EGG ORGANISATION COMMITTEE CHAIRPERSON S REPORT 2017
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1 EGG ORGANISATION COMMITTEE CHAIRPERSON S REPORT 2017 PRESENTED BY WILLIE BOSOGA Small footprint. Big Impact
2 Good start to the year INTRODUCTION Decent rain, bumper maize crop, lower feed prices HPAI outbreak confirmed in June Egg industry hardest hit 4.69 million layers culled DAFF-appointed assignees to do health inspections on farms This will place extra burden on producers
3 INTRODUCTION (continued) Dutch University of Wageningen doing a global competitiveness study Local data being collected by BFAP Producers are encouraged to take part
4 OBJECTIVES To establish and maintain an organisation in SA for the promotion, development and guidance of the commercial egg industry as an independent subsidiary branch of SAPA, equal in status to that accorded other subsidiary branches of the poultry industry.
5 STATS SA: R17.13/doz 2017 STATISTICS: Egg prices Price doesn t take all rebates into account Annual increase +11.7% SAPA: R14.99/doz Annual increase +16.7% STATS SA retail price R26.04/doz large eggs 60% markup
6 How prices differ in the provinces 46 Retail price per 18-egg tray (October 2017) 44 43,43 42,66 Price (rand) ,48 40,80 40,32 38,58 38,21 36,23 35, Mpumal. W Cape Gauteng N West E Cape Limpopo N Cape Free State KZN
7 Protein price comparison Eggs still the cheapest
8 Day-old pullets 2017 annual increase: 1.2% culled due to HPAI in July Day-old pullets (millions) 25,0 24,8 24,6 24,4 24,2 24,0 23,8 23,6 23,4 23,87 Day-old pullets placed 24,43 24,90 24,02 24,30 23,
9 Layer flock 2017 annual decrease: 6.6% 4.69 million hens died or culled due to HPAI Hens (millions) 25,5 25,0 24,5 24,0 23,5 23,0 22,5 22,0 21,5 Average layers per annum 24,85 24,80 24,55 24,34 23,
10 Cases of eggs 2017 annual decrease: 7.1% Dropped 15% from May to Oct Cases (thousands) Average weekly cases of eggs
11 Change in volumes and producer price v. previous year % Change Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 % Change in cases % Change in producer price PPI deflated price
12 PPI eggs lagged behind until AI shortages Trends in PPI and CPI (base = Dec 2016) Index Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 PPI PPI eggs CPI CPI food, non-alcoholic beverages
13 Prospects for 2018 First 4 months of 2018, compared to same period in 2017: Number of point-of-lay pullets to decrease by 2.5% Size of laying flock to decrease by 8.3% Egg production to decrease by 8.1%
14 Gross value at producer level Gross turnover R10.77 billion 4th largest animal product sector, after poultry meat, beef, milk +5.6% compared to 2016 Share of gross value of animal products: 7.9% Share of all agricultural production:3.9%
15 Feed price and volume Feed price decreased 15% in 2017 AFMA s layer feed sales decreased 6.9% R/tonne Layer feed price Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Feed price Yearly average
16 Per capita consumption Eggs per annum Per capita egg consumption Dropped by 9.4% in 2017 Due to reduced volume and increased price
17 Small commercial farmers Continue to provide detailed statistics Pullet rearing: 12.1% increase in volumes 19.3% increase in selling price Layers: Using 46% of capacity of facilities Egg sales 3 million dozen Average price R13.98/doz (+6.1%) Turnover R41.6 million
18 Feed: Small commercial farmers (continued) Total value R26.5 million Bagged feed price decreased by about 5% in (Depots not passing on benefit of lower prices?) Cull hens: Average selling price R36.41
19 TRADE - Exports tonnes of eggs for consumption +56% compared to tonnes of fertile eggs -59% compared to 2016 Value of exports R306 million Main destination was Mozambique (78% of total exports)
20 TRADE - Imports 484 tonnes of shell eggs and egg products +124% compared to 2016 Mostly dried egg product Value of imports R39.5 million (+47%) Main country of origin: Italy (45%)
