75% of EU egg production is concentrated in 7 countries

15-09-2017 | | |
75% of EU egg production is concentrated in 7 countries. Photo: Willem Schouten
75% of EU egg production is concentrated in 7 countries. Photo: Willem Schouten

France, Italy, Germany, Spain, the Netherlands, Poland and the UK make up 75% of egg production, and while the number of laying hens in Europe is still lower than the Ukraine or the US, the EU has a self-sufficiency rate of between 102-104% in recent years.

Laurence Bonafos, European Commission poultry economist, said production had grown by 1.2% in 2015/6 and 0.6% in 2016/7 but questioned whether there would be a rise this year because of the Fipronil scandal.

Enriched cages 55.9% of market

While alternative farming methods were increasing, figures for 2016 showed that enriched cages still made up 55.9% of the market. This was followed by barn production, which accounted for 25.6% and free-range (13.9%). The organic sector took a 4.5% market share.

“The alternative systems are increasing year on year due to consumer trends,” she added.

Price varies among member states

Prices continued to be influenced by supply and demand, although there was substantial variation between member states with the highest prices in Sweden, Denmark and Austria and the lowest in Spain and the Czech Republic.

They have risen by 8.3% since last month and are 24.4% higher since last year. The packing prices for class A eggs are currently €132.7 per 100kg.

The recent rise is partly due to seasonality but also because of the shortage posed by Fipronil.

Dutch leading way in EU cross-border trade

She said there was considerable cross-border trade in the EU with the Dutch leading the way, followed by Germany, France and Spain.

International trade

Commenting on the international trade perspective, she said the EU was the second largest exporter of egg and egg products behind Turkey last year, exporting 246,000 tonnes.

Major export destinations continue to be Japan and Switzerland but there has been an upsurge from Far East nations, including Taiwan and Thailand.

Challenges ahead for EU egg sector

Concluding, she said the challenges ahead included meeting consumer demands of moving to cage-free systems and climate change, which could pose heat problems for Southern European producers.

US layer market is over-supplied

Professor Hans-Wilhelmina Windhorst, IEC statistical analyst, said the US market was still over-supplied with between 300-320m layers while the country only required 285m. Consumption is rising but not by enough to remove the surplus of eggs.

Prof Windhorst said one of the reasons for the oversupply was the move by some producers post the 2015 AI outbreak to invest in cage-free flocks but at the same time keep their caged birds, which could be reared at lower cost. Cage-free numbers have risen from 23.6m to 41.2m hens in the past couple of years.

Prices have changed considerably too over the past 24 years. At the height of the AI epidemic in 2015 eggs were selling at more than $2 per dozen (farm egg prices) but they are currently around 47 cents. While the retail price has come down, it is still at $1.40/dozen.

Move to cage-free by 2025

Looking ahead, Prof Windhorst warned of a potential economic trap over the move to cage-free by 2025.

“Many companies have given rather vague agreements relying on whether the consumers are willing to pay a higher price. That’s a very risky situation.

“So, I expect to see the building of new large cage-free systems slow down considerably in the next 2 years. It will nevertheless still speed up the consolidation in the egg industry as perhaps 45-50% of flocks will be in cage-free systems by 2025.”

Will California become a cage-free state?

All eyes are currently on California, which is to hold a ballot in November on whether to move to a cage-free State by 2022. It will need 40m layers to meet demand if the resolution is passed.

Plans to get a Bill through Congress were scuppered by other agricultural interests and currently there is a myriad of different systems at State level being proposed.

Tony Mcdougal Freelance Journalist