International
Egg Commission Market
Review
No 73: Situation and Outlook Report for Sweden
September 2005
Chick Placements
2004 were over 20% or almost 900’ higher than the lowest point in
2001. Placements in the
second half of 2003 and the first half of 2004 were 5 549’, which
is the highest figure in 15 years.
Chick placements in the second half of 2004 were lower than the high level
the year before.
Placements in the first half of 2005 increased again and have even been
somewhat higher
than the record high level in 2004.
The voluntary
longer interval before new layers seems to have too little effect.
The conclusion must be that the Swedish egg production capacity is too
big.
The total production
in 2004 was almost 10% or around 9 000 tons higher than in 2003.
Packers purchases increased 11,5% or 7 700 tons in 2004.
considerable and was almost fulfilled in early 2005.
Of the total packers purchases divided according to type of production
system is estimated
for the second half of 2005: traditional cages 1%, enriched cages 36,5%,
barn 30%,
deep litter 26% and organic 6,5%.
35-40% in enriched cages must be the highest percentage in any country.
During the first years of the transition period 1999-2004 there was a
tendency to higher
percentage of surplus for alternative and organic eggs and less for cage
eggs. In the end
of the transition period this tendency diminished and showed no difference
between
various production systems.
Thus, from the market point of view or when it comes to consumer demand,
the transition
from cages to alternative systems of production has gone too fast - more
rapid on the
production level than on the consumption side. This is rather astonishing
figures and
seldom acknowledged. For the packing stations and the egg sector as a
whole,
this imbalance has been very costly.
To summarize the social experiment of the Swedish transition from
cages to alternative
production systems, nearly 100% through the transition or where other
EU will be in 2012,
is that the Swedish egg production so far has more than recovered the
production volume.
On the demand side the consumption level is higher than before the transition
out of
traditional cages.
Shell egg consumption per capita increased 10 eggs in 2004
In 2004 the shell egg consumption per capita went up 10 eggs
from 151 to 161, thus 6-7%
higher consumption in one year. The reason behind this astonishing increase
was the
transition to alternative systems and a good supply of a complete range
of eggs.
Nice weather during the summer/holiday season is estimated to decrease
the yearly egg
consumption by 1-2 eggs per capita due to less time and interest for baking
etc.
The nice weather in the summer of 2003 has most probably decreased the
yearly egg
consumption and the opposite in 2004.
The number of eggs consumed as egg products are estimated to have increased
with 5 eggs
per capita to 41 egg per capita in 2003 and levelled out on the same level
in 2004. This is
around 20% of the total consumption of shell eggs and egg products.
Surplus of around 7 000 tons was measured for the second half of 2004
and first half of
2005. Lower surplus is calculated during the second half of 2005.
Without longer intervals before new layers and especially earlier slaughtering
the surplus
had been much bigger.
The export of shell eggs increased in 2004 while the import decreased.
The same
development showed export (mainly dried) egg products and import of egg
products,
especially less import of liquid/frozen. This development with increasing
export and
decreasing import of both shell eggs and egg products is the opposite
and changing of
the trend compared with the years before.
In the year 2004 the import surplus of egg products decreased 3 000 tons.
The Swedish egg production has been decreasing during the last few years
before the
transition to alternative systems. Taking into account the Finnish eggs
to the Swedish
consumer market (consist mainly of cage eggs) and if you include egg products
the
selfsufficiency is calculated down to around 83% in 2003. In 2004 the
trend changed
and the selfsufficiency is going up again and estimated to 85% in 2004
and around
87,5% in 2005.
Average producer prices for caged eggs have increased since 1999 up to
the beginning
of 2004. Higher price for eggs from the increasing share of enriched cages
and lower for
the declining traditional cage eggs has contributed to this development.
Throughout 2004
the prices have declined substancially, especially in the end of 2004
and even more so
far this year 2005.
The price of barn and organic eggs showed a stable price level during
2002 and 2003,
but started downward already in the second half of 2003 and even more
in the second
half of 2004 and further more in 2005 up to now.
Higher surplus during 2004 and the first half of 2005 is the main reason
behind the sharp
reduction in the prices for all production systems.
In the last 4-5 years the price gap between cage eggs and barn and organic
eggs diminished
more and more. For barn eggs the gap in 2005 has gone down to half of
what it was in 2001.
The main reason behind this development is the increasing share of enriched
cages and the
declining share for traditional cages.
In late 2003 the feed price started to go up again quite drastically and
went on for a year
to the end of 2004. In 2005 the feed price has gone down 10-15%.
