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26/09/2017

The egg-laying poultry sector is hanging on (I)

Ricardo Migueláñez. @rmiguelanez

Last year was not a particularly good one for the egg-laying poultry sector, according to indicators recently obtained by the Ministry of Agriculture. You could say that the sector is still hanging on to its last positive annual performance, in 2015. The increase in egg production and in the census of laying hens was accompanied by a notable slide in prices, while there was also a slight decline in consumption and, most importantly, exports.

The value of final egg production at current farm gate prices declined again in 2016, from 1 billion euros in 2015 to 991.1 million euros, i.e. 0.94% less, a far cry from the 1,207.7 million obtained in 2012 and the 1,109.5 million in 2009.

The egg-laying poultry sector accounted for 6.1% of last year's final stockbreeding production numbers, at 16,377.1 million euros, and 2.1% of the value of final farming production, which amounted to 46,807.2 million euros, according to estimates from the Ministry of Agriculture and Fishing, Food and the Environment.

It's worth noting that the number of farms in terms of bird species in Spain has increased by 50.9% in the last decade (2007-2009). According to the General Register of Livestock Holdings (REGA), in March 2017 there were 19,728 farm eggeries, 6,653 more than in 2007. The majority—9,540—are home to the Gallus species (meat and egg production), accounting for 48.4% of the total (barely 0.5% and 45 farms less than ten years ago).

Those are followed by farms with partridges, of which there are 2,322 (+292.9% and 1,731 more than in 2007); pigeons (+192.33% and 1,029 more); turkeys, of which there are 1,527 farms (+110.3% and 801 more); quail, with 1,520 (+378% and 1,204 more); pheasant, with 1,477 farms (+453.2% and 1,210 more); ducks, with 739 (+100.8% and 371 more), geese, with 489 (+171.7%); 310 are ratite farms (flightless birds, like ostriches), which declined by 30.95% compared with 2007 (449 farms), and another 240 are Guineafowl (+328.6%).

As for egg-laying hen farms, in terms of the zootechnical classification, according to the REGA, in 2016 there were 1,260 production farms (Catalonia, 248; Canary Islands, 162; Andalusia, 161; Castile-León, 122, etc.) and another 288 were bird breeding farms (Catalonia, 69; Canary Island, 52, Castile-La Mancha, 50; Aragón, 35; Castile-León, 24, etc.) while 55 were factory farms (Catalonia, 29; Galicia, 6, Valencia region, 2) and 12 were genetic selection farms (Castile-León, 4; Andalusia, Madrid and the Basque Country, 2, and 1 in the Balearic Islands and Extremadura).

In the last ten years, laying hen farms have declined by 29.8%, falling from 1,796 in 2007 to 1,260 last year, while bird breeding farms have slipped by 26.5%, from 392 to 288 during the same period. Factory farms have fallen by 44.4%, from 99 to 55, and generic selection farms by 76%, from 50 to just 12. This past June, REGA registered a total of 1,284 farms, 0.54% less than in January of this year and 11.6% more than in January of 2012.

Greater census

The average census of laying hens increased again last year, by 5.7%, to 43.61 million, the same as in the previous two years (5.3% in 2015, with 41.27 million more than in 2014, and 2% in 2014, with 39.18 million more than in 2013, when there were 38.41 million).

As for breeding systems, the majority, i.e. 40.53 million (92.9%) were in cages; slightly more than 4%, i.e. 1.76 million, were free-range hens; another 2.4% and 1.05 million were cage-free and 0.6% were organic egg-laying hens. The number of hens raised in cages and organic hens increased compared with 2015, by +7.1% and +58.4%, respectively, while cage-free and free-range hens declined by -9.9% and -15.6%, respectively.

However, all breeding systems increased in the last decade, except for caged birds: cage-free by 39.6% (the 2007 census indicated there were 754,375 hens); free-range hens by 117.7% (805,800 in 2007) and organically raised animals by around 175.9% (just 96,871 ten years ago). The number raised in cages declined by 10.25% and by almost 4.63 million during the period.

