The EU egg industry in transition Prof. Dr. Hans-Wilhelm Windhorst IEC Statistical Analyst Paper presented at the Economics Committee Session IEC Business Conference Monaco, April 4th, 2017

The main goals of this presentation are:   to analyse the dynamics of the laying hen inventories and of egg production between 2010 and 2015 in the EU member countries, to document the spatial shifts in egg production and egg trade between 2010 and 2015, to analyse the impacts of Directive 1999/74/EU on then laying hen inventories, egg production and egg trade in Germany, Spain and Poland, to discuss present challenges for the egg industry in the EU member countries and to present perspectives considering these challenges.

1. Some basic facts

EU member countries and their population (2015)

In 2015: With 507 mill. inhabitants, the EU shared 6.8 % in the global population. With a GNP of 16.5 billion US-$, the EU contributed 21.8 % to the global GNP. EU member countries contributed 10.3 % to global egg production. EU member countries shared 11.7 % in global poultry meat production.

Dynamics in the EU laying hen inventory 2. Dynamics in the EU laying hen inventory

Development of the EU laying hen inventory between 2010 and 2015 Year Laying hens (1,000) Index (2010 = 100) 2010 2011 2012 2013 2014 2015 362,628 n. d. 363,005 380,490 383,768 382,774 100.0 100.1 104.9 105.8 105.6 MEG 2010, 2016

Laying hen inventory in EU member countries (2015)

The ten EU member countries with the highest laying hen inventories in 2010 and 2015; data in 1,000 hens 2010 2015 Country Hens Share (%) Italy 49,575 13.7 48,199 12.6 Spain 46,592 12.8 Germany 47,987 12.5 France 45,531 46,770 12.2 41,729 11.5 Poland 41,916 11.0 U. K. 38,911 10.7 41,266 10.8 Netherlands 33,448 9.2 38,991 10.2 32,781 9.0 32,838 8.6 Belgium 9,264 2.6 8,893 2,3 Sweden 6,519 1.8 Portugal 8,770 2.3 Romania 6,215 1.7 Hungary 8,211 2.1 10 countries 310,565 85.6 323,841 84.6 MEG

The five EU member countries with the highest increase resp. decrease of their laying hen inventories between 2010 and 2015 Increase Decrease Country 1,000 hens % Poland 9,135 27.9 Spain 5,326 11.4 Germany 6,470 15.0 Italy 1,376 2.8 Portugal 2,641 41.0 Slovakia 641 17.4 Hungary 2,571 45.6 Netherlands 610 1.8 Romania 1,618 26.0 Belgium 371 4.0

Change in housing systems Total: 362.6 mill. Total: 382.8 mill.

Housing systems for lying hens in EU member countries (2015)

EU member countries with the highest share in housing systems (2015) Enriched cages Barn system Country % Latvia 99.6 Austria 67.3 Portugal 93.9 Sweden 64.5 Spain 91.7 Netherlands 61.7 Free-range Organic Country % Un. Kingdom 49.9 Denmark 26.3 Ireland 39.0 Sweden 16.1 Austria 20.0 10.7

Dynamics in egg production 4. Dynamics in egg production

Development of EU egg production between 2010 and 2015 Year Production (1,000 t) Index (2010 = 100) 2010 2011 2012 2013 2014 2015 7,189 7,171 7,043 7,371 7,404 7,537 100.0 99.7 98.0 102.5 103.0 104.8 MEG 2010, 2016

Egg production in EU member countries (2015)

The ten EU member countries with the highest egg production in 2010 and 2015; data in 1,000 t 2010 2015 Country Production Share (%) France 954 13.3 991 13.1 Spain 918 12.8 929 12.3 Italy 852 11.9 Germany 870 11.5 U. K. 718 10.0 830 11.0 Netherlands 711 9.9 751 656 9.1 722 9.6 Poland 637 8.9 593 7.9 Romania 310 4.3 350 4.6 Belgium 168 2.3 177 Hungary Czech Rep. 158 2.1 10 countries 6,092 84.7 6,371 84.5 MEG

The five EU member countries with the highest increase resp. decrease of egg production between 2010 and 2015 Increase Decrease Country 1,000 t % Germany 214 32.6 Poland 44 6.9 Romania 40 12.9 Italy 22 2.6 France 37 3.9 Hungary 20 11.9 U. K. 33 4.6 Bulgaria 6 6.0 Czech R. 30 23.4 Croatia 3 7.2

Results: The transformation of the housing systems did not cause a drastic decline in the laying hen inventory and in egg production. The expansion of layer places led to an oversupply with eggs and lasting low egg prices at farm gate. A reduction of placed hatching eggs and pullets was able to stabilise the situation for some time, but it was not before the second quarter of 2016 that prices increased again, partly of growth in exports.

5. Dynamics in egg trade

Development of EU egg exports between 2010 and 2015 Year Exports (t) Index (2010 = 100) 2010 2011 2012 2013 2014 2015 181,719 217,105 185,716 219,683 232,859 283,130 100.0 119.5 102.2 120.3 128.1 155.8 * Includes shell egg equivalents for egg products but not hatching eggs EU Commission

Development of EU egg imports between 2010 and 2015 Year Imports (t) Index (2010 = 100) 2010 2011 2012 2013 2014 2015 34,244 20,806 37,446 20,378 13,626 18,869 100.0 60.8 109.4 59.5 39.8 55.1 * Includes shell egg equivalents for egg products but not hatching eggs EU Commission

The eight leading non-EU countries of destination for EU egg exports in 2010 and 2015; data in t 2010 2015 Country Exports Share (%) Japan 52,923 29.1 73,487 25.9 Switzerland 45,072 24.8 USA 49,451 17.5 Angola 10,414 5.7 41,593 14.7 Taiwan 7,145 3.9 Un. Arab. E. 15,113 5.3 Thailand 6,168 3.4 Israel 11.592 3.1 5,888 3.2 5,147 1.8 Russian Fed. 5,293 2.9 Hong Kong 4,308 1.5 Philippines 3,176 1.7 4,082 1.4 8 countries 136,097 74.9 204,773 72.3 * Includes shell egg equivalents for egg products but not hatching eggs EU Commission

The five leading non-EU countries of origin for EU egg imports in 2010 and 2015; data in t 2010 2015 Country Imports Share (%) USA 14,009 40.9 India 5,743 30.4 Argentina 7,937 23.2 Ukraine 3,665 19.4 3,211 9.4 3,232 17.1 Norway 1,722 5.0 2,745 14.5 Israel 941 2.7 Albania 1,544 8.2 5 countries 27,820 81.2 16,939 89.8 Total 34,244 100.0 18,869 * Includes shell egg equivalents for egg products but not hatching eggs EU Commission

Development of the EU egg trade balance between 2010 and 2015; data in 1,000 t Year Exports Imports Surplus 2010 2011 2012 2013 2014 2015 182 217 186 220 233 283 34 21 37 20 14 19 148 196 149 200 219 264 Change (%) + 55.5 - 44.1 + 78.4

Impacts of the earlier banning of conventional cages in Germany 6. Case study: Impacts of the earlier banning of conventional cages in Germany and its economic impacts on the egg industry in Spain and Poland

Egg farms and laying hen inventory* in Germany(2000 – 2015) *Farms and inventory in farms with > 3,000 places

Self-sufficiency rate and egg imports by Germany (2000 – 2015) *Farms and inventory in farms with >3,000 places

The development of Germany´s egg imports between 2010 and 2015; data in mill. pieces Country of origin 2010 2012 2014 2015 Change (%) Netherlands Poland Belgium France Spain Czech. Rep. Lithuania Other 5,814 679 431 221 463 59 9 595 4,528 1,005 371 35 101 26 4 249 4,637 772 301 153 49 7 165 4,614 1,161 319 98 51 48 41 449 - 20.6 + 71.0 - 26.0 - 55.7 - 89.0 - 19.6 + 35.6 - 24.5 Total 8,271 6,319 6,459 6,781 - 18.0 MEG 2016

Development of Germany´s egg imports from Spain between 2010 and 2015; data in mill. pieces Year Imports Index (2010 = 100) 2010 2011 2012 2013 2014 2015 462.9 182.8 101.6 153.5 160.6 51,1 100.0 39.5 21.9 33.2 34.7 11.0 MAPA 2016

Development of Germany´s egg imports from Poland between 2010 and 2015; data in mill. pieces Year Imports Index (2010 = 100) 2010 2011 2012 2013 2014 2015 679 892 1,005 766 1,034 1,161 100.0 131.4 148.0 112.8 152.3 171.0 MEG 2016

7. New challenges

Challenges: Banning of beak treatment Banning of killing male one-day old chicks Cage-free trends in retail and fast-food restaurants Reduction resp. banning of the use of antibiotics Increase of the share of vegetarians resp. vegans Negative image of the poultry industry – risk of loosing the license to produce

I want to thank my Colleague, Dr. Aline Veauthier, for designing the maps and graphs of this presentation and in the Special Report

Thank you for your attention !