Meat Packing Journal, Jan-Feb 2019, iss 1, vol 6

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January~February 2019 Volume 6, issue 1 ISSN 2054-4685

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Landmark case in March court

W

hile I don't find the vegan movement worrisome, what does is the absolute, no-questions-asked attitude of the media towards it.

Let me explain.

First there was Dry January, a movement whose goal is

to get people to stay off the booze for a month. This was followed with Veganuary, started by a charity of the same name that wants folks around the world to go vegan for a month. They claim this year a quarter million people around the world have taken the pledge and it's a wild success. A course, with the world population expected to be 7.7 billion this year, the pledgees represent 0.00324% of the population. Not too wildly successful in my way of thinking, but who am I to argue with a vegan.

Also, this January has seen the start Januhairy – a

combination of whistleblowing and discrimination.

Casamitjana says that he sees himself as an “ethical vegan,” for him it’s about caring not only for his health, but for animals and the environment as well. His plant-based

movement to get women not to shave, pluck, wax, or

diet has therefore blown into a full-scale belief which, he

yank any body hair for a month. Founder Laura Jackson,

says, “affects every single aspect of my life”.

21, said this is an attempt to challenge opinions that women should be hairless and blames much on Disney, whose characters Cinderella and Snow White don’t

Now a court will assess whether veganism can be a philosophical belief and thus be protected by law.

The League has denied allegations that they fired him

have body hair, so in a sense, brainwashing young girls

for being vegan or for whistleblowing, and say he was

regarding hair – I only wish I was making this up.

given the sack because of gross misconduct. “To link his

With teetotalers, vegans, and hairy women all famed for not having a sense of humor, be it not for me to make any snide remarks or imply in the least that there is a

dismissal with issues pertaining to veganism is factually wrong,” the firm says in a statement to the BBC. Ethical veganism means someone is vegan for

strong connection between all three groups. One food

ethical reasons – not just for dietary reason or allergies,

magazine editor in the UK was recently fired for making

Casamitjana tells radio host Kate Hawkesby.

a joke about vegans. Nor will I not question why these

“I use this term ethical vegan to distinguish between

events are happening in the dead of winter – when

people that just have a vegan diet and not have any

people cover their bodies with layers of clothes and stay

beliefs associated with it, such as people who are vegan

at home – and not in July.

just for health reasons. But many other vegans, who are

But I am questioning this: why do stories like this get so much media attention? As vegans themselves have pointed out to me, they represented only a tiny

vegan for ethical reason, these are the type we would want protected,” he says.

So, would hamburger ads on TV be banned because

percentage of the population. In the USA, around 3.3

ethical vegans are offended by them? Would airlines only

percent of the population follows a vegan diet – no meat,

be allowed to serve vegan meals? Will supermarkets

eggs, dairy, or seafood – and I’ve been told that this

need to keep meat hidden from view?

actual figure is more like two percent.. The truth is, it’s a

You laugh that this could happen, but it already

hard figure to assess since it’s not declared on census

is. On El Al flights from Israel to NYC, ultra-orthodox

polls or treated like a religion. But hold it, is this about to

Jewish men have held up flights until women have been

change?

moved from seats next to them for ethical reasons. In

Should veganism be treated as a religion? This is what

the USA, the Trump administration is expected to soon

a UK court will assess this March, after a man claims he

issue regulations that would expand religious and moral

was fired for being a vegan.

exemptions for covering birth control in employer health

Jordi Casamitjana says he was sacked by League Against Cruel Sports after he blew the whistle on

insurance plans. In other words, my religious views have now become yours.

the animal welfare charity investing pension funds in

We can only hope that the UK courts throw this out

companies that carried out animal testing. The man

without a second glance. If it does pass, I shake my head

claims he went on to tell fellow employees about the

at the thought.

investments, and that he was given the boot over a

meatpacking.info

Velo Mitrovich, Editor

January~February 2019

3

co ntac t s

contacts Velo Mitrovich Editor velo@rebymedia.com +44 (0)1442 780 591 Ryan Horwood Head of sales ryan@rebymedia.com +44 (0)1442 780 593 Josh Henderson Sales executive josh@rebymedia.com +44 (0)1442 780 594 Jon Young Publisher jon@rebymedia.com Reby Media 42 Crouchfield, Hemel Hempstead, Herts, HP1 1PA, UK

SUBscriptions Meat Packing Journal is a bimonthly magazine mailed every January, March, May, July, September and November.

