October 20, 2009

Many German egg producers had been caught out and forced out of production consequently, because the industry delayed converting its systems in preparations for the new legislation governing the use of cages before an EU-wide ban in 2012, said Klaus Torborg of Lohmann Animal Health.

 

The number of layers dropped from 40 million to around 33 million, and self-sufficiency in eggs fell from 70 percent to 55 percent. Imports flooded in from other countries, particularly Holland, which had been quicker to convert its systems, Torborg said.

 

Under a 'red/green' government, Germany was over-eager in complying with EU policy and required enriched cages. But when the government changed to a conservative administration, the efforts of producers who had installed enriched cages were not rewarded. Their eggs were simply labelled as 'Class 3', the same as those from standard cages, said Torborg.

 

Producers have been faced with large-scale investment, but because of high level of demand, getting the equipment supplied in the time available has been more of an issue than simply price or even preferred choice.

 

A further big influence on the industry is what the Germans term the 'discounters' - supermarkets such as Aldi, Lidl and Netto.

 

The discounters accounted for around 47 percent of all eggs sold in Germany, and eggs would not be sold for marketing/animal welfare reasons. So most egg producers would have to convert to the barn system despite of high investment in enriched cages, he said.

 

Cage houses converted to the barn system hold far fewer birds due to the lower stocking density, so many producers are faced with putting up new buildings if they wish to maintain their hen numbers.

 

Investment costs for converting to a barn system in Germany would be EUR20-22 per bird place, EUR28-32 if putting up a new building; EUR18-22 for enriched cages and EUR15-20 for free-range and organic. Costs of production, per egg, would be increased by one cent for enriched cages, 2.4 cents for a barn system and 3.5 cents for free-range, said Torborg.

 

Next year it is anticipated that 60 percent of eggs will be produced in barn systems, 20 percent in enriched cages and 20 percent from free-range and organic, explained Torborg.

 

German egg consumption is healthy with the 80 million human population consuming an average of 207 eggs per head per year compared with 172 in Britain, but the discounters are likely to put increasing pressure on prices, he said.

 

Currently, one discounter sells barn and free-range eggs for EUR1.29 and EUR1.59 per 10 respectively. In general, producer price levels are reasonable.

 

US$1 = EUR0.6678 (Oct 20)