Cage ban in Europe – impacts on trade, egg supply and food security Dr. Aline Veauthier (WING, University of Vechta) Science and Information Centre for Sustainable Poultry Production

AGENDA Background – Directive 1999/74EC Impacts on egg supply Impacts on trade Impacts on food security Future developement Results

BACKGROUND

BACKGROUND On July 19th, 1999 the EU Commission passed: COUNCIL DIRECTIVE 1999/74/EC laying 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: Alternative Systems Unenriched cage systems Enriched cages The Commission also decided that before the final imple- mentation of the directive, additional scientific studies should be undertaken to analyze the impacts on the welfare of laying hens and the economy of production.

BACKGROUND In 2007 the results of the scientific studies were available (www.laywel.eu). Based on these results, the Commission decided in 2008: no alteration of the original regulations of the directive, no alterations in the date of implementation. Problem: It took nine years, before the final decision was passed. In this time period, almost no investments were made because nobody was sure about the final regulations of the directive.

BACKGROUND Regulations for enriched cages: Laying hens must have: At least 116 inches2 (750 cm2) of cage area per hen, of which 93 inches2 (600 cm2) shall be usable. The height of the cage has to be at least 7.9 inches (20 cm) at every point, including the perch area. No cage shall have a total area that is less than 310 inches2 (2,000 cm2). A nest. Litter, such that pecking and scratching are possible. Appropriate perches: at least 5.9 inches (15 cm) per hen.

BACKGROUND Regulations for enriched cages: Laying hens must have: A feed trough which may be used without restriction (length: 4.7 inches (12 cm) x number of hens in cage). A drinking system appropriate to the size of the group (at least two nipple drinkers in reach of each hen). To allow inspection, the aisle has to have a minimum width of 35.4 inches (90 cm). A space of at least 13.8 inches (35 cm) must be allowed between the bottom of the first tier and the floor. Cages must be fitted with suitable claw-shortening devices.

BACKGROUND Results: The opposition against cage systems began parallel to the implementation of such systems. A major role in organizing the opposition played German NGOs and the Green Party. After years of discussion, the EU passed Directive 1999/74/EC in 1999. With the exception of Austria and the UK all member countries voted for it. It took eight years before the final regulatory statutes were passed in 2007. This long time span kept companies from investing in new housing systems.

Laying hens in conventional cages 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. Laying hens in conventional cages (in June 2012, Mio. animals) France: 1.5 Spain: 12.7 Greece: 1.8 Belgium: 3.5 Portugal: 2.7 Poland: 2.3 Netherlands: 1.6 Cyprus: 0.1 Italy: 17.3 EU: 43.4 Mio. hens

BACKGROUND

BACKGROUND 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 %), there is a strong opposition against the passing of the “Egg Bill” from cattle ranchers, pork producers and the Farm Bureau. on June 19th 2012, the Senate did not vote on the “Egg Bill”.

BACKGROUND Other countries: In New Zealand, conventional cages will be banned from 2022 on. In Canada, banning is not being discussed, a trans- formation to other housing systems will be a long process organized by all stakeholders of the industry. The discussion to ban cages is under way in Australia, Taiwan, South Korea and just beginning in Japan. In China, India, 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 being discussed.

BACKGROUND Other countries: In Morocco, Tunisia and Algeria the transformation of some flocks to enriched cages is considered because of the high egg prices in the EU and the chance to export eggs.

IMPACTS ON EGG SUPPLY - Germany - EU - 27

IMPACTS ON EGG SUPPLY - Germany - EU - 27

EGG SUPPLY Germany In Germany, conventional cages were 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.

Development of German egg production (in 1,000 t) EGG SUPPLY Development of German egg production (in 1,000 t) - 23.5 % Decrease by 23.5 %

EGG SUPPLY Development of the number of layers and farms in Germany between 2000 and 2012; data in 1,000 birds Cage ban

Number of laying hens in Germany EGG SUPPLY Number of laying hens in Germany birds

EGG SUPPLY Degree of capacity utilization in farms with more than 3,000 hen places in Germany

Laying hens by housing systems in Germany EGG SUPPLY Laying hens by housing systems in Germany (% share of layer farms with 3,000 and more places) Destatis

IMPACTS ON EGG SUPPLY - Germany - EU - 27

Number of laying hens in EU-27 EGG SUPPLY Number of laying hens in EU-27 birds 2011 2012 2012

Number of laying hens in the Netherlands EGG SUPPLY Number of laying hens in the Netherlands birds 2011 2012 2012

EGG SUPPLY Housing systems in egg production in EU member countries (2010)

EGG SUPPLY Prices Production EU market situation for Eggs and Poultry Man Com 21 March 2013

