February 10, 2004

 

 

EU 2004 Poultry Outlook

 

In 2003, the EU Poultry sector decreased from previous levels.  The decrease was mainly caused by the summer heat wave, the outbreak of the Avian Influenza in the Netherlands as well as by the continuing decline in French poultry production.

 

In 2004, EU Poultry production is expected to increase as the Netherlands is recovering from Avian Influenza.  French, Italian and to a certain extent Spanish production is expected to continue to decrease.  Overall EU imports are expected to decline, due to the complete closure of the loophole on imports of salted poultry meat and the impact of the EU embargo on Thai poultry meat.  Overall EU chicken meat exports are expected to grow since Dutch exports are expected to resume.  EU turkey meat exports are expected to remain stable.  Domestic consumption is expected to continue the normal trend, slightly increasing.

 

Also in 2004 the effects of Enlargement and of the CAP-reform will start.  In the accession countries there is a tendency toward growing poultry consumption.  There is also uncertainty concerning the degree of integration slaughterhouses from CEEC[1] countries will have onto the current EU-15 market.  As a result many of the poultry products produced and slaughtered in these countries may not be immediately eligible to be placed on the current EU-15 market.

 

Due to the current outbreak of the Avian Influenza in Thailand and the subsequent ban on Thai exports of poultry to the European Union, the poultry situation is somewhat difficult to forecast.  Most of the imported chicken meats are however cooked poultry products, which are not expected to be effected by the embargo.  It is forecast that in 2004 there will be fewer chicken imports into Germany, the UK and the Netherlands.  However Brazilian imports are expected to compensate for some effects of the Thai poultry ban.

 

CHICKENS

 

In 2003, the overall EU chicken meat production decreased from previous levels, but not as much as previously forecast.  The effects of the Avian Influenza outbreak in Netherlands in the spring of 2003 and last summers heat wave were less severe than earlier anticipated.  Production decreased in Netherlands, Italy and France, while production increased in Germany and the UK.  The increase in production in Germany was also indirectly due to Avian Influenza since many German broilers were slaughtered in Germany instead of sent to the Netherlands for slaughter.  The decrease in French production is mainly due to sluggish demand, both domestically and abroad.

 

Imports in 2003 increased in Germany, Spain and Italy.  The strong increase in Germany can largely be attributed to the fact that the custom loopholes, related to import tariffs for salted chicken, were closed only in August 2003 in Germany, which was much later than in the other EU member states.

 

On the other hand, imports of frozen cuts continued to surge, despite the higher tariff, since these cuts are much more price competitive for the processing industry than EU produced cuts.

 

EU exports of chicken meat decreased significantly in 2003 in the Netherlands also because of Avian Influenza.  Exports (especially of cuts) increased in France, which benefited indirectly from the Avian Influenza in the Netherlands.  There were also slight increases in exports in Germany and Spain. Note that traditional French exports of frozen whole chicken to the Middle East region remained stagnant in 2003. 

 

In 2004 EU production is expected to increase due to the Netherlands recovery from Avian Influenza combined with a small increase in production expected in Germany.  Italian, French and Spanish chicken production is expected to decline again, while UK production is expected to remain stable.

 

Overall EU imports in 2004 are expected to decline due to the full implementation of the closure of the loophole on salted poultry entering Germany.  Frozen chicken part imports from Brazil may increase, aided by a strong euro.  On the other hand, the sanitary embargo on Thai chicken meat exports may reduce overall EU imports, even if Brazilian imports replace part of the Thai imports.  A portion of Thai imports into the EU is made up of cooked chicken meat, which is not expected to be affected by the embargo.  EU and Singapore are for the moment the only two countries accepting cooked Thai chicken. Thailand however has capacity of processing more cooked chicken meat if there is a market for it.

 

EU exports are expected to grow in 2004, set in motion by the resumption of exports from the Netherlands, although French and Spanish exports are expected to decline.  French exports may slightly benefit from the embargo on Thai poultry meat but probably less than the Netherlands since France is more competitive on whole chickens.  Other Member State exports are expected to remain stable. 

 

Trade sources expect that the Avian Influenza outbreaks in Asia will benefit Brazilian and U.S. poultry exports to Japan, which could in return give opportunities for EU poultry exports to Russia.

 

Authorities in Thailand expect to have the outbreak of the Avian Influenza under control in two months. The Thai Government has so far appropriated 3 billion Bhat (800 million US$) in compensation for the losses to Thai farmers.

 

EU chicken meat consumption in 2004 is anticipated to continue the normal trend with a slight increase above 2003 levels, which would result in total domestic use being lower than in 2003.

 

In late 2004 overall EU chicken consumption is expected to increase due to the growing consumption trend in the accession countries.

 

 

Source: USDA