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Poultry consumption rebounds in Spain after Asian flu scare

By Ahmed Elamin , 19-Dec-2005

A survey of the effects of bird flu on the Spanish poultry market demonstrates the complex interplay between government intervention, consumer concerns and industry reaction to a disease that has the potential to cripple the sector.

A US department of agriculture (USDA) report finds that the Spanish government's efforts to allay consumer fears, a reduction in poultry-meat prices, and consumer loyalty may have mitigated the potential for a medium-to-long-term consumption downturn.

 

The Spanish government stated on 1 December that poultry consumption had rebounded in November to top that of the previous year. The government reported that poultry meat consumption was up 13 per cent in the third week of November over the same week in 2004.

 

The press release attributed some of the increase in consumption to the effects of a large governmental public information campaign, in place during all of last month, citing the safety of Spanish poultry meat. Government's efforts included the production of 150,000 pamphlets distributed to farmers and processors identifying how to recognize the avian flu in a poultry flock.

 

The rebound follows a downturn in consumption in some EU countries in October after consumers reacted negatively to the discovery that the H5 form of the virus, had been found within the bloc's borders. H5, which can affect humans in contact with feces or blood from infected birds, was identified in a turkey from the Aegean island of Oinoussa.

 

In Spain, the bird flu scare has resulted in a short-lived reduction in poultry meat consumption during late October and early November, the USDA reported.

 

Even in the face of the increase Spanish poultry producers and processors claim that the bird flu scare has resulted in lower-than-traditional prices, and are calling on government to provide compensation payments, the USDA reported. The association claims that poultry prices are about €0.50 per kilogram below the cost of production.

 

"If the Spanish government does not adopt measures to support the poultry industry this week, there will be a total and complete collapse of the industry, including the closure of many slaughterhouses, farms and a loss of jobs," the Spanish poultry association said in a statement.

 

Data from the Spanish Ministry of Agriculture indicates that the current poultry price is about 33 per cent below the price at this same time last year, while only slightly below the 2003 price, the USDA report noted.

 

In the EU poultry consumption overtook beef and veal in 1996, when BSE hit the headlines. Pork holds the number one position in the EU and could gain from the current crisis hitting the poultry industry.

 

The EU produces about 11m tonnes of poultry meat annually, of which chicken accounts for 70 per cent of the total, turkey 20 per cent and ducks four per cent. The EU exports about 1.1m tonnes a year.

 

Poultry production gradually recovered in 2004 after the outbreak of avian flu in the Netherlands during spring 2003. The outbreak reduced EU production by about two per cent. Production in 2004 was slightly less than in 2003.

 

The outbreak of the milder H5N7 form of the virus in the Netherlands in 2003 gives some idea of potential losses. The country was Europe's biggest poultry producer at the time with more than 100 million chickens. About 30 million had to be destroyed at a direct cost of €150 million. The Dutch Agricultural Research Institute estimates that total costs for the Dutch farm sector, including related industries, at €500 million.

 

Asian flu first appeared in wild birds and poultry in Asia. The ongoing outbreak in Asia has so far led to the destruction of more than 125 million birds, the death of around 60 people and economic losses estimated at €8 to €12 billion, according to AVEC, the EU's association for poultry processors.

 

In Europe the reduced import supply pressures from Asian markets led to European poultry prices rising, which was also boosted by high feed grain costs last year.

 

In August 2005 the threat of a new outbreak in the EU became more present after the high pathogenic H5N1 strain spread into the Ukraine and more than 10.000 birds had to be destroyed.

 

With reports about the increasing advance of avian flu westwards from Asia during August, September and October, demand for poultry products had fallen by between 30 per cent to 40 per cent in Italy, with lesser falls occurring in other countries said Cees Vermeeren, AVEC's Brussels representative.

 

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