The egg/feed price ratio for cages (600 cm2),
including enriched cages (750 cm2),
during
the last years has been 4-4,50. Barn, including deep litter, has been
5-5,50 and organic
5,50-6,00. From early 2004 the ratio has decreased substancially with
10-15% for all
production systems and stayed on that level so far in 2005.A levelling
out and even a
slight recovery is seen during the summer of 2005, mainly due to lower
feed price.
Legislation/Welfare/Veterinary
amputation is not allowed, perches etc and almost 100% through a time
limited dispensation
period of the legislation banning those cages, the Swedish egg sector
is in favour of the new
EU Directive on welfare of laying hens banning traditional cages by 2012.
In the autumn of 2005 Sweden has around 99% of the total egg production
in non-traditional
cages. More than 1/3 of 36,5% of these are in enriched cages (750 cm2
cage area) in line
with the new directive. So far the results concerning the enriched cages
are very promising
and encouraging with generally better technical production results than
in the traditional
cages. In order to encourage a quicker transition to enriched cages several
of the packing
stations have had a price difference system with higher price for eggs
from enriched cages
and lower for traditional cage eggs.
Therefore, from the Swedish point of view it is of extreme interest that
the EU Directive on
welfare of laying hens banning traditional cages by 2012 are fullfilled
to 100% and not
changed at any point, especially when it comes to enriched cages.
The new directive will take away most of the negative competition differences.
Furthermore,
Sweden is a very limited export country with very high salmonella requirements
on import
and thus the directives negative aspects on unequivalent conditions of
competition hurt us
less and in a more indirect way.
Trade
As a result of the EU accession negotiations, Finland was authorized
to grant state aid to its
egg producers during a transitional period of five years (1995-1999).
This transitional period
has been prolonged to 2003 and again to 2007!?. Furthermore, there are
serious discussions
in Finland and negotiations with EU to make the prolonged transitional
period permanent.
In other words, the national state aid has replaced the earlier export
regulation and export
subsidy. This distorted and false competition is especially different
from what the new
entries and enlargement of the EU of the Eastern countries have achieved.
Furthermore
it is opposite to the ongoing development within EU with substancial reduction
in direct aid
to the production of different agricultural products.
An other irritating and unfair factor for the Swedish egg sector is that
outgoing Swedish
cages are sold cheap and put into production in Finland and Eastern countries,
often with
investment subsudies. These cheap eggs are then exported to Sweden to
compete with
Swedish alternative systems with much higher production costs.
Consumption trends/Retail trends/Consumer buying habits
In December 2003: "Regulation (EC) No 2295/2003 introducing
detailed rules for
implementing Council Regulation (EEC) No 1907/90, on certain marketing
standards for
eggs" was adopted. The Swedish egg sector is in favour of the Regulation,
e.g. improved
traceability, better control of egg sales in local markets, washing of
eggs under strict
surveillance and eggs to be allowed to be stamped at the packing centres.
From the Swedish point of view a breakthrow in the Regulation was the
permission for the
first time to wash eggs with Class A status as this question has only
been put forward by
Sweden. The permission is for a three years trying period and Sweden will
work hard to
make washing permanent.
Several packers in Sweden have a cool-chain combined with egg washing
under
governmental control adapted to the Swedish climate, structure of holdings,
low density
of the population and the long distances between the producers. Many Swedish
egg
producing units and packing stations are built adjusted to the egg washing
regulations.
For them to stop washing is to throw away already made investments and
require new
ones. Even the Swedish wholesalers and retail sector and especially the
Swedish
Government and the National Food Administration are in favour of a cooling
system
including egg washing.
From the Swedish point of view the document VI/1801/96 based on a report
from the
Standing Veterinary Committee 18 June 1996, draft Commission Decision
amending
Decision 94/371/EC, laying down specific public health conditions for
the putting on the
market of certain types of eggs, of special interest. The National Food
Administration
comment this document as following: "It is a well known fact that
the freshness of
shell eggs is influenced not only by the duration of storage but also
by the temperature
during storage. In several of the Member States shell eggs are considered
as chilled
products. Sweden has more than 20 years of good hygienic experience of
chilling eggs
in combination with the time limit for sale as presented under option
1 whereby sale to
the consumer are set to 33 days if the storage temperature is below 16°C.
It is our
opinion in regard to public health issues that handling systems that can
reduce the
health risk for perishable foods, such as eggs, should be encouraged through
legislation.
The present proposal will aim at this".
