August 2, 2013

France provides subsidies to support poultry processing plants

France is providing up to US$330,000 of funds to local poultry production plants for investments in processing lines, until September 15, 2013.

The level of subsidy is dependent on factors including the size of the business and its location. Only combined processing facilities will qualify: farm-based slaughtering is specifically excluded, as are processing facilities without slaughtering lines.

The programme is being overseen by FranceAgriMer, which is currently home to a national ad hoc subsidy commission. The scheme has been under discussion with the poultry industry for some months. Eligible projects include automation and robotics.

However, such investments accounted for less than 3% of the French poultry industry's 2011 cost base, according to figures released by FranceAgriMer. With staff costs for the industry hovering at just under 12% of production costs, present economic conditions may prove a challenge for capital-intensive projects. The same document notes the relentless rise in feed costs for poultry, with the feed price per kilogramme of finished poultry (live weight) reaching US$0.85/kg for the year towards the end of May.

With an averaged out all-industry figure of US$1.32/kg as the going rate for live poultry during the first half of the year, producers have been losing at least US$0.09/kg live weight on their production during this period. During 2011 and 2012, FranceAgriMer notes that retail gross margins rose faster than the price of live poultry arriving at the abattoir. This means that while live weight intake prices rose by US$0.16/kg (up 8% on-year) in the first half of 2013, these have been buffered by retail price rises of US$0.15/kg (up 3% on-year) over the same period.