| LEI-persbericht: Lowering of import levy disastrous for competitive position of Dutch egg industry
22-11-2012
- Published on November 19, 2012
- By Agricultural Economics Research Institute
LEI Wageningen UR has just completed a study for EUWEP, the umbrella organisation for egg dealers, packing stations, egg product manufacturers and poultry & game dealers, to examine the competitive position of the European egg industry. The study compared cost prices of consumer eggs and whole egg powder in the major egg-producing EU countries and selected countries outside the EU. The results show the EU countries have a significantly higher cost price than the countries outside the EU, but current import levies are protecting the EU market from being flooded with imports. If import duties are cut in half, all third-party countries would be able to offer whole egg powder at lower prices than the European egg industry.
Keeping laying hens in traditional cages has been prohibited in Europe since 1 January 2012. As of that date, egg producers had to switch to enriched cages or alternative housing systems. That switch has meant an increase in the cost price of eggs. Meanwhile, the EU is negotiating with other countries on liberalising the trade in agricultural products. Right now, import levies are keeping the EU from being inundated with mass imports of eggs and egg powder from other countries. Even more than eggs, egg powder is a product that is easy to transport over long distances. With the low cost price of egg production and low transport costs, the prices at which egg producers in other countries can offer whole egg powder is competitive. In 2010, compared to the average production costs in the EU for whole egg powder, costs were lower in the Ukraine (79%), the United States (80%), Argentina (75%) and India (80%).
As of 2012, the cost price in the EU has gone up due to the switch to animal-friendly housing systems. This switch has meant that as of right now, 15% of the total production costs at egg farms is directly linked to European legislation. Meanwhile, Argentina, India and the Ukraine have no animal welfare legislation, and laying hens are kept in traditional cages. These hens have much less space than hens in the EU, and their cages have none of the amenities that the new EU legislation requires, such as laying nests, litter and perches. If European legislation and regulations push the costs for European egg farmers up while import levies go down, this could have a considerable impact on the competitive position of the European egg sector.
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