The poultry sector, as the rest of the economy, is going through difficult times facing the aftermath of the Covid pandemic. This crisis was not caused by European agriculture, but it is our responsibility to maintain the investments already made and ensure our capacity to keep on following the EU standards of production.
When it comes to poultry, most people simply don’t know that our sector is a traditionally free-market segment that always functioned under the most competitive terms: we are covered by EU CMO (common organisation of the markets) rules, but we never benefit from any aid coming from the EU. Therefore, we are a sector that has been capable — until now—of adapting to societal demands and scientific/technical developments whether we are speaking about animal health, welfare, or environmental issues.
So far, we have been able to afford those adaptations. In 2012, the transition towards enriched cages or other alternative systems for laying hens necessitated a substantial investment for producers. We made this investment without passing on the cost to the consumer. We were able to afford it mostly because poultry meat is the most highly demanded animal protein in the EU, and its consumption has steadily increased.
However, with the Covid crisis and the closure of restaurants, hotels, and catering services, the magnitude of the impact on our sector has been unprecedented. Meeting the objectives of the Farm to Fork Strategy will be financially impossible if nothing is done to help usrecover. Quite simply, the level of capital it demands greatly exceeds what we are able to commit to in the current market environment.
The double impact of Covid-19 and unprecedented imports
Lockdown measures have put a stop to all out-of-home consumption. This represents 20% to 40% of production, depending on the member state. And, in the case of some species, almost 100%. “Small species”, such as duck, pigeon, quail, rabbit, guinea fowl or goosecannot be sold easily or at all through retail due to very distinct differences in their respective supply chains.
At the same time, hundreds of thousands of tonnes of poultry meat are imported into the EU from third countries every year (mainly from Brazil, Thailand, and Ukraine — as well as thousands of tonnes of eggs from Ukraine or the USA). Most of these meats are destined for out-of-home consumption, and therefore cannot be marketed now.
This has led to an expected situation of oversupply, cold storages everywhere in Europe being at full capacity with storage costs that keep increasing as the crisis worsens.
More than €100m has already been spent EU-wide.
In parallel to this, a staggering 12% drop in price has occurred over the last seven weeks putting even greater pressure on European producers. Should this dynamic continue, many farmers will be forced out of business.
This will have a knock-on effect that results in the loss of thousands of jobs in rural areas at a moment when all forecasts indicate that we are heading into a long recession.
What end-consumers also need to know is that the poultry sector is a sector with actors having very specialised roles. If there is a bottleneck at the level of breeders or processors, the effects are felt immediately and for a long time throughout the entire supply chain. As a result, many farms are only partially stocked or completely empty today. They will have little to no income until the situation goes back to normal, so the situation is dire.
Since the beginning of the crisis, I estimate that onebillion chickens have been lost! If we include ducks and quail, approximately 20m chicks are not being placed on farms each week.
In the short term, and to avoid full collapse of the sector and ensure food security, our farmers are asking for support to keep their farms, investments and jobs, so that they can be ready to restart their operations when the demand comes back.
We can’t afford to wait years for this aid to reach us through complex and confusing bureaucratic channels, we need it now. The situation on the ground requires urgent action to be taken. At the same time, in the specific case of poultry, private storage aid would be extremely useful for the duration that HoReCa is closed.
However, in a situation where prices are falling due to oversupply, and while a lot of farms are empty and the actors of the supply chain are not working at full capacity, it is obvious that imports from third countries should be tightly managed according to changes in consumption habits. Authorities must make sure that these imports are in line with international law and follow the letter of the treaties. EU poultry production has the highest standards, but the respect of the rules makes it weak against imported meat with much lower costs of production.
In the longer term, there is a solution for both the needs of the producer and thedemands of the consumer that is also budget-neutral: origin labelling for fresh, chilled, or frozen meat, as well as processed products. This should be applied to poultry products sold inretail as well as in hotels,restaurants, or catering.
Charles Bourns is a poultry farmer from Gloucestershire, in the UK and Copa-Cogeca’s poultry meat and eggs Working Party chairman.