Subscriptions can be purchased for six or 12 issues. Prices for single issue subscriptions or back issues can be obtained by emailing: subscribe@meatpacking.info

International One year: $749 The content of Meat Packing Journal is subject to copyright.

However, if you would like to obtain copies of an article for marketing purposes high-quality reprints can be supplied to your specification. Please contact the advertising team for full details of this service. Meat Packing Journal is printed at Stephens & George, Merthyr Tydfil, UK.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system, without the express prior written consent of the publisher. Meat Packing Journal ISSN 2054-4677 is published bimonthly by Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Subscription records are maintained at Reby Media, 42 Crouchfield, Hemel Hempstead, Hertfordshire, HP1 1PA. Meat Packing Journal and its Editorial Board accept no responsibility for the accuracy of statements or opinion given within the Journal that is not the expressly designated opinion of the Journal or its Editorial Board. Those opinions expressed in areas other than editorial comment may not be taken as being the opinion of the Journal or its staff, and the aforementioned accept no responsibility or liability for actions that arise therefrom.

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January~February 2019

Meat Packing Journal

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contents 76

52 68

30

46

COVER: big chicken 20 -MPJ is presenting this month our largest poultry issue ever, looking at chicken's position on the world stage and then nine specific countries.

If your company is looking for the next Klondike, this is your issue!

world's first lab grown steak 7 - Although it looks as tasty as cardboard, it's sending shockwaves through the beef industry

tpp trade deal in effect

think twice before investing 30 - Although others say Turkey will be the next big thing, we tell you why it won't be

heavyweight in the making

12 - US agriculture is not happy, but Australian beef is ecstatic as traiffs start to fall in Pacific

39 - Despite some minor inconveniences like, oh, Russian troops, why we like the Ukraine

hundreds sick from ground beef

middle east gem

14 - In what is sounding like a broken record, salmonella outbreak causes massive recall

roc and japan like us pork 16 - You might already have the market but never rest on your laurels

secret of entrepreneurship 18 - Marketing columnist Elliot Begoun tells you what you need to join

feed holding thailand back 24 - Support for corn farmers means Thai chicken will only be a middleweight

meatpacking.info

44- How a tiny Arab state is standing up to regional bullies with homegrown poultry

rendering plant gear 52 - You've asked and we're giving you more. A look at Dupps and Haarslev

poland part ii 62 - We explain how Poland became Europe's chicken leader and where you can fit in

innovation 76 -Plastic tub primer and why male chicks will never need to be culled again

January~February 2019

5

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n e ws

China buys US soybeans I

n what must be good news for US farmers, China has agreed to buy soybeans from the States. The total

amount agreed on has yet to be released but already China booked nearly 2.5 million metric tons.

Considering the trade war that has been going on between China and the USA, while many would consider this a major success, some US soybean exporters were expecting much larger amounts after US president Donald Trump said China was buying a “tremendous amount” of soybeans.

The trade war has been affecting world feed prices as some soybean producing countries realized there was more to be made selling soybeans to China as opposed to local feed companies.

Last year China imported 31.7 million MT of US soybeans, about 60 percent of total US soybean export shipments.

World’s first lab-grown steak

T

about the possible impact that fake meat might someday have on the industry, it is worth noting that no company

he first ‘steak’ grown from cells in a lab and not

has yet produced a product that is ready to sell and all

requiring the slaughtering of a cow has been

companies are failing at meeting their own production

produced in Israel. According to Didier Toubia, the cofounder and CEO of Aleph Farms, the steak is at least three to four years away from commercial sale.

