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New animal welfare regulations in Europe set to affect Brazil poultry industry

Jun, 24, 2024 Posted by Gabriel Malheiros

Week 202426

Companies alongside over 30 non-governmental organizations within the European Union (EU) have jointly developed a comprehensive set of animal welfare regulations aimed at revolutionizing local chicken production by 2026. This initiative, known as the European Chicken Commitment (ECC), could potentially reshape the entire production landscape, with an estimated industry-wide adaptation cost exceeding 8 billion euros, impacting global trade patterns, of which Brazil is a significant player.

While the ECC isn’t legally binding, it has garnered support from more than 300 food companies across the EU, including major retail chains. These entities may opt to discontinue purchasing products that don’t meet ECC standards or prioritize those that do.

The European Association of Poultry Processors and Traders (Avec), representing the European poultry industry, anticipates a surge in local meat prices and a substantial increase in imports if the entire production chain is required to comply with ECC standards.

Opportunities and Challenges for Brazil

In this evolving landscape, countries like Brazil, Ukraine, and Thailand stand to enhance their competitiveness within the EU market. However, navigating these changes isn’t straightforward, as ECC compliance could also pose challenges for exporters.

Ricardo Santin, president of the International Poultry Council (IPC) and the Brazilian Animal Protein Association (ABPA), emphasized the importance of ensuring that ECC standards don’t inadvertently become trade barriers. While current ECC guidelines don’t mandate changes to the production systems of exporting countries, there’s a possibility that future requirements may demand equivalence in production standards, potentially hindering market access due to the associated costs of adaptation.

Advocates of the ECC, such as Compassion in World Farming, assert that chickens possess sentience and exhibit a range of emotional responses, underscoring the imperative to reform current poultry farming practices.

Key ECC Requirements

The ECC mandates various measures to improve animal welfare, including reducing maximum stocking densities to 30 kilos per square meter, using slower-growing breeds, providing ample space and cage-free environments, transitioning to gas or electric stunning methods during slaughter, and adhering to existing animal welfare legislation within the EU.

Conversely, Avec released a study projecting a 37.5% increase in production costs per kilo of meat, along with a 35.4% surge in water consumption, equivalent to an additional 12.44 million cubic meters annually, and a 35.5% uptick in feed consumption.

Additionally, the study forecasts a 24.4% rise in greenhouse gas emissions per kilogram of meat produced, a 44% reduction in meat production, and the necessity to construct 9,692 new poultry houses, estimated at 8.24 billion euros, to sustain current chicken production levels.

“We do not want to change the ECC; we accept the conditions as long as they are not imposed on all production. We believe it may represent a new segment, but conventional production should still be permitted,” stated Avec General Secretary Birthe Steenberg in an interview.

Brazilian exporters can sell up to 124,500 tons of salted chicken to Europeans within the quota, subject to a 15.4% “ad valorem” rate, akin to cargo insurance. However, exceeding this volume requires an additional payment of a 1,300 euros per ton tariff, potentially diminishing profitability depending on product prices.

The chart below used DataLiner data powered by Datamar to show exports of poultry meat from Brazil to the EU between January 2021 and April 2024.

Poultry Meat Exports to Europe | Jan 2021 – Apr 2024 | TEUs

Source: DataLiner (click here to request a demo)

Between January and May this year, Brazil exported 87.9 thousand tons of chicken to the European Union, marking a 13.6% decline compared to the same period last year. Meanwhile, Ukraine has increased its exports to the European bloc, while Brazilian exporters have redirected larger volumes towards Gulf countries and Saudi Arabia.

Source: Globo Rural

Click here to read the original news piece: https://globorural.globo.com/pecuaria/aves/noticia/2024/06/novas-regras-de-bem-estar-na-producao-de-frangos-na-europa-vao-afetar-o-brasil.ghtml

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