Another interesting study is a CRAFT project supported by the EU Commission,
DG 12
(R & D) for development of equipment and methods for improvement of
egg quality.
As part of the project the Swedish Institute for Food and Biotechnology
(SIK) made a
study which shows that egg washing did not influence the air cell or Haugh
unit, the
Class A status and the durability of the eggs. Washing reduces the bacteria
on the
egg shell considerably, which is maintained to the end of the test of
42 days. Bacteria
did not penetrate the eggshells. The eggs stored in 10°C, washed and
unwashed,
maintained a good fresh quality throughout the whole testperiod of 42
days, while at
room temperature (22°C) the quality deteriorated rapidly for washed
as well as
unwashed eggs.
This standpoint is supported by other studies, as for instance C.J. Kim
at al showing that
higher temperature of egg storage multiplies Salmonella enteritidis in
eggs.
From the Swedish point of view the results from both the above mentioned
EU studies,
covering cooling system and length of the storage, should have been included
and
evaluated in the Regulation (EC) No 2295/2003. However, from the Swedish
standpoint
it is therefore of special interest that the Regulation says that refrigerated
eggs are
allowed to be delivered to the French overseas départements.
On the same way, as when it comes to washing of eggs, this is the first
time that
refrigeration is connected to number of days. This has also been a Swedish
standpoint
since long ago. Sweden has a low population density, very long distances
and a
cool-chain, e.g., exact the same reasons as behind the permission for
the French
overseas départements. Therefore Sweden ought to be allowed more
days before
sale date to the consumer.
It is important to stress that every country must be allowed to choose
their own system
according to the conditions in the country. Therefore, the most proper
way must be that any
new rules should be voluntary and never try to inforce anything not wanted
or needed in
another country.
Food safety/Poultry health
From the Swedish society as a whole there is an almost total movement
to have access to
foodstuff of animal origin which is practically free of salmonella, antibiotics,
residuals etc.
and as a whole a request for safe food produced under good welfare standards.
The quality
work has been going on for many years. For instance, already in 1960 a
voluntary control
program for salmonella was introduced for feed mills in Sweden. Since
many years there is
a compulsory salmonella and feed legislation, including the layer sector.
Further, The Swedish Egg and Poultry Association has created a very long-ranging
quality
programme for the Swedish egg industry from import of grandparent stock,
production and
packing to the end consumer.
Sweden is very worried about that the implementation of the zoonoses Directive
92/117EEC
is not enough far-reaching. Typical is when it comes to EU matters, the
outline of the
intensions of the new directive concerning control and of the regulation
concerning the
prevention of zoonoses is generally good. In the same way there are no
clear guidelines
for how the objects should be attained, neither is there any description
of how the
Commission will ensure the regulation is sufficient implemented in the
Member States.
The proposal will also distort fair trade.
All people involved in the egg sector in Sweden today
are fully convinced to keep our high
health standard and good salmonella situation. It would be very unwise
to throw away 45
years hard and costly work by importing salmonella infected animals and
products as the
long term work and efforts resulted in that very few flocks have been
found positive. For
Sweden it is vital to be able to maintain the exceptions and the additional
garantees which
is part of the EU Agreement for Sweden.
Outlook
The chick
placement barometer for the second half of 2005 shows that the placements
will be on the same level as the year before. The placements for the year
2005 is
forecasted to be somewhat higher than in 2004.
The voluntary longer intervals before new layers seem to have too little
effect.
The conclusion must be that the Swedish egg production capacity is too
big.
The voluntary earlier slaughtering has resulted in lower egg production/hatched
chicken from
middle of 2004 and onwards. Larger decrease so far during 2005 and especially
from May.
The earlier slaughtering
Without voluntary longer intervals before new layers and furthermore earlier
slaughtering
the production and thus the surplus had been much bigger for the second
half of 2005.
Lower surplus ought to lead to higher egg prices for all production systems
during the
second half of 2005.
The egg/feed price ratio is expected to show a slight recovery during
the summer of 2005
and furthermore in the second half of 2005 as a combined effect of higher
egg prices and
lower feed price.
Marketing Information
For the first time in several years the Swedish Egg and Poultry Association
is running two
extensive programmes to promote egg consumption, namely
1) Egg marking (ads, folders – 40% of the budget)
These two
extensive programmes have created a lot of interest. The billboards have
been
seen all over Sweden during the past summer. Furthermore, the campaign
has been
followed up in TV, radio, journals, newspapers etc. All over eggs are
emphasized as an
excellent food with good value and very healthy
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