While lab-grown burgers and chicken nuggets have been produced and will probably be entering the commercial market this year, something that requires a muscle-like texture and ‘bite’ has proven to be a challenge.

The prototype would cost $50 for the small strip

deadlines.

Trucker shortage leads to higher grocery prices

T

he western world’s continuing shortage of long haul truck drivers – as reported in MPJ – is driving up food

prices.

John Kearney, CEO of St. Petersburg, Florida-based

produced. While this seems expensive, the first lab-grown

Advanced Training Systems (ATS), which makes virtual

burger cost 250,000 euros.

simulators for driver training, told the Wall Street Journal

During the taste test, the steak was first soaked in

that higher freight and ingredient costs were behind

teriyaki sauce, fried, and then covered in additional sauce

recent announcements by Mondelez, Hershey, Nestle,

and a few vegetables. It would seem in watching the test,

Unilever and Coca-Cola that they will need to hike prices

that a small strip of cardboard would have produced the

in 2019.

same taste result at a smidgen of the cost.

In the States, the US Department of Agriculture and

“They don’t really have any choice. The cost of shipping just keeps going up,” Kearney said in his report.

the Food & Drug Administration have agreed on how

“A major factor in this is the driver shortage. There just

to regulate lab grown meat. This has been one of the

aren’t enough people in the long-haul trucking workforce

hurdles for the fake meat industry to leap over.

to get all these loads delivered.”

The FDA will oversee the collection and differentiation

Dean Foods, Tyson Foods, Hormel Foods, Kellogg, and

of cells – when stem cells develop to specialized cells

US Foods have also cited escalating transportation costs

– while USDA would oversee production and labeling of

as a drain on earnings.

food products.

While many in the meat industry have been concerned

meatpacking.info

Australia and Europe are also seeing rises in food prices due to increased transportation costs.

January~February 2019

7

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World’s first high-bay container storing system

A

n international joint-venture formed by global trade enabler DP World and industrial engineering

specialists SMS group will revolutionize the way that containers are handled in ports. A new and intelligent storing system will be applied for the first time ever at Jebel Ali Terminal 4, in time for the Dubai Expo 2020 world fair.

This system will allow for more containers to be stored in the same space of land, while allowing for easier individual container retrieval.

The High Bay Storage system was originally developed by SMS group subsidiary AMOVA for round the clock handling of metal coils that weigh as much as 50 tons each in racks as high as 50 meters. AMOVA is the first company to transfer this proven technology to the port industry.

Instead of stacking containers directly on top of each other, which has been global standard practice for decades, the system places each container in an individual rack compartment. Containers are stored in an

the ability to shorten the time taken to load and unload

eleven-story rack, creating 200 percent more capacity

mega-ships by as much as 30 percent.

than a conventional container terminal, or creating the same capacity in less than a third of the space.

Thanks to the rack´s design, each container can be

Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, said: “DP World’s experience and expertise in moving cargo coupled with the technology of AMOVA

accessed without having to move another one, enabling

will ensure the system is remarkably efficient and relevant

100 percent utilization in a terminal yard. The system

for present and future operations. As a world first in our

brings big gains in speed, energy efficiency, better safety

industry we are tremendously excited by its potential and

and a major reduction in costs. Costs are further cut by

groundbreaking features.”

No hormones or antibiotics in vegan burger?