EGG SUPPLY EU market situation for Eggs and Poultry Man Com 21 March 2013

IMPACTS ON TRADE

Imports of shell eggs into Germany TRADE Imports of shell eggs into Germany + 37 %

TRADE Egg imports into selected countries

TRADE EU Egg Imports EU market situation for Eggs and Poultry Man Com 21 March 2013

TRADE EU Egg Exports EU market situation for Eggs and Poultry Man Com 21 March 2013

TRADE Exports of Eggs by EU-27

TRADE Imports of Eggs into EU-27

IMPACTS ON FOOD SECURITY

SECURITY Egg Surplus and Deficit in Europe

SECURITY Prices/100 barn eggs (Size L, bulk) from egg packing station in Germany end of 2009: egg shortage due to transformation period €/100 eggs 2010: egg shortage due to transformation period + high demand (Easter)  highest price 14.5 € (~ 20.6 $)! Easter 2010: Egg oversupply: transformation finalised + Dutch egg imports, summer period  dramatic price decrease to 6 € (~8.5 $) 2009 Easter 09 2008: high feed prices 2008 2008: moderate Easter price: 8.7 € (~12.4 $) 2010

EU Egg Prices/100 eggs (Size M, bulk) SECURITY EU Egg Prices/100 eggs (Size M, bulk) Germany

SECURITY EU market situation for Eggs and Poultry Man Com 21 March 2013

EU Egg Prices/100 eggs (Size M, bulk) SECURITY EU Egg Prices/100 eggs (Size M, bulk) Netherlands

EU Egg Prices/100 eggs (Size M, bulk) SECURITY EU Egg Prices/100 eggs (Size M, bulk) France

EU Egg Prices/100 eggs (Size M, bulk) SECURITY EU Egg Prices/100 eggs (Size M, bulk) Italy

EU Egg Prices/100 eggs (Size M, bulk) SECURITY EU Egg Prices/100 eggs (Size M, bulk) UK

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 55 %. Shell egg imports increased from 5.6 billion eggs in 2008 to over 7 billion eggs in 2009. In 2010, the import volume has 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 : The transformation process is still not completed in all EU-27 countries. Layer flocks in EU-27 decreased as a result of the cage ban. Imports in EU-27 increased because of the cage ban. Egg prices increased because of the egg shortage due to the transformation process. The transformation process has to be completed in all countries to analyse further impacts.

FUTURE DEVELOPMENT

FUTURE 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 Future Challenges Climate change. Less cultivated land and water resources. Declining stocks of phosphate. Growing rejection of intensive animal husbandry in developed countries. Consumer types: less meat, no meat, no animal products. Animal welfare aspects.

Egg Production in 2015 (in 1.000 t) 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 Windhorst 2011

FUTURE ILLEGAL KILLINGS ON TURKEY FARM

FUTURE Main arguments against a modern, market-oriented poultry industry: number of birds per flock is too large, bird density per m2 in broiler and turkey production 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 (debeaking of small chicks, selection of male chicks in egg production).

FUTURE The problems: the gap between advertising and the reality on farms,

the widening gap between the perception of the FUTURE http://www.fingermuehl.de http://www.roterhahn.it http://www.zingerlehof.com the widening gap between the perception of the consumers and the necessities of the poultry producers

FUTURE 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 Project „Transparency in the Poultry Industry“ Lower Saxony Poultry Association (NGW) Science and Information Centre for Sustainable Poultry Production (WING), University of Vechta

RESULTS

RESULTS What did we learn in Europe? 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.

Lessons to be learned from the German experience: Lacking foresight of and politically (election) motivated decisions to ban cages earlier than in the rest of the EU caused severe economic problems for the egg industry and resulted in high financial losses. The time span between the passing of the law and the regulatory statutes has to be short. Otherwise, the transformation process does not begin and at the end does not leave sufficient time for the egg companies to install the new housing systems. Empty and unused facilities were the result in Germany. The decision in the USA to have “one” law for all states and to set fixed percentages that have to be reached in the transformation process are the right way.

RESULTS Problems that still have to be solved in the USA after the agreement between UEP and the HSUS in June 2011: What is going to happen in California? The egg industry will suffer in the same way as Germany. But for a much longer time: 14 years! As production costs in colony nests and alternative housing systems are higher than in conventional cages, producers which still use conventional cages will have an advantage compared to producers which have already switched to colony nests. What impacts will this have on the transformation process and on the egg market? What will be the reaction of other NGO´s than the HSUS regarding the agreement? How will food retailers and major egg users react?

of a growing population with animal proteins is the RESULTS Further 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 poultry production in large farms is more and more criticized.

Thank you very much for your attention! Dr. Aline Veauthier Science and Information Centre for Sustainable Poultry Production (WING), University of Vechta www.wing-vechta.de

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