Science and Information Centre for Sustainable Poultry Production – WING vechta.de 1 Prof. Dr. Hans-Wilhelm Windhorst -Scientific Director- (WING,

Science and Information Centre for Sustainable Poultry Production – WING www.wing-vechta.de 1

Prof. Dr. Hans-Wilhelm Windhorst-Scientific Director-

(WING, University of Vechta, Germany)

Patterns and Dynamics of Global andEuropean Egg Production and Trade

Paper presented at theTurkish Egg Summit

in AntalyaNovember 1st, 2013


AGENDA

1. The globalization of egg production an egg trade

2. The banning of conventional cages in the EU (27) and impacts on egg production and egg trade

4. Challenges for the global and European egg industry

5. Results and perspectives


1.

The dynamics of global egg production

and egg trade

Prof. Dr. H.-W. Windhorst Science and Information Centre for Sustainable Poultry Production – WING www.wing-vechta.de

What is globalisation?


Globalisation understood as the global organisation of production and trade describes:

• an ongoing process, • the growing interdependence and linkage of countries,• the increasing mobility of goods, services and capital,• the reduction of transaction costs,• the standardisation of products,• the dissemination of technologies,• and the growing importance of new communication technologies.


The globalisation of egg production


The development of global egg production between 1970 and 2010

FAO


Development of global egg production between 1990 and 2010

WING


Continent 1970 1990 2011 Increase (%)

AfricaAsiaEuropeN America*CS AmericaOceania

5924,6308,2904,7311,055242

1,54413,65011,6635,3622,631244

2,64938,22910,6398,3164,892278

347.5725.328.375.8

363.714.9

World 19,541 35,094 65,003 232.6

The development of global egg production between 1970 and 2011 by continents

FAO


FAO

The changing contribution of the continents to global egg production between 1970 and 2011


Continent 1970 1990 2011 Change (%)


4.117.136.933.37.61.0

5.224.328.728.312.31.3

4.158.816.412.87.50.4

+/- 0+ 41.7- 20.5- 20.5- 0.1- 0.6

World 100.0 100.0 100.0 -

The changing contribution of the continents to globalegg production between 1970 and 2011

FAO

1970 2011

Country Production(1,000 t)

Share(%)

Country Production(1,000 t)

Share(%)

USAUSSRJapanChinaGermanyUn. Kingd.FranceItalySpainPoland

4,0532,2481,7661,5331,162892658606464389

20.711.59.07.85.94.63.43.12.42.0

ChinaUSAIndiaJapanMexicoRussiaBrazilIndonesiaUkraineFrance

24,1495,4193,4902,4832,4592,2842,0371,1661,064840

37.28.35.43.83.83.53.11.81.61.3

10 countries 13,771 70.5 10 countries

45,391 69.8

World 19,541 100.0 World 65,003 100.0

FAO

The ten leading countries in global egg productionin 1970 and 2011

Turkey: 810 = 1,2 %

The ten leading EU (27) member countries in egg Production in 2000 and 2012; data in 1,000 t

2000 2012

Country Production Share (%) Country Production Share (%)

France 1.038 15,7 Spain 862 12.3

Germany 901 13,6 France 856 12.2

Italy 686 10,4 Germany 824 11.7

Netherlands 668 10,1 Un. Kingd. 699 9.9

Spain 658 9,9 Netherlands 698 9.9

Un. Kingd. 569 8,6 Austria 691 9.8

6 countries 4.521 68,3 6 countries 4,630 65.8

EU (27) 6.616 100,0 EU (27) 7,033 100.0

FAO, MEG 2013


Country Absolute increase(1,000 t)

Share (%) ofglobal increase

Country Relative Increase(%)

ChinaIndiaUSAMexicoIndonesiaBrazilIran TurkeyPakistanNigeriaColombiaSouth AfricaEgyptMalaysiaMyanmar

17,2662,2171,3781,372753718446355337286274260257248245

60.27.74.84.82.62.51.61.21.21.01.00.90.90.90.9

ParaguayLaoChinaGhanaYemenGuatemalaViet NamTurkmenistanBangladeshIndonesiaGuineaIndiaPeruKuwaitEgypt