Impossible Burger back has been its used of plant-based heme (soy leghemoglobin) which gives the burger its ‘bleed’ and cooking color transition. Although meat

M

eat eaters have been left scratching their heads in

groups have complained about the use of the plant-

puzzlement at the announcement of Impossible

based heme and Impossible’s lack of testing, in July of

Foods new Impossible Burger recipe, wondering how or

last year the US Food & Drug Administration gave the

why a vegan burger could have hormones or antibiotics in

company a “no questions” letter which said the protein

it in the first place.

that carries the heme is “generally recognized as safe” or

The announcement, made at the recent Las Vegas

GRAS. Having GRAS approval means that you then don’t

International Consumer Electronics Show, stated that

have to conduct further testing due to ingredients having

Impossible’s recipe would have no gluten, hormones, or

been already deemed safe.

antibiotics. Its texture also aims to contain a meatier chew through the replacement of wheat protein with soy.

According to Forbes, J. Michael Melton, technical sales and culinary manager at Impossible Foods, said: “Ultimately it’s juicier, meatier, and beefier than before.

With Impossible now wanting to sell the uncooked burger directly to consumers, it will need to get a premarket FDA approval to use its key ingredient, the forementioned soy leghemoglobin, as a color additive.

While MPJ does not see lab-based meats as a

The versatility has improved as well. And [can be used] in

threat to the meat industry for years, Beyond Meat and

the same way that you would use any other ground meat

Impossible Foods burgers could very well be. Already

product.”

chefs are using Impossible Burgers as a source of “ground

Besides a poor flavor, the other thing holding

8

January~February 2019

beef” in vegan meals.

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NCC launches new broiler website

A

new website platform has debuted amidst new

the chicken on their menu was raised humanely and

survey data revealing chicken consumption out of

sustainably.

home is growing and consumers' desire more information about the chicken they buy and eat.

The National Chicken Council (NCC) says its recently

“Foodservice patrons are increasingly looking to operators to provide knowledgeable answers to their questions about the chicken they are eating out of home,”

launch website has been designed exclusively for

said Tom Super, spokesperson for the National Chicken

foodservice and culinary professionals to learn more

Council. “The website gives those in the foodservice

about how the chicken served to their patrons is raised

industry access to the facts and offers a closer look

and processed.

at conventional broiler chickens, their lives and the

The new Chicken Check in Foodservice website

steps that are taken along the way to help ensure that

provides information on how broiler chickens are raised

foodservice operators can serve chicken with confidence.

and produced in the US, including frequently asked

Knowing the basics and making staff aware of this

questions, a glossary of chicken labeling terms, and

resource during employee training can go a long way

additional resources.

toward ensuring that you satisfy customer curiosity.”

According to the 2018 US Chicken Consumption

The information for Chicken Check in Foodservice is provided by the NCC – the national, non-profit

Report: u 68% of consumers have eaten a chicken meal or

trade association representing US chicken producers.

snack from a foodservice establishment in the past two

NCC member companies include chicken producer/

weeks

processors, poultry distributors, and allied supplier

u 19% of consumers anticipate eating more chicken from foodservice establishments in the next 12 months u 89% of consumers want additional information about the chicken they buy and eat Increasingly, consumers are expecting chefs, cooks

firms. The new Chicken Check in Foodservice website is the next step in NCC’s ongoing mission to provide even deeper transparency around conventional chicken production. Earlier this year, NCC introduced a virtual reality (VR) video series, giving viewers a look at how

and front of house staff to be able to assure them that

chickens are raised and processed.

Will Brexit not be an exit?

of uncertainty. We have repeatedly said that a no deal sceanario would be catastrophic for farming, but political

I

n what has been one of the most confusing stories to

events today have created further doubt and uncertainty.."

cover in the UK, is now even more so, leaving great

More in the March issue of MPJ.

uncertainty in the UK's farming and food industries.

As MPJ goes to print, UK Prime Minister Theresa May's EU Withdrawl Agreement – nicknamed Brexit – was voted down by 432 MPs to 202.

Does this mean Brexit won't happen? Nobody knows, thanks in great part to politicans of all parties, including many of May's Conservatives, hedging their bets so what

More cheeseburgers needed

G

rill cooks need to be slapping on more slices of cheese on burgers if American is hoping to make a

dent in the biggest cheese stockpile in at least a century.

