October 7, 2014

Chicken meat production in the EU will increase during the remainder of 2014 and in 2015 despite two major French producers declaring bankruptcy.  Combined EU chicken meat production will reach 10.07 million tons this year – a jump of 1.7% over 2013 production according to U.S. Department of Agriculture (USDA) officials.  This increase is forecast despite the industry in France, which holds a 10% share of total EU output, facing hurdles following the elimination of an export subsidy program last year which cut into volumes to the U.S., the United Arab Emirates, and Yemen.  Officials made note that due to animal welfare restrictions, chicken production costs in the EU are 25% higher than in Brazil and 30% higher than in Thailand, and also higher than in the U.S., but French costs are even higher at 13% above production costs of Germany and the Netherlands.  These conditions have been the underlying causes for the French Doux poultry company to file for bankruptcy two years ago and for a second major producer, Tilly Sabaco, to file for bankruptcy two weeks ago as a French court gave the company two months to find a buyer.  EU chicken meat exports are forecast in the USDA report to be 1.05 million tons, indicating a minimal decline of 20,000 tons due to Russia’s ban on imports.

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