Agile poultry meat sector meets its challenges
During its 13 years of existence the International Poultry Council’s voice grew stronger and stronger. During its annual first semester conference in the Netherlands the poultry meat industry platform reflected on past, current and future challenges, ranging from avian influenza and antibiotic resistance, to trade difficulties and halal certification.
The IPC’s president Jim Sumner acknowledged in his opening statements that his organisation has come a long way since its beginning in 2005. ‘’There is no major discussion platform where we are not heard in the field of international rules and regulations setting. We represent 78% of worldwide poultry production and are here to promote poultry as the main protein source and are able to bring across that we are a key player in feeding the world, sustainably and with safe food. Furthermore, we provide objective information on trade and help individual countries to resolve their issues.” Sumner emphasised that this is ‘constant work in progress’ as the world is changing continuously and challenges are everywhere.
The challenges posed to the poultry industry were put forward by a number of highly renowned speakers. Dr Matthew Stone, deputy director international standards of the OIE stated that the current avian influenza situation is tremendously complex. During 2017-2018, 33% of all the countries in the world faced problems with highly pathogenic AI, with an epidemiological situation that is very complex. Stone adds: ‘’We went from a situation in which three AI subtypes were endemic to a situation with 16 endemic subtypes. That seems to be the new normal.” Adjusting to this new normal is a matter of understanding the dynamics of the disease and a rational approach, which can even incorporate vaccination as a possible policy option in risk management, according to Stone.
Uncertain times
Unfortunately there are more uncertainties than AI alone, so much was made clear by Justin Sherrard, global animal protein strategist at Rabobank. ‘’The industry is in good shape, but it needs to be aware of the changes that are going on, which are there in greater number than usual.” He shared three main swing factors that could change its overall positive outlook of a year on year worldwide growth of 1,5%. ‘’Trade dynamics, the disease situation and consumer demand can disrupt the current upswing.” There is a potential for major trade shifts, for instance if the US as the biggest exporter is confronted with high tariffs from the largest importer China. ‘’In essence this has nothing to do with supply and demand, but with geo-politics. However, this is a clear and present danger. The US-China trade tension will affect the whole world.” Furthermore, Sherrard sees consumer confidence growing. ‘’Unfortunately this is not all good news for the poultry industry.
Consumer confidence is good for red meat, and for the premium part of the poultry market. Beef and pork production tap into this trend and will grow 5%. With more meat out there, there will be pressure on price. Luckily the poultry industry with its short production cycles is far more agile than the red meat sector.” However, the largest disruptive movement by far is the upcoming consumer question ‘what is protein?’. Nowadays and in the future protein is no longer just meat. ‘’It can be vegetable protein as well and that brings us to one shortfall of the poultry industry; marketing wise we are on the back foot. All these plant protein initiatives have great marketing, but do we question ourselves enough on what people will think if we open our doors to our production?”
Chicken of tomorrow
The question posed by Sherrard is at the forefront in the country that has been hosting this IPC conference for years now. In the Netherlands nearly all poultry meat sold in the supermarkets changed from standard poultry production to slow growing production in the period 2015-2017. Over 30% of national production is now of the slower growing kind, often referred to as the Chicken of Tomorrow, the rest of production is exported. The Netherlands is leading the way in how society looks at the poultry industry and is not afraid to show it.
That said, there are some potential conflicts in the slower growing concepts. Or as Gert Jan Oplaat of the Dutch poultry processing organisation Nepluvi stated: ‘’The demand for food is huge, in the coming 33 years we have to produce more food that has been produced in the past 4000 years. We need every ounce of efficiency we can get.” And that is exactly where the Chicken of Tomorrow falls short. Dr Aalt Dijkhuizen, president of the Dutch topsector Agri & Food presented the Chicken of Tomorrows business case: ‘’From an economical point of view the business model is sound, at least in the small Dutch market. The extra costs, the loss of 20% efficiency are covered by price, which guarantees the producers incomes. Also, it caters to the demand of the supermarkets. They were under heavy pressure by NGO’s and animal rights activists and that all went away when they made the switch to slower growing concepts. It is a solution for markets with high societal demands, however, on a worldwide scale we cannot afford to lose 20% on efficiency. There isn’t enough chicken feed to go around in such a situation.”
Halal production
If the Chicken of Tomorrow makes one thing clear is that every market has its own demands. The same goes for the market for Halal production in the Middle East. During 2017 IPC representatives were in intensive contact with the Emirates Standardization and Meteorology Authority after the United Arab Emirates sharpened its demands for Halal production. ‘’In 2016 we were notified that they would impose a ban on stunning and mechanical slaughter for imported poultry products,” said IPC’s general secretary Marilia Campos.
According to Campos it took a lot of effort to convince the parties involved that stunning is necessary for quality and animal welfare. ‘’We actively showed the regulators in the UAE how our industry does things and why. Also we convinced them that stunning is reversible, showing that the birds are still alive during slaughter, which is essential to Halal rules.” The IPC has good hopes that the UAE will re-evaluate their earlier position officially. Campos: ‘’That said, as per 1st of May Saudi Arabia won’t allow shipments of poultry meat which was stunned before slaughter anymore. With the huge stakes in the Islamic economy involved, this will be our next focus. Luckily the IPC’s involvement was able to make a difference in the case of the UAE, hopefully we can do the same in Saudi Arabia.”
Campos added: ‘’We do recognise that even within our own organisation we have companies that don’t stun in accordance with Halal rules. That is good as well, as they are aware that Islamic consumers are getting more and more conscious concerning Halal production. On the other hand, with the utmost respect for Halal rules and regulations, we have to look for possibilities to ensure the consumers in the Middle East have access to good, safe and plentiful poultry meat.”