Weighing in at a massive 1.4 billion pounds, Americans

ever the final outcome ends up being, they won't be

are turning away from bland processed cheese, along

blamed for the disaster that follows.

with American cheddar, and eating instead a record 37

This last month, the BBC's lead political pundit shook his head when asked to explain all the options, saying that not only could he not, but nobody could.

The UK's National Farmers Union says that without a

pounds of natural or foreign cheeses last year.

American cheeses do not age well and as the cheese remains in cold storage, prices will tank even further.

In what could be good news for grinding companies,

deal, it will be "catastrophic" for the country's agricultural

milk prices have dropped by 40 percent since a peak in

sector, with all parts affected.

2014. According to the Wall Street Journal, more than 600

NFU President Minette Batters said: "It is absolutely unacceptable for agriculture to be left with this level

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January~February 2019

dairy farms have closed this last year in Wisconsin alone, forcing dairy farmers to sell their herds.

Meat Packing Journal

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Time to go hog wild?

The US/China war trade has been one of the most complicated things to report on in 2018, ranking right up there with Brexit.

MPJ takes a stab at the latest changes

According to Pan, in southern China, while prices stay high, there is still strong consumer preference for fresh meat rather than frozen meat. Frozen meat can be supplied from the north at present, so imported pork, which is frozen, cannot meet the market needs.

In northern China, Pan believes the storage of frozen

n October, Reuters reported that US pork sales to China

I

meat is at a high, as there is an oversupply of live hogs

are "not viable" after Beijing earlier imposed tariffs on

which cannot be transported, so these need to be

imports of American pork in a tit-for-tat exchange with

slaughtered in the region. The high storage levels are

the States. Smithfield Foods' chief executive said the

expected to take a few more months to lower, meaning

trade war between the world's two largest economies

limited additional imports will be needed before the end

threatened a nearly $500 million business for US hog

of the 90-day truce.

farmers.

In April 2018, China put a 25 percent import duty on

Rabobank’s view is that China will see a big drop in pork production in 2019, along with a drop in pork

most US pork items, retaliating against US tariffs on

consumption. How quickly and majorly production and

Chinese steel and aluminum products. Pork also was

consumption will drop is not certain. Given that the

included in a second round of tariffs introduced in July.

majority of production is based on fragmented, small

Pork went into cold storage in the USA, while other

farms, there is no complete picture of how many sows

world producers started lining up their approach into

have been culled due to disease, and more importantly,

China. As much as the US Department of Agriculture

slaughtered due to decisions to exit the industry.

thinks having a USDA stamp accounts for much on a

“But it is believed that very few farms are liquidating

piece of meat, price accounts for much more. A worry

sows at the moment, as the commonly shared view is that

in the States is if Australian, Brazilian, and EU pork

next year will see supply shortages and rising pork prices.

producers make strong inroads into China, could US pork

So all the farms, as long as they remain financially viable,

regain its place on the Chinese plate?

are trying every possible means to keep their sow herds,”

President Trump, who instituted the tariffs against China, had allocated over a billion dollars to buyback

said Pan. While the trade war is hitting US pork producers

products from US producers who were dependent on the

hard, the State’s third largest pork importer, Mexico, also

Chinese market. US pork was the largest beneficiary, with

slapped tariffs on US pork due to the US placing tariffs

a planned purchase worth $558 million. This pork will be

on Mexican steel going north. These might be eliminated

used for federal food assistance programs for the needy.

once the new trade deal between Mexico, the USA, and

But that was a long few months ago.

Canada is signed. In the meantime, countries like the UK

Now with a temporary trade truce in place, US pork will

have sent trade representatives to Mexico to drum up

begin going back into China. It’s just the amount that will be allowed in is the mystery, according to Chenjun Pan,

business.