280.0274.6263.2255.1250.9237.0232.1212.5207.1206.8194.3191.0189.2187.5181.5

15 countries 26,412 92.1 15 countries -

World 28,688 100.0 World 81.7

Countries with the highest increase in egg production between 1990 and 2010


Countries with the highest decrease in egg production between 1990 and 2010

Country Absolute decrease(1,000 t)

Country Relative decrease(%)

GermanyRussia*HungaryRomaniaIraqBulgariaBelgiumCzech Rep.**GreeceEstonia*CubaFinlandAustraliaKyrgistan*Slovakia**

323124108874646363323171615141210

EstoniaIraqHungaryKyrgistan**BulgariaGermanyRomaniaCzech Rep.FinlandBelgiumGreeceCubaSlovakia**AustraliaDenmark

59.856.141.636.834.032.822.721.219.518.918.512.912.07.47.3

15 countries 910 15 countries -

World 951 World -

* 1992 ** 1993 FAO


Results:

• Global egg production increased by 44.2 mill. t between 1970 and 2011 and reached a production volume of 65.0 mill. t.

• Asia was the big winner whereas Europe and North America lost considerable shares in the analysed time period. In 2011, Asian countries contributed 58.8 % to the global production volume. • European countries lost their leading position in 1988 to Asian countries.

• Despite a considerable increase in their production volume, North American countries could not maintain their share of 1970.

• The contribution of Africa and Central and South America to global egg production remained fairly stable between 1990 and 2010.


The globalisation of egg trade


Development of global egg exports between 1970 and 2010

FAO


Development of global egg imports between 1970 and 2010

FAO


Exports

Continent 1970 1990 2010 Change (%)


1.014.179.73.70.70.7

0.211.283.04.61.00.0

0.526.567.04.61.10.2

- 0.5+ 12.4- 12.7+ 0.9+ 0.4- 0.5

World **100.0 100.0 **100.0 -

Imports


0.821.271.54.81.80.3

1.520.972.83.21.50.1

3.229.363.32.21.80.2

+ 2.4+ 8.1- 8.2- 2.6+/- 0- 0.1

World **100.0 100.0 100.0 -

The changing contribution of the continents to global egg trade

FAO, own calculations


Development of egg exports between 1990 and 2010 and exports by countries (2010)

FAO


1970 2010

Country 1,000 t Share (%) Country 1,000 t Share (%)

BelgiumNetherlandsChinaBulgariaHungaryPolandDenmarkRomaniaFinlandLebanon

88803428232219171715

21.819.88.46.95.75.44.74.24.23.7

NetherlandsPolandTurkeySpainGermanyChinaMalaysiaUSABelgiumSyria

60315313212311510189867876

29.87.66.56.15.75.04.44.33.93.8

10 countries 343 *84.9 10 countries 1,556 77.0

World 404 100.0 World 2,021 100.0

The ten leading egg exporting countries in 1970 and 2010

FAO


Development of egg imports between 1990 and 2010 and imports by countries (2010)

FAO


The ten leading egg importing countries in 1970 and 2010

FAO

1970 2010

Country 1,000 t Share (%) Country 1,000 t Share (%)

GermanyHong KongUSSRFranceSwitzerlandAustriaUSANetherlandsUn.Kingd.Italy

127453325241914131110

32.011.38.36.36.04.83.53.32.82.5

GermanyIraqNetherlandsHong KongSingaporeBelgiumFranceItalyUn. Kingd.Switzerland

48219916995766154403634

28.811.910.15.74.53.63.22.42.22.0

10 countries 321 *80.9 10 countries 1,246 74.4

World 397 100.0 World 1,674 100.0


Balance of trade with shell eggs by countries (2010)

FAO, own calculations


The fifteen countries with the highest positive and negative balance of trade with shell eggs in 2010

Country Surplus (t) Country Deficit (t)

NetherlandsPolandTurkeySpainChinaMalaysiaUSASyriaSaudi ArabiaIndiaBelarusIranBelgiumUkraineBrazil

434,580133,606130,762117,748100,81289,11182,66276,21839,25034,71732,39920,24417,42314,67113,808

GermanyIraqHong KongSingaporeSwitzerlandUn. KingdomCanadaAngolaQatarAustriaCzech Rep.Un. Arab Em.ItalyAfghanistanLibya

366,434199,48294,63175,76634,32429,31622,33819,04617,59116,31915,50614,34012,2129,3619,084

Own Calculations


2.

