By Tony Goodger, policy director, AIMS
Ah the 1960s, all flower power, free love and the Age of Aquarius.
I remember the moon landing however, the “Chicken War,” passed me by.
The “Chicken War”?
In short, this was an economic skirmish between the US and Europe whereby imports from the former were pricing the latter out of the market. Tariffs were introduced by the Europeans and in retaliation, the US imposed 25% tariffs on light trucks, potato starch, and brandy.
The recent report by the Committee on Climate Change included this sentence, “But food is highly political; and for every single potential intervention, there will be winners and losers”.
According to the “Ukraine – Open for Business” website exports last year of poultry meat were valued at almost $1 billion with the Netherlands, followed by Saudi Arabia and then Slovakia.
In addition, they also exported 77.8 thousand tons of eggs with the top 3 buyers listed as Israel, Poland and Italy.
It goes without saying that the Ukrainian farmers have my sympathy during the current conflict.
However, at the end of 2024, and after 25 years of negotiations, the European Union signed a free trade agreement with the Southern Common Market group of four South American countries; Argentina, Brazil, Paraguay and Uruguay, also known as Mercosur.
Under the terms of the deal, the EU will allow the importation of up to 180,000 tonnes of poultry duty-free.
Currently, 25% of the breast meat consumed in the EU comes from non-EU countries, including Brazil and, given their cost advantage over EU poultry producers the agreement is expected to flood the EU market with a substantial volume of chicken breasts.
According to commodities analysts, Expana, their market sources suggest that for every two fillets imported, one chicken raised within the EU will be displaced.
And yet, the European Commission appears to be glossing over that threat publishing a fact sheet for farmers in which they suggest that the agreement will boost “EU exports by removing high tariffs for main EU export products” while granting very limited access to the EU market for sensitive agri-food products” such as poultry.
Of course, European farmers carry a far larger amount of political sway than their counterparts do here in the UK. Afterall, the largest party in in the upper chamber of the Netherlands parliament is The Farmer’s Party.
Our government’s most recent set of agri-trade numbers, published in December 2024 and which detail the 12 months to September 2024 show that the value of our poultry exports to the EU was £255.6million (up 12.2%) and in volume terms 191.3 thousand tonners (up 21%).
And while over the same period we reduced our imports of EU poultry by 4.3% (£2.3billion) and 0.5% in volume (684.8 thousand tonnes) it is probably safe to assume that with significant quantities free-trade chicken coming into the Europe that is likely to be cheaper on the supermarket shelves than their domestic product that European farmers may either start a new “Chicken War” or look to the UK’s supermarkets, meal manufacturers or foodservice operators for their lower than UK priced poultry.
UK poultry farmers will also be likely to see a reduction in EU demand.
Chicken is highly political and, in my view, the winners will be the Brazilians and EU and possibly UK consumers paying lower prices at the till whilst the losers are, I am sorry to say, will be UK poultry farmers.