21/02/2023
Mr. Alfredo Acebedo Silva from Avícola el Guamito – Colombia, was in charge of the presentation on “Analysis of egg production in Latin America” during the LPN Congress 2018.
Today the concern for maintaining a balanced and healthy diet is on the rise, leading consumers to include diets rich in foods that provide nutritional components that improve their health and well-being, including eggs within these.
Introduction
The egg is a product that, although it is small at first glance, is great in nutritional values within which its protein content is added; Additionally, since it is priced lower than other proteins, it is affordable for all socioeconomic levels and contributes to the food security of vulnerable populations.
The worldwide poultry industry is aware that not all consumers know what consuming eggs daily can do for them. For this reason, campaigns to promote consumption have been developed in many countries for several years, mainly based on education on the nutritional benefits of the egg beyond the protein content.
In Colombia, through the National Federation of Poultry Farmers (FENAVI), this commitment to teaching the value of the egg is addressed from different stages of life, such as pregnant mothers, growing children, students, workers, and adults with restrictions on your diet.
Thanks to its competitive price and the campaigns to strengthen egg consumption, which seek to promote a healthy and nutritious diet, there has been an increase in per capita egg consumption worldwide in the last eight years. For example, according to the information reported to the International Egg Commission by its member countries, Latin America’s compound growth rate (CAGR) is 3.4% on average, which is higher than the average for this same indicator in European countries, shown in Graph 1.
In Graph 1, the countries are ordered from highest to lowest per capita consumption in Europe, North America, and Latin America, reading the information from left to right. Among the countries in the graph, Mexico and Russia reported the highest per capita consumption in 2016, with 371 and 295 egg units per year, respectively. They are followed by Argentina, the United States, and Colombia, with more than 250 units of eggs consumed per person in the same period. This simple ranking shows that the top 5 countries with the highest egg consumption comprise 3 Latin American countries.
Specifically in Colombia, per capita consumption in the last nine years has increased at a CAGR rate of 3.3%, reaching 279 units in 2017 (compared to Graph 1, this second graph includes the year 2017), and the percentage of people who consume eggs daily reached 49% in 2017. These results are due to the effort to teach the Colombian population, among the most relevant nutrients, the content of the egg’s vitamins, minerals, choline, and protein (9 amino acids).
In 2017, the egg industry in Colombia had the highest growth in the last nine years, both from supply and demand. From the supply perspective, various factors have increased productivity, such as genetic advances, the historical behavior of production costs, and the favorable sanitary conditions inside and around farms. All these factors have been decisive in guaranteeing egg availability at all socioeconomic levels. In summary, nesting grew by 7.5%, and egg production by 7.9% in 2017.
On the other hand, there is demand, which has been mainly encouraged by the price. For example, in the last 18 years, the cost of eggs has increased 91% in nominal terms, going from $140 in the year 2000 to $268 in 2017, an indicator that is not insignificant and seems to indicate that the egg is an inelastic good when adding the increase in consumption; however, in real terms (that is, deflated) the price of the egg has decreased -14%, going from $140 to $120 in the same period. This means that, in reality, with the same minimum wage earned 18 years ago, you can buy more eggs.
Considering the above, although the growing supply of eggs has created its own demand and it has been shown to be an expanding market, the price has encouraged this behavior and has become a business sustainability challenge not only in Colombia but in other countries as well.
Maintaining competitiveness and profit margins has not been easy; it is not only about protecting the economic results of companies from the point of view of rural development in the country. It is also about guaranteeing the product’s affordability and safeguarding food safety.
Until 1950, the production per bird in Colombia was 100 eggs per year, without scientific and industrial technology, a lack of sanitary controls, and an unbalanced diet with the bird in mind. It was not until 1960 that semi-confinement systems were implemented, the first incubator companies and specialized concentrate companies were created, and health conditions began to be improved with preventive vaccination plans.
Currently, productivity per bird has increased by 2.5 times. In addition, production costs have had favorable periods for the industry, resulting from the decisions made regarding strategic alliances with the leading suppliers throughout the industrial production chain, thus achieving better efficiency of technological modernization, such as controlled environments in the poultry houses, automatic feeders, egg graders; also from the knowledge acquired by listening to what the consumer wants and from the concern to maintain an adequate sanitary environment, based on the design of management plans adjusted to the great variety of production systems that currently exist and which continue to evolve to convert biosafety and environmental management into allies that allow us to offer a product suitable for human consumption.
In the near future, a stage of adaptation awaits poultry companies again, in the growing trend of seeking environmental sustainability and animal health while maintaining productivity without undermining food security.
Definitely, a challenge that will imply new investments with long-term rates of return, margin adjustment, and market segmentation, but it will undoubtedly be another outstanding achievement of the formal poultry industry. Moreover, it will boost the environment of this agricultural sub-sector.
For this reason, entrepreneurs must explore new alternatives that allow them to make the most of the comparative and competitive advantages of the industry, such as geographic location, sources of supply of raw materials, Know-how, labor productivity, and technological updating; that help to reduce or be able to react in time to the risks of poultry farming, such as climate change that alters production conditions, increased probability of new diseases that put mortality at risk, substantially altering the performance of the business; There are plenty of reasons to be passionate and focus on the development of sustainable production models.
A path that must be followed hand in hand with union-management; understanding that government policies and actions influence this business, it is vital to work together to obtain the best conditions for production.
From these associations, many efforts can be made on the political front, staying close to the high command of the government, informing them and updating them about the economic and social magnitude of the poultry sector, and always seeking optimal conditions for the productivity of the industry.
Another critical point of unionizing is taking steps against free trade agreements that provide real opportunities for the industry’s improvement, use, and progress.
This effort to make the Poultry sector sustainable in the medium and long term leads to visualizing an alternative and more “sophisticated” path that can be directed to the production of egg derivatives, known as egg products, for example, pasteurized, powdered, liquid or frozen, since these are easier to store and better exchange worldwide. These products result from innovation in the processing of fresh eggs, which serve the industry to provide consumers with added value to a traditional product such as table eggs while maintaining quality standards and food safety.
