Despite a tough and challenging year in 2007, both the egg and poultrymeat industries of the EU managed to hold their ground last year.

Rising pressure from feed costs throughout 2007 did not have the effect of causing a downturn in production in either sector. Overall there was a 1% rise in egg output and a 3% rise in poultrymeat output for the EU.

In many member states there was little change in egg output from 2006-07, but a 12% expansion in Spain took production there to over 1m tonnes for the first time.

This alone would have added nearly 2% to EU output, and a 3% expansion in another leading industry, The Netherlands, would have taken the EU total still higher.

However, a 1% cut-back in the massive French sector, alongside a 4% decline in UK, output were the main checks to overall growth in the EU egg sector.

One effect of these diverging fortunes was that Spain has now overtaken France as the leading egg producer in the EU. French output has been in decline for three successive years.

As a result of these trends, production in the former EU-25 reached a total of 6.66m tonnes in 2007. With the accession of Bulgaria and Romania from January last year, the final total for the EU-27 came to 7.13m tonnes.

Over the longer term the sector in the EU is struggling to move forward. Egg output in the EU-25 was still slightly down on 2005, and nearly 2% below the levels of 2004 and 2002. Only looking over the past 10 years has there been any significant growth.

There was an improvement in prices received by egg businesses all across the EU last year, although as in the UK, this only reflected the situation of producers chasing higher feed costs.

Dutch producers achieved the largest increase in returns of 24%. The egg sectors in France, Spain and Germany saw gains of 17-20%. By contrast, UK producers lagged behind with just an 11% improvement in prices received.

Indications for this year are that another small increase can be expected. Day-old pullet placings during 2007 were up by about 5m across the EU, with this expansion focused on the former EU-15 states, led by The Netherlands, Germany and the UK.

EU poultrymeat

EU-MeatOutput.gif  EU-EggOutput.gif

The EU poultrymeat sector shrugged off the pressures from rising costs last year and lifted overall output by 3% to 10.9m tonnes (EU-25).

The addition of Romania and Bulgaria for the first time added 366,000 and 102,000t to this total respectively, making a figure for the EU-27 of 11.4m tonnes.

Only three member states recorded a significant downturn during 2007, but one of these was the UK. Output also dropped in Belgium and the Czech Republic.

The EU’s largest poultry industry, France, alone produced an extra 73,000t in 2007, a rise of 4%.

Among the other leading industries, Dutch production was up 10%, German and Italian both by 7%. Hungary and Poland posted 5% increases.

As in the egg sector, growers in most member states achieved useful price increases to offset the rise in feed costs.

Dutch producer prices rose by 24%, while Italy and Germany experienced rises of 22% and 18%, respectively.

The French industry lagged behind with price improvements of around 13%, and as 2008 has progressed, the strain on the French sector has begun to show.

In July, France’s (and Europe’s) largest poultry producer, Doux Group, announced a sweeping rationalisation involving three processing plants and the loss of around 650 jobs. The cuts have bitten across the group’s activities and include one broiler plant, one turkey plant and one duck plant.

Doux has traditionally relied on a large export business – only around 40% of turnover is built on the domestic market – exporters all over the EU have struggled against competition from eastern Europe and the phasing out of EU export refunds.

UK eggs

UK-ShellImport.gif  UK-EggConsumption.gif

A tough 12 months for UK egg producers has seen overall egg output drop by 4% and imports gain a greater share of the domestic market.

Feed costs started rising in the early months of 2007 and the price of a basic layers ration had risen from £135 in January last year to a peak of £233 by this April.

The constant battle to get higher returns from the retail trade to offset this rise has met with only partial success, although a slight easing of feed costs in recent months has removed some of the pressure on farm margins.

Taking the UK egg market as a whole, total consumption dropped to its lowest level for four years in 2007, at 10.6bn. Until then, demand had been recovering on the back of the Lion campaign from its low point in the late 1990s to a peak in 2004.

Within these figures, domestic output has slipped faster than the trend in consumption, with imports making up the difference.

Between 2004 and 2007, UK domestic output (for all purposes including processing) has fallen by 8% while imports gained 25%.

A recent Mintel report talks about egg sales recovering in 2007, but this appears to be focused on supermarket sales in particular, with a market volume put at 5bn eggs. However, DEFRA’s figures put sales of home-produced shell eggs at around 6.4bn, even before factoring in the imports sold extensively in the catering sector. Meanwhile the number of UK eggs used for processing has levelled off over the last couple of years after growing strongly since the mid-1990s, reflecting the tighter availability of UK-produced eggs.

Of course there is no single trend within the shell egg market, and cage, free-range and organic all have their own direction.

The cage market is faced with approaching deadline of 2012 free range has been struggling to meet demand and to avoid losing share to imports while organic is being choked by unrealistic feed costs. The biggest question mark is over the long-term future of barn eggs.

According to DEFRA’s breakdown of UK packing station throughput, cage volume dropped by 3.4% from 2006-07, free range was up 2.3%, but barn fell by 24%.

To add to the woes of the organic sector, a slump in demand has led leading packers to cut prices paid to producers this summer. This is likely to be attributed to the impact of the tightening squeeze on household budgets this year.

UK poultrymeat

UK-MeatConsumption.gif  UK-MeatImport.gif

Poultrymeat consumption in the UK slumped by almost 7% last year as consumer enthusiasm for poultrymeat appeared to wane.

Total UK offtake of all kinds of poultry fell to 1.6m tonnes, back to the level of 10 years ago.

It is a disappointing development for the UK industry, which has always promoted poultry as the healthy option for modern lifestyles, with strong growth potential.

The broiler sector can take some small comfort that the brunt of the downturn was borne, again, by the turkey sector, where output fell by 30,000t or 16%.

Production of ducks and geese was down by 7000t and that of old hens by 4000t. Broiler cut-backs accounted for another 17,000t, or 1.4%.

All this adds up to a total fall in domestic output of 57,000 tonnes. The other half of the 117,000t drop in consumption was absorbed by a sharp surge in exports.

Meanwhile, imports showed little change on 2006 volumes. The small gain in market share taken by imports was essentially due to the fall in domestic output.

Day-old chick placings for the first half of this year suggest the decline in broiler output is continuing. The rolling 12-month total of chick placings was down 2.2% up to June this year, with broiler parent placings showing the same fall.

At least turkey numbers appear to have stabilised, with the 12-month total of 16.2m almost identical to a year earlier.