The banning of conventional cages

for laying hens in the EU (27)

and impacts on egg production and egg trade


On July 19th, 1999 the EU Commission passed:COUNCIL DIRECTIVE 1999/74/EClaying down minimum standards for the protection of laying hens.

•The directive decided that:

- From January 1st, 2012 on all cages will be prohibited.

- From January 1st, 2003 on no such cages must be installed in EU member countries.

- Member countries may decide to ban cages earlier and to tighten regulations of the directive.

BACKGROUND


Directive 1999/74/EC distinguishes between:

a) Alternative Systems

b) Unenriched cage systems

c) Enriched cages

The Commission also decided that before the final imple-mentation of the directive, additional scientific studiesshould be undertaken to analyze the impacts on the welfareof laying hens and the economy of production.

BACKGROUND


EU:

• Conventional cages banned from January 1st, 2012 on.

• Not all member countries met the deadline.

• Estimated cost: about 1.2 billion €.

• In January 2013, about 30 mill. of the 350 mill. layers were still kept in conventional cages, 17 mill. in Italy alone.

• Problems: trade of eggs that are produced in old cages. Rest of Europe:

• No cages in Norway and Switzerland; conventional cages still used in Belarus, Ukraine and Russia; animal welfare discussion not yet important in the latter countries.

BACKGROUND

Laying hens in conventional cages (in June 2012, Mio. animals)

France: 1.5

Spain: 12.7

Greece: 1.8

Belgium: 3.5Portugal: 2.7Poland: 2.3

Netherlands: 1.6

Cyprus: 0.1

Italy: 17.3

EU: 43.4 Mio. hens


BACKGROUND

The six leading EU (27) member countries in egg production in 2000 and 2012; data in 1,000 t

2000 2012

Country Production Share (%) Country Production Share (%)

France 1,038 15.7 Spain 862 12.3

Germany 901 13.6 France 856 12.2

Italy 686 10.4 Germany 824 11.7

Netherlands 668 10.1 Un. Kingd. 699 9.9

Spain 658 9.9 Netherlands 698 9.9

Un. Kingd. 569 8.6 Austria 691 9.8

6 countries 4,521 68.3 6 countries 4,630 65.8

EU (27) 6,616 100.0 EU (27) 7,033 100.0

FAO, MEG 2013


Impacts on egg supplyand egg prices

- Germany - - EU - 27


Germany

• In Germany, conventional cages were already banned from January 1st 2010 on, two years earlier than in the rest of the EU.

• The development of egg production in this country can demonstrate possible impacts of such a decision.

EGG SUPPLY

Decrease 10,8 %

Decrease 14,6 %

Development of layer farms and the number of laying hens in Germany between 2000 and 2012(Source: DESTATIS 2013)

Development of the German self-sufficiency rate for shell eggs and of egg imports between 2000 and 2013

Impacts of Animal Welfare regulations in Europe

Science and Information Centre for Sustainable Poultry Production – WING www.wing-vechta.de

EGG SUPPLY

Potential number of laying hens in Germany


Development of the number of laying hens inGermany between January 2011 and December 2013

Date Number of layers (1,000) Index (1/11 = 100)

1/11

7/11

12/11

1/12

7/12

12/12

1/13

7/13

12/13

37,372

37,774

37,721

38,818

38,873

39,457

39,774

40,019

37,989

100

101

101

104

104

106

106

107

102

EMA 9/2913


EGG SUPPLY

Price development for shell eggs in Germany(wholesale price); data in €/100 eggs

Date Size class M

(enriched cages)

Index (Jan./2011 = 100)