Throughout all of this, however, there are those who

senior analyst, for RaboResearch. “We expect some US

are benefitting. US restaurant chains Olive Garden,

pork imports into China, but there is uncertainty around

Applebee’s, Texas Roadhouses, and even McDonald’s are

how much will be imported, due to weak demand,” she

paying a lot less for pork, which in turn has allowed the

said.

chains to give customers sweeter dining deals.

China agreed to import a substantial amount of US

In an interview with Bloomberg, CEO Steve Joyce of

products from 1 December 2018 to 1 March 2019, with

Dine Brands – which owns Applebee’s – said food costs

soybeans being a major part of this deal. Pork was the

would likely continue to decrease well into 2019, “as long

second-largest US agricultural export product to China

as those tariffs stay in place, the inventories continue to

before 2018. Indeed, with the massive problems Chinese

build.”

hog farmers are having with African Swine Flu and the

US consumers, too, have been paying less for pork

approaching Spring Festival – China’s largest festival of

at the supermarket, with wholesale hog prices in August

the year – it would seem a given that pork would be one

dropping to 2002 levels. However, with the trade war

of the major agricultural goods shipped from the US to

expected to drive up the prices of electronics made/

China during the three-month truce.

assembled in China, other items will be rising in price.

meatpacking.info

January~February 2019

11

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trans

pacific

partnership

Pacific trade deal now in effect O

n 30 December, the TPP-11 trade deal came into

a trading agreement that had taken something like six

effect and will soon lead to the cutting of trade tariffs

years to negotiate – and would have given expression to

across the Pacific. The deal, between Australia, Brunei,

an American ‘pivot’ to the Asia-Pacific adopted during the

Chile, Malaysia, Peru, New Zealand, Canada, Japan,

Barack Obama administration.

Mexico, Singapore, and Vietnam, will help these nations

While it would be easy to say that the TPP-12 fell victim

become a united front to China’s domineering economic

to nothing more than Trump’s efforts to ‘de-Obamaize’

influence, along with the USA's.

the country, his opponent Hillary Clinton said during the

Under TPP-11 rules, six countries, or a majority, needed to ratify the agreement before it became operable.

Australia became the sixth, joining Canada, Japan,

campaign that she too, if elected, would pull the USA out of the deal.

Needless to say, the US agricultural industry was a big

Mexico, New Zealand and Singapore as part of the first

proponent of US participation in the TPP. Needless to say,

group at the end of 2018. Those countries that have not

Australian agriculture is over the moon that it’s in and the

yet ratified include Brunei, Chile, Malaysia, Peru and

US isn’t.

Vietnam. The five are expected to fall into line over the next several months.

Off in the wings are Colombia, Indonesia, South Korea,

According to BlueNote, from an Australian perspective TPP-11 will have a number of immediate benefits. These will include significant reductions in tariffs on imports of

Republic of China (Taiwan), and Thailand. If Brexit goes

Australian beef into the Japanese market; new access

through, the UK – which is about as far removed from

for dairy products and sugar to Japan, Canada and

the Pacific as you can get – has expressed an interest in

Mexico; tariff reductions for cereals and grain exporters to

joining. Although China at one time said it would form its

Japan, including rice; elimination of all tariffs on sheep-

own trade pact, it has recently said it might be interested

meat, cotton and wool; elimination of tariffs on seafood,

in joining, as is the USA which left the trade deal in a huff.

horticulture and wine; and the elimination of all tariffs on

If China, the USA, and the ROC all become members, it can be truly said that the pursuit of money leads to some very strange bed fellows.

Officially called the Comprehensive and Progressive Agreement for Trans Pacific Partnership, or TPP-11 for

industrial products (manufactured goods).

