The main talking points were the high cost of feed and welfare concerns. It was noted that production costs were at an all-time high as a result of high feed prices, new housing systems (enriched cages have increased costs by 7%) and an increasing cost associated with the regulatory burden – animal welfare, environment and foodstuffs. The USA and Canadian delegates, in particular, were interested in the latest welfare developments in Western Europe on the basis that what is happening in Europe will almost inevitably make its way across to North America. From our point of view we can take some comfort that we are at the forefront of animal welfare. That said arguably Germany, although part of the EU, is taking the lead. They are currently looking at male chicks and a more ‘acceptable to the consumer’ use for this ‘by-product’. In addition they are putting pressure on their largest supplier – the Netherlands – to bring forward their beak trimming ban from 2018 to 2016. The Netherlands are 307% self-sufficient in eggs and approximately one third is exported to Germany (one third exported to other countries and one third consumed at home) and so this is a sensitive commercial issue for them. Speaking to Dutch producers they are concerned about the ban and are unsure about how they will adapt.
In Canada the pressure from Animal Welfare lobbyists is being ‘managed’ by a voluntary agreement that all new sheds currently being erected are based on the EU’s enriched cage system. It is anticipated that in 20 years all birds will be housed in enriched cages and this voluntary approach will keep welfare lobbyists at ‘arm’s length’. The position in the USA is very unclear and confused. Firstly the State of California has banned eggs produced in conventional cages with effect from 01/01/15. The problem that this presents is that approximately 70% of eggs consumed in California are ‘imported’ from other USA states and consequently the USA could find itself in a position where a State is banning imports from its own country leading a thorny constitutional issue. This has been challenged and the outcome is, as yet, unclear. Secondly, in another development the United Egg Producers (the equivalent to the BEIC) have engaged with the Human Society (HSUS) in an attempt to get consensus on enriched cages (116 square inches in USA terms = 750cm2) culminating in an Egg Bill. They believed they had reached agreement on a timescale only for the beef and pork sectors to reject it on the basis that it would set a precedent – engaging with HSUS – that they may be pressured into following. This leaves the voluntary agreement back on the drawing board amidst bitter recriminations between the two groups.
In South Africa there is no pressure. Australia have similar concerns to the EU regarding beak trimming and are looking at their model codes of production. It was interesting to hear from the Columbian delegate that they too are engaging with the welfare lobbyists with regard to some common ground.
Regarding Avian Influenza it was reported that the Mexicans have lost over 4.2 million birds this year and imported 200 million eggs from the USA to maintain supply. In addition the Chinese outbreak is estimated to have cost that country over $6.4 billion with consumption halving overnight as a reaction to adverse media attention. The outbreak closer to home in Italy has been widely publicised and the loss of approximately 1.2 million birds. It was also reported that up to 1 million birds have been delayed being placed on farm until the outbreak was contained all of which impacts on their production.
Delegates were given a presentation on consumer research that had been carried out in the UK, France, Germany, Italy and two USA states involving 1,000 consumers in each country/state. One of the startling results was that when asked why the shopper had left the store without purchasing eggs 21% of respondent’s commented that the store had sold out! A further 22% commented that the store did not stock the type of egg that they were looking for and 18% commented that they were put off buying eggs due to damaged packaging. The results from all respondents had been pooled in the presentation and so we are asking for a breakdown for the UK in isolation so that the information is more relevant. We hope to share this information in due course.
A further survey of European countries concluded that the main concerns amongst producers were: 83% rising feed prices (83%), animal health issues/concerns (70%), animal welfare (65%) environmental challenges (46%) and trade barriers (36%).
The latest production statistics made interesting reading with 37.2% of global egg production by volume now coming from China. The next largest being the USA with 8.3%. The UK currently lies just outside the top 15 producers with 1.0% of world egg production. There is no surprise that egg production has shifted in the last forty years from Europe (42% in 1971 down to 16% in 2011) to Asia (24% in 1971 to 59% in 2011). Fundamentally this is why resources, particularly in the field of research and breeding, is focussing on Asia as an increasingly growing market.
Andrew Joret presented a very interesting and informative paper on colony cages in which he commented that the introduction of enriched cages has actually increased the numbers of birds on farms (a form of intensification) which was contrary to one of the outcomes of the animal welfare lobbyists. The problem caused by the single effective date (01/01/12) of the EU Welfare of Laying Hens Directive has caused significant market disruption which is still being experienced now – it would have been better to have had some phased in period. The problem being that there was no incentive for early conversion largely due to the animal welfare groups blocking any market differentiation. Andrew noted that as at 01/01/12, 23 % of hens were housed in illegal systems and that by the end of 2012 there were 20 million hens kept in illegal systems in five non-compliant member states. It was noted that Italy and Greece were still non-compliant. Andrew predicted a challenging 18 months ahead for the cage sector on the basis of oversupply and the fact that producers would be unlikely to stand empty sheds in which new equipment had recently been fitted.
The experience of enriched cages to date was one of good production (330 eggs to 72 weeks), low levels of mortality (typically 2% at 72 weeks) and better feathering at the end of lay. The latter being a welfare outcome measure. The downside to date was a slightly higher FCR (but overall similar FCR due to increased output) and higher seconds (typically 5-6%) with belt shuffle or continuous collection having helped in this regard. The current 3rd generation colony cage with the entire feed trough in the middle of the colony, LED strip lighting nearer the scratch area, lower light levels by the nest box and the nest box nearer the edge of the colony alongside the collection belt are currently undergoing evaluation. Birds appear to like the new cage and there is the potential to increase bird numbers. Voluntary upgrading to the 3rd generation may be a feature in the future.
A presentation from Rabobank International concluded that the poultry industry is in a good position going forward based on being a source of affordable protein and a flexible production system. Global demand has increased in the period 2007-11 by +2.4% for eggs and +3.6% for poultry meat whilst beef has declined by - 1.1% and pork +1.8% over the same period.
The Conference concluded with a rousing speech by former South African President F W De Klerk in which he outlined his country’s path to peace. De Klerk majored on the importance of good leadership whether it is at the head of a multinational company or employing a handful of staff. Leaders who surround themselves by strong advisers who are prepared to differ and argue and throw argument against argument is the leader that will survive. The good leader shapes his/her final decision and is influenced by other arguments and arrives at a better decision. Inclusivity for good leaders is a fundamental. The message to leaders is that you must lead with integrity and without self-interest and aspiration. The essential ingredients to be a successful leader being integrity, honesty, ability to face the facts and analysing before making the final decision.