January 2011

July 2011

December 2011

March 2012

July 2012

December 2012

March 2013

July 2013

4.17

5.18

7.65

12.80

8.35

9.04

6.17

4.81

100

124

183

307

200

218

148

115

EMA 8/2013


Impacts on egg supplyand egg prices - Germany - EU - 27


Potential number of laying hens in EU-27

EGG SUPPLY


Development of the number of laying hens in theEU between January 2011 and December 2013

3 Number of layers (in mill.) Index (1/11 = 100)

1/11

7/11

12/11

1/12

7/12

12/12

1/13

7/13

12/13

364.1

352.9

334.1

331.4

337.0

350.2

353.3

360.3

350.6

100

97

92

91

93

96

97

99

96

EMA 9/2913


EGG SUPPLY


EGG SUPPLY

Price development for shell eggs in the Netherlands(producer price); data in €/100 eggs

Date Size class M

(barn system)

Index (Jan./2011 = 100)

January 2011

July 2011

December 2011

March 2012

July 2012

December 2012

March 2013

June 2013

3.38

4.14

6.16

9.98

6.39

7.68

5.62

4.03

100

122

182

295

189

227

166

119

EMA 8/2013


EGG SUPPLY

Price development for shell eggs in Spain (Bellpuig); data in €/100 eggs

Date Size class M

(average)

Index (Jan./2011 = 100)

January 2011

July 2011

December 2011

March 2012

July 2012

December 2012

March 2013

July 2013

3.79

5.08

6.86

11.33

8.50

8.36

7.08

5.42

100

134

181

299

224

221

187

143

EMA 8/2013


EGG SUPPLY

Price development for shell eggs in Italy (Milano); data in €/100 eggs

Date Size class M

(average)

Index (Jan./2011 = 100)

January 2011

July 2011

December 2011

March 2012

July 2012

December 2012

March 2013

July 2013

9.92

10.41

11.45

13.18

12.65

14.30

13.95

12.74

100

105

115

132

127

144

140

128

EMA 8/2013


Impacts on egg trade


EU (27) member countries with the highest per capitaconsumption and self sufficiency rate for shell eggs (2012)

Per capita consumption (kg/person/year)

Self sufficiency rate (%)

Spain 18.0 Netherlands 307

Czech Rep. 15.6 Belgium 115

Denmark 15.3 Poland 120

France 14.9 Finland 110

Latvia 14.5 Latvia 110

Austria 14.1 Portugal 106

Hungary 14.0 Spain 105

MEG 2013


EU (27) member countries with the lowest per capitaonsumption and self sufficiency rate for shell eggs (2012)

Per capita consumption(kg/person/year)

Self sufficiency rate (%)

Greece 8.6 Germany 68

Portugal 9.0 Un. Kingd. 82

Finland 10.3 Ireland 83

Belgium 10.6 Austria 84

Ireland 10.7 Czech Republ. 85

Sweden 11.0 France* 87

Poland 11.3 Denmark 92

MEG 2013 * 2011


TRADE


EU Egg ImportsTRADE


Exports of Eggs by EU-27

TRADE


Imports of Eggs into EU-27

TRADE


Egg Surplus and Deficit in Europe

SECURITY


Results : The German case

• Layer flocks in Germany decreased by over 15.6 % between 2005 and 2010.

• Egg production decreased by over 800 mill. pieces between June 2009 and June 2010.

• The self sufficiency rate fell from 74 % to only 59 %.

• Shell egg imports increased from 5.6 billion eggs in 2008 to over 7 billion eggs in 2009. In 2010, the import volume reached 8 billion.

• About 200 mill. € were invested by the industry to meet the German legal regulations.

• Germany will remain the leading egg importing country also in future. Main suppliers will be the Netherlands, Spain and Poland.


Results of the transformation process in the EU :

• According to the EU commission, the transformation process was completed in all EU member countries in 2012.

• Layer flocks in EU-27 decreased as a result of the cage ban.

• Imports into the EU-27 increased temporarily because of the cage ban, exports decreased.

• Egg prices increased temporarily because of the egg shortage due to the transformation process.

• In 2013, egg prices decreased considerably because of a high oversupply. This will result in a sharp decrease of the number of laying hens in the fourth quarter of 2013.