In the European Union, based on 2015 data, Spain ranked third with an average of almost 387.58 million birds, accounting for 11.3% of the total, trailing only Germany, with 13.6% and 52.58 million, and France, with 12.5% and almost 48.6 million. Behind Spain is Poland, with 11.2% and 43.47 million; the UK (10.9% and 42.18 million); Italy (10.7% and almost 41.63 million); and the Netherlands (8.8% and 34.18 million), while the remaining 21% and 81.33 million correspond to other EU countries. Barely 14.8% of the census corresponded to alternative breeding methods (cage-free, organic, free-range), with close to 57.5 million, while the remaining 85.2%, or almost 330.1 million, were birds raised in cages.

Egg production

Hen egg production in Spain increased by 5.7% in 2016 year-on-year, to 1,125.71 million dozen, according to provisional data based on the increase in poultry numbers. According to data from 2015, the leading region in terms of production was Castile-La Mancha, accounting for more than one-fourth of the total (25.9%) and close to 276.1 million dozens of eggs, followed by Castile-León (18.1% and 192.74 million); Aragón (11.9% and 126.7 million); Catalonia (9.1% and 96.97 million); Valencia (8.1% and almost 86.1 million); Andalusia (5.9% and 62.7 million); Galicia (4.3% and 45.81 million); Navarre (2.9% and 31.36 million), etc.

In the EU-28, Spain produces 11% of the total. In 2016, Spanish production amounted to 828,000 tons of eggs, ranking it fourth, after France (12.7% and 953,000 tons); Germany (11.7% and 876,000 tons) and close to Italy (11.2% and 840,000 tons). It's ahead of the UK (10.4% and 777 million); the Netherlands (9.5% and 715 million), Poland (7.9% and 590 million); and Romania (4.8% and 360 million), among others.

Foreign trade

Last year, Spanish egg exports declined notably. In terms of exports to other EU countries, the decline was attributable to fewer sales to priority destinations, such as Italy, Portugal, the UK and Germany, which weren't offset by increased sales to France, which remains Spain's leading customer with 41.9% of the market share (48,736 tons), compared with 34.3% in 2015 (42,755 tons).

Of the total exported, i.e. 167,603 tons, which corresponded to shell eggs, around 14.3% and 28,062 tons less than in 2015, and 79.4% and 133,041 tons (- 8.8%) correspond to exports to other EU countries, while the remaining 20.6% and 34,562 tons (-30.6%) were exported to non-EU countries.

In the first quarter of 2017, exports continued to slide, down 10.5% year-on-year, to 36,736 tons (27,739 tons to the EU and almost 9,000 tons to non-EU countries), while imports have expanded by 5.07%, to 9,075 tons, almost all of which come from other EU countries.

In terms of destinations, exports of eggs and egg products increased in the first quarter of 2017 year-on-year to France (+7.01%), the Netherlands (+50.8%) and other countries (+40.34%), though they declined to Italy (-31.17%), Portugal (-11.31%) and the UK (-37.9%). Exports to non-EU countries tumbled, specifically to Israel (-29.2%), the US (-100%), Mauritius (-7.24%) and Hong Kong (-45.59%), most likely due to the appearance of bird flu in ducks from Catalonia during that period (an issue which has essentially been resolved), while exports to other destinations have increased by 17.6%.

Spain imported than 50,228 tons of eggs, up 12.4%, almost all of which came from the European Union (49,433 tons), though 795 tons came from non-EU countries.

Commercial relations with the European Union in the livestock sector is broadly positive for Spain, given that we export 2.7-times more than we import from other EU countries. That figure was 2.6-times in 2007, and exports that year hit a new record at 175,356 tons, while imports amounted to 66,656 tons, also a record. It's worth noting that, in 1986, when Spain joined the European Economic Community (EEC), we only exported 1,094 tons, compared with imports, which totaled 3,941 tons.

Outside the EU, our commercial relationship is broadly positive (43.5 times); in 2016, Spain sold 34,562 tons to countries outside the region, compared with imports, which amounted to just 795 tons. A record was set in 2015, when exports reached 49,807 tons, due to greater demand from the US, which had to sacrifice thousands of birds with bird flu. Egg imports peaked in 2012 at 1,468 tons.

