUNCIL

Thank you for your attention

mark.williams@britisheggindustrycouncil.com