3.

Challenges for the global

and European egg industry


Challenges:

• Climate change.

• Less cultivated land and water resources.

• Declining phosphate resources.

• Growing rejection of intensive animal husbandry in developed countries.

• Animal welfare aspects.

FUTURE


Main arguments against a modern, market-orientedegg industry:

• number of birds per flock is too large,

• bird density per m2 is too high,

• use of antibiotics is too high and dangerous,

• regional concentration of large poultry flocks cause environmental problems (air, soil, groundwater),

• vertical integration is threatening the future of poultry farms,

• animal welfare (de-beaking of small chicks, selection of male chicks in egg production).

FUTURE


USA:• conventional cages will be banned from 2030 on (in California from 2015), if the “Egg Bill” is passed,

• the transformation will cost about 4 billion US-$,

• after 2030 the dominating housing system will be colony nests/enriched cages (95 %),

New Zealand:

• Conventional cages will by prohibited from 2022 on, enriched cages will be permitted.

BACKGROUND


Other countries:

• In Canada, conventional cages must not be installed from 2014 on.

• The discussion to ban cages is under way in Australia, Taiwan, South Korea and just beginning in Japan, India and Costa Rica.

• In China, Malaysia, Mexico, Argentina, Brazil, Uruguay, all African countries as well as in non-EU countries in Europe conventional cages are still being used and a banning is not yet being discussed.

BACKGROUND


Further Problems:

• the failure of the poultry industry to explain to the public why certain forms of housing systems developed, why large herd sizes are necessary and when and why antibiotics have to be used,

• the failure of the poultry industry to switch from reaction to pro-active action in time.

FUTURE


The challenge:

• to inform the public about the modern systems of egg and poultry meat production,

• to open the poultry houses to the public and to inform them about housing systems, herd sizes, the cost and profit situation, diseases and their cure, vaccination schemes, animal welfare and environmental problems and steps undertaken to reduce them,

• to continuously inform media, NGOs and animal welfare organisations about innovations in poultry production which help to reduce animal welfare and environmental problems,

• to inform the public about the safety and quality of affordable poultry products.

FUTURE


4.

Results and Perspectives


What did we learn in the EU?

1. We learned that very often a challenge is a chance and that serious problems lead to innovations.

2. We learned that animal welfare will be an ongoing challenge.

3. We learned that the improvement of housing systems will be an ongoing task.

RESULTS


• In less developed and threshold countries, the supply of a growing population with animal proteins is the most important goal for the future.

• In developed countries topics like animal welfare, environmental protection and climate protection are becoming more and more important.

• In developed countries the social acceptance of large farms is decreasing constantly.

RESULTS

Further Results:


Trends

•In 2050 9 bill. people will live on earth, 86 % in threshold and less developed countries.

• Until 2050 food production has to decrease by 50 % but in 2050 there will be less cultivated land and water supply will be unsure.

• In treshold and less developed countries meat consumption will increase fast because of an increasing purchase power.

• Poultry meat and eggs will be the most important protein sources.

FUTURE


Egg Production in 2015 (in 1.000 t)

Continent Production Share (%)

Africa 3,683 5.2

Asia 42,354 60.0

N America* 9,077 12.9

SC America 5,124 7.2

Europe 10,135 14.3

Oceania 256 0.4

World 70.629 100.0* Canada, Mexico, USA

FUTURE


Projection of Egg Production and Consumption in the EU until 2014; data in 1,000 t(Source: EU Commision 10/2013)

2011 2012 2013 2014

Produc-tion

7,303 7,271 7,234 7251

Consump-tion

7,105 7,127 7,057 7,061

Kg/head/year

12.5 12.1 12.2 12.2

Self-suffi-ciency (%)

103 102 103 103


Thank you very much for your attention!

Prof. Dr. Hans-Wilhelm Windhorst

Science and Information Centrefor Sustainable Poultry Production (WING),

University of Vechta

www.wing-vechta.de


Questions

Documents

Science and Information Centre for Sustainable Poultry Production – WING vechta.de 1 Prof. Dr. Hans-Wilhelm Windhorst -Scientific Director- (WING,