21 GLOBAL EGG INDUSTRY Top egg-eating nation in 2016 was Mexico, at 371 eggs per capita (source: IEC) Major health scare: fipronil, a banned insecticide, was found in eggs in 40 countries Container of contaminated egg powder destroyed in Durban harbour Severe HPAI outbreaks in northern hemisphere in winter 2016/17 Highly contagious strain H5N8 Reached Zimbabwe on 2 June
22 AI IN SOUTH AFRICA First case: 19 June on broiler breeder farm DAFF banned live bird sales Second case: 26 June on a layer farm, Mpumalanga Neighbouring countries suspended trade Ban on live bird sales lifted, but movement restricted Cull bird traders to register with PDMA Vets to certify birds disease-free PDMA developed database
23 AI IN SOUTH AFRICA (continued) Calls for vaccination to be made available Despite biosecurity, HPAI spread rapidly to other provinces W. Cape severely affected 70% of hens died or culled 3.7 million eggs a day taken out of market DAFF to compensate farmers for culling of uninfected birds only
24 ANIMAL WELFARE Nestle and McDonalds SA to phase out cage eggs SPCA cracked down on live bird sellers for condition that cull hens are kept in SAPA s revised code of practice raised concern about proposed 550 cm 2 cage space per bird OIE s global layer welfare standards available for comment
25 EMPLOYMENT workers, 678 supervisors, 391 managers Total employees: Estimated 505 lost jobs (-6.3% compared to 2016)
26 MARKETING World Egg Day celebrated on 13 October Many overseas countries organised sporting and funfilled events We are missing an opportunity to promote egg consumption
27 GALLIOVA AWARDS Held at Landtscap in Stellenbosch on 20 October Theme: Local is lekker Chicken dishes featured in 2017 for first time
28 INTERACTION WITH GOVERNMENT Agricultural Product Standards Act: New regulations came into effect on 15 April 2017 To do with grading, packing and marking of egg DAFF appointed Agency for Food Safety and Quality to inspect egg production and packing units Producers unhappy with proposed fee Agreed on R per dozen eggs packed or produced
29 FUNDING MODEL Dwindling membership caused funding problems for the EO SAPA applied to NAMC for statutory levy Support of producers of 66% of eggs needed After HPAI outbreak, producers agreed to stand together Revised application to NAMC: Levy of 1.5c/doz sold to trade May take 6-18 months
30 SUCCESSES Following HPAI outbreak, producers rose to the challenge Producers, SAPA, PDMA, government officials, private and state vets pulled together Close working relationship established with government Media helped to educate public Producers unaffected by AI made good profits
31 CHALLENGES Containing the spread of H5N8 virus Stepping up biosecurity on all farms Registering cull hen traders with the PDMA Getting compensation from government Dealing with shortages of eggs, day-old pullets and point-of-lay hens Finding a way to work with the DAFF-appointed assignee s food safety inspectors
32 CHALLENGES (continued) Convincing egg producers to join SAPA Funding the EO Getting historically disadvantaged producers into the value chain Increasing participation in BFAP s global competitiveness study Changing mind-sets on cage stocking densities
33 FUTURE PROSPECTS The likely recurrence of HPAI outbreaks in winter Increased spending on biosecurity infrastructure Restocking farms after quarantine ends Low-interest loans for those recovering from HPAI Working closely with government Reaching consensus on ways to transform the industry The introduction of a statutory levy to fund the EO
34 FUTURE PROSPECTS (continued) A dire shortage of water in the W. Cape Reducing cage stocking densities The growing demand for cage-free eggs Using World Egg Day to promote egg consumption BFAP publications: International competitiveness of our egg industry Economic impact of HPAI on the industry
35 CONCLUSIONS Egg industry recovering from a turbulent year Very real threat of a recurrence of HPAI outbreaks We need to pull together as producers, and focus on stringent biosecurity Otherwise we face farm closures, job losses, egg shortages, retail price increases
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