Main destinations

As we mentioned above, the primary destination for Spanish eggs was France, with a market share of 41.9% and 48,736 tons. It's followed by Italy (16.1% and 18,757 tons), the Netherlands (14.9% and 17,405 tons); Portugal (11.3% and 13,123 tons); the UK (8.5% and 9,952 tons); Germany (5.6% and 6,571 tons) and the rest of the EU (1.6% and 1,888 tons).

In terms of the type of products exported to the EU, 35.7% of the total were eggs for consumption (41,616 tons); 34.25% were eggs for hatching (39,822 tons); 14.5% were eggs without the shell (16,918 tons); 11% were egg yolks (12,767 tons), and 4.6% were egg whites (5,310 tons).

Between 2008 and 2016, exports of eggs and egg sector products to the European Union fell by 19.2%. In 2008, sales amounted to 144,053 tons, peaking in 2009 at 154,042 tons. Eggs for human consumption tumbled by 60% in that period, from 103,916 to 41,616 tons, peaking in 2009 with a new record: 119,156 tons.

In contrast, there was a sharp increase in sales of eggs for hatching, which have expanded by 283.1% since 2008, increasing from 10,396 to 39,822 tons, although a record was set in 2015, with 43,110 tons. As for whole eggs without the shell, exports declined by 15.6%, from 20,046 to 16,918 tons, reaching a record in 2011 with 26,304 tons; with regard to egg yolks, exports increased sharply, by 312.4%, from 3,096 to 12,767 tons, setting a new record in 2011 with 16,991 tons; egg white exports fell by 19.5% between 2008 and 2016, from 6,599 tons to 5,310 tons, after peaking at 7,803 tons in 2015.

Last year, 32,240 tons of eggs were exported to non-EU countries, the main destination being Israel, with 25.2% (8,116 tons), followed by Mauritius (17% and 5,495 tons); Hong Kong (10.5% and 3,383 tons); the US (9.3% and 3,011 tons); Gaza-Jericho (5.9% and 1,891 tons); Gambia (4.3% and 1,392 tons); Saudi Arabia (3.7% and 1,177 tons), the United Arab Emirates (3.1% and 1,010 tons); Russia (3% and 968 tons), etc.

Around 83% of those exports were eggs for human consumption (28,406 tons); another 15.3% were eggs for hatching (5,230 tons); 1.2% were whole eggs without the shell (405 tons) and 0.6% were egg yolks (191 tons).

From 2008 to 2016, egg sector sales to non-EU countries have increased, although last year wasn't a great year after sales peaked at 49,582 tons in 2015. The change during this period was 395%, where exports increased from 6,918 tons to 34,241 tons last year, especially eggs for human consumption, with an upswing of 623.9%, from 3,924 to 27,406 tons, although the total went as high as 42,635 tons in 2015. Eggs for hatching (+93.9%), egg yolks (+162.2%) and eggs without the shell (+81.6%) increased in the period, although just 8 tons of egg whites were exported in 2016.

Nevertheless, global exports (both in and outside of the EU) amounted to 150,971 tons of eggs with shells in 2008 and 150,673 tons in 2016, i.e. a decline of 0.2%. Exports to the EU slipped by 19.2% during the period, from 144,053 tons to 116,433 tons. In contrast, imports in the EU increased by 140%, from 14,835 to 35,583 tons; imports from non-EU countries rose by 140.4%, from 15,145 to 36,378 tons.

The sector's revenues from trade amounted to 172.25 million euros in 2016, i.e. 25.4% and 58.7 million less than the previous year, when they peaked at 230.95 million. EU countries yielded revenues of 116.93 million, and non-EU countries 55.32 million, which are 18.9% and 37.7% lower than the previous year, respectively.

Egg imports totaled 85.32 million euros in 2016, almost 14% and 10.5 million lower year-on-year. Of the total, 79.68 million came from EU countries and 5.64 million from non-EU countries, reflecting growth of 11.5% and 64.9% year-on-year, respectively.

Between 2008 and 2016, Spanish egg exports rose by 13% and slightly more than 20 million euros, whereas imports increased by much more, 93.1%, i.e. 41 million euros more. Nevertheless, the foreign trade balance is clearly positive for Spain's egg-laying poultry sector.

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26/09/2017