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USDA GAIN: Poultry and Products


07 October 2014

USDA GAIN: EU-28 Poultry and Products Annual 2014USDA GAIN: EU-28 Poultry and Products Annual 2014

EU-28 broiler sector is expected to grow in 2014 and 2015, benefiting from slowly increasing demand, since it is less affected than other meats by the economic recession. Brazil and Thailand will remain the largest suppliers of broiler meat to the EU-28. EU-28 broiler meat exports are expected to decrease slightly in 2014, mainly due to the Russian embargo and increased South African tariffs on EU poultry meat, but should increase in 2015. However, the turkey sector in the EU-28 resumed its decline as both trade and consumption are expected to decrease.

USDA GAIN: Poultry and Products

The EU-28 broiler sector is expected to continue to grow in 2014 and 2015, benefiting from slowly increasing domestic demand and because it is less affected than other meats by the economic recession since it is cheaper and more convenient. The overall EU-28 production in 2014 encompasses various situations, but broiler meat production is expected to increase from 2013 in most major EU producing countries, including the UK, Benelux, Spain, Poland, Germany Italy but will decline in France which was hit by the removal of the EU-28 export subsidies.

The hike in global grain prices in 2012 and 2013 directly impacted broiler production costs, although producers were able to pass most of the increase on to their domestic customers. They were therefore able to maintain their operational margins or saw them lowered only slightly. The significant decline in grain prices in late 2013 and 2014 and expected price weakness in 2015 are likely to boost broiler meat competitiveness and increase operating margins, even if retail prices decrease.

The EU-28 broiler trade surplus is expected to remain stable in 2014 and 2015 in light of stagnant imports and slightly decreasing exports. Brazil and Thailand remain the largest suppliers of broiler meat to the EU-28. The opening of the EU-28 market to Thai un-cooked broiler meat on July 1, 2012, led to a significant increase in exports of Thai salted and frozen broiler cuts and parts to the EU-28 to the detriment of Brazilian exports. It has been reported that the quality of Thai broiler meat exports better suits EU importers’ needs.

EU-28 broiler meat exports are now expected to decrease in 2014, due to both the Russian embargo on certain EU food products imposed in August 2014 and the decrease in exports of French frozen whole broilers to the Middle-East region after the suspension in July 2013 of all EU-28 poultry meat export restitutions. Those lost volumes in frozen whole broilers were not fully compensated by exports of low-priced cuts and mechanically deboned meat (MDM) to Sub-Sahara Africa were affected, especially South Africa and Ghana. South Africa is now becoming the largest customer of EU-28 broiler meat, closing in on Saudi Arabia. The increase in import tariffs in South Africa in July 2014 is likely to slow down the growth of EU-28 exports to this region. Exports are expected to resume their growth in 2015, especially since lower production costs, due to lower world grain prices, should increase EU-28 broiler price competitiveness.

While all sources show that total meat consumption in the EU-28 has been negatively impacted by the economic recession, poultry meat, which is the cheapest source of protein, was less affected. Its consumption per capita is stable or slightly increasing. In the EU-28, sales of cheaper broiler cuts also increased faster than sales of more expensive parts, such as breasts or whole birds.

EU-28 turkey production is now expected to decrease in 2014 and 2015, after a temporary surge, due to production hikes in the UK. Turkey meat imports should remain stable in 2014 and 2015 under import quota control. French turkey exports to Africa are expected to remain stable but German and Dutch exports to Russia are going to be impacted by the Russian embargo. After stabilization in 2012, mainly due to in-store promotions in UK, turkey meat consumption in the EU-28 as a whole is expected to resume its decline in 2014 and 2015.

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