International Egg and Poultry Review - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week looking EC Measures to Support the Poultry Market.

European Commission Measures to Support the Poultry Market

On June 21, 2006, the management committee for eggs and poultry approved a Commission proposal to allow the co-financing by the EU budget of measures to support the poultry market. Outbreaks of highly pathogenic avian influenza across the EU earlier this year resulted in an excess supply of poultry meat and eggs after consumers lost confidence in the safety of those commodities. Poultry consumption fell as much as 70 percent in some countries. FAO revised the 2006 forecast of global poultry meat consumption down nearly 4 million tons.

The combination of high inventories, additional costs for storage and associated low commodity prices led to a market crisis. European poultry stocks reached over 300,000 MT. Up to this time, the only market support measures were export subsidies. There was no possibility to provide EU aid due to market problems linked to a fall in sales caused by a loss of consumer confidence.

The new aid measures are aimed to temporarily reduce production, not to provide aid for private storage or the destruction of existing stocks of meat. Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, said “Thanks to the recent improvement in the market situation, the industry should be able to use existing stocks.” The expected cost to the EU budget of the measures proposed is between €50 and €65 million (US$63.8* and US$82.8* million). The aid measures which can be covered are: the destruction of hatching eggs; processing of hatching eggs; the destruction of chicks (of chicken, guinea fowl, duck, turkey and goose); the early slaughter of some of the breeding flock; the extension of periods of temporary non-production beyond three weeks; voluntary reduction in output by reduced placing of chicks; early slaughter of ready to lay pullets.

Fourteen Member States have requested aid measures: Czech Republic, Germany, Greece, Spain, France, Ireland, Italy, Cyprus, Hungary, the Netherlands, Austria, Poland, Portugal and Slovakia. Cases of avian influenza H5N1 in wild birds have occurred in fourteen Member States and outbreaks in domestic poultry have occurred in France, Sweden, Germany, Denmark and Hungary.
*On July 10 €1 = $1.2736
Source: Europa Press Release, Food and Agriculture Organization, news wires

European Commission Investigates Italy

On July 4, 2006, the EC decided to launch an investigation into the measures taken by Italy to deal with the AI crisis. Italy’s government planned to purchase 17,000 metric tons of poultry meat and other poultry products, to suspend tax payments and social security contributions and payments for operators in the poultry sector, and to grant aid for loans for conversion and restructuring of poultry undertakings affected by the crisis in the poultry sector.

Italy’s commercial flocks have not had a case of Highly Pathogenic Avian Influenza H5N1. After several wild swans and ducks tested positive in February 2006, Italian authorities reacted quickly and applied the emergency measures called for in the national plan, which complies with EU and international requirements.

Average per capita consumption in Italy before the AI scare was about 18 kilos of poultry meat and 200 eggs per. After AI was found in wild bird in Italy, consumption fell sharply. In ordinary times, Italy has 2,750 broiler farms producing 700,000 MT of meat annually, 700 turkey farms producing 350,000 MT of meat annually and 2,000 farms producing 13 billion eggs each year.

Italy has one month to respond to the investigation and to provide necessary details. Once the decision is published in the Official Journal of the European Union, other stakeholders will have one month to send in their comments.
Source: European Commission, USDA Foreign Agricultural Service, news wires

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Source: USDA's Agricultural Marketing Service - 12th July 2006