Both Canada and Mexico see the trade deal as a way of helping them stand up to recent economic bullying by the USA. According to Jeffrey Schott, Peterson Institute of

short, it’s what remains of a trade deal that would have

International Economic trade expert and author of

accounted for 37 percent of the world’s GDP and one-

Handbook of International Trade Agreements, the Trump

quarter of global trade.

administration’s decision to withdraw made little sense

However, after US President Donald Trump decided it

given the TPP-11 incorporated many of the elements of

was bad deal and pulled out, the TPP-12 turned into TPP-

what American trade experts regard as a ‘gold standard’

11. Now it will account for 13.3 percent of GDP, but this

Korea-US Free Trade Agreement, including protection

is still worth a whopping $10.6 trillion and will open-up

for copyright and trademark holders beyond the WTO’s

markets to 500 million people.

intellectual property provisions.

Why did the USA throw its toys out of the pram?

“Contrary to the Trump Administration critique, the TPP

According to BlueNotes, no tangible benefit would

provisions produced a noteworthy agreement and one

seem to accrue to Washington for having pulled out of

that was favorable to US trading interest,’’ writes Schott.

12

January~February 2019

Meat Packing Journal

peta

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Supreme Court declines to hear animal rights challenges T

he US Supreme Court has decided not to hear

Prop 2 was too vague in its cage dimensions, so this last

challenges to two of California’s most wide ranging

year, Proposition 12 was put on the ballot, which specifies

and controversial animal rights bills that have the potential

exactly how much floor space farmers had to give

to affect how animals are raised across the USA.

animals.

In November, California’s voters approved Proposition

It requires that, starting in 2020, calves confined for

12 that requires all eggs sold in the state come from

production have at least 43 square feet (4 square meters)

cage-free hens by 2022. In other words, if you’re a famer

of usable floor space, while breeding pigs be given at

in Iowa and want to sell your eggs in California, you’ll have

least 24 square feet (2.2 square meters) of floor space in

to follow Californian laws.

their pens starting in 2022.

Proposition 12 also bans the sale of pork and veal in

Starting in 2020, egg-laying hens must be given 1

California from farm animals raised in cages that don't

square foot (144 square inches) of floor space each on the

meet the new minimum size requirements. Again, this

way to being cage-free by 2022.

means the Golden State's new rules will apply to farmers

Politics can make for strange bedfellows and Prop 12

nationwide whose eggs, veal, and pork are sold in

was no exception. While major backers included Prevent

California.

Cruelty California, The Humane Society of the United

Supporters say the measure is a big step toward more

States [which openly is opposed to any animals being

humane farming practices, while opponents say it is

farmed], and more than 600 California veterinarians and

misleading and maintains cruel practices for animals.

vet clinics, major opponents included the Association of

Dubbed the Prevention of Cruelty to Farm Animals Act, Proposition 12 builds on an earlier ballot measure, Proposition 2, that passed in 2008 and banned keeping

California Egg Farmers & National Pork Producers Council and astonishingly, three animal rights organizations.

These were the Humane Farming Association, People

hens, calves and pigs in tiny cages so cramped they

for the Ethical Treatment of Animals (PETA), and Friends of

couldn't stand up, lie down or turn around.

Animals. They accused the Humane Society of colluding

After Prop 2 passed, however, Californian egg producers argued that the law put them at a financial

with the United Egg Producers.

According to PETA, when “humane” groups support

disadvantage when compared to eggs being shipped in

egg production just as they support “humane meat,”

from other states without the same rules.

consumers interested in making compassionate choices

With arguments flying back and forth, it took seven years for the law to go into effect, with the outcome being if you wanted to sell eggs in California, you had to play by Californian rules, no matter what state you were in.

It was Prop 2 that Missouri, Iowa, and other egg-laying

start thinking, “Great! I can eat animals and eggs without harming anyone.”

“No animal-protection – and certainly no animal rights – groups should be promoting a non-vegan diet. We should all be taking action for change, not advocating

states hoped to challenge in the Supreme Court, arguing

chicken prisons in which the scared animals are still

that according to the Egg Products Inspection Act and the

crammed into massive sheds with almost no room to

Interstate Commerce Clause – a law that limