Editorial – Market Impacts of EU Battery Cage

The EU directive banning battery cages for laying hens had much to commend it but the impacts on the egg market may have been overlooked or underestimated.

Just three months after the ban came into force on 1 January, EU egg production is reported to be down by between 10 and 15 per cent and there has been much disruption in the market.

Despite years of advanced warning, many egg producers failed to replace in time their old cages with the so-called enriched or colony cages, which are acceptable under the new directive.

It had been expected that some farmers intended to leave egg production rather than update their housing systems: the Commission had estimated 2.5 per cent drop in egg production. However, the Directive has had a much bigger impact than predicted.

Furthermore, markets are suffering disruption in less obvious ways. In the UK, for example, prices have increased substantially but the free-range sector continues to have a tough time due to over-supply as so many new free-range units have been built recently. Few British egg producers opted for barns or aviaries as alternatives to battery cages.

Bearing in mind that the whole UK egg industry was largely compliant with the directive in advance of the ban, the plight of its free-range producers seems unfair, if not entirely unexpected.

From Member States less well prepared for the changes, there have been reports of substantial increases in egg prices. Farm–gate prices for eggs increased 72 per cent between 2011 and the end of February in Spain, for example. In the Czech Republic, one egg cost 2.50 crowns in December but 7.00 crowns in the run-up to Easter.

The situation in the Czech Republic highlights another problem: that country was heavily reliant on imports of eggs from Poland, which was only minimally prepared for the ban on battery cages. Supplies from there to the Republic dried up almost overnight as the EU authorities made it clear they will come down hard on any national governments allowing trade between Member States in ‘illegal’ battery eggs.

Spain’s poultry industry is under attack from all directions, it seems. Not only were egg farmers unprepared for the battery cage ban but the present drought is hitting domestic feed crops yields, as previously reported. Now, the country's farmers are threatened by a possible ban on imports of soy and other products from Argentina. The ban is being considered in retaliation for a political wrangle between the two countries over the ownership of an oil company.

Colombia's farmers are concerned about the free trade agreement (FTA) with the US, which begins on 15 May 2012. The agreement will eliminate most tariffs immediately and phase out the remaining tariffs over periods of up to 19 years – 18 years for chicken leg quarters because of fears that US leg quarter exports could overwhelm the Colombian market.

This treaty is a double–edged sword for Colombia. The livestock sector generally wants access to cheap corn and soybeans to feed their animals, since they import large quantities of these products from the US, while the poor state of the country's roads may be put into the spotlight.

FAO recently convened the First Global Multi-stakeholder Forum on Animal Welfare, with more than 250 participants representing the food industry, farmers, the civil society, inter-governmental organizations, governmental authorities and the academia in 35 countries, which reflected the growing conviction that animal welfare is an issue of widespread interest, said the organisers.

Turning to bird flu news, a significant outbreak of H5N1 highly pathogenic avian influenza has been reported in China's Northwestern Ningxia Hui autonomous region, involving 23,000 chickens on several farms in one village. H5N2 low-pathogenic bird flu has been found in another flock of native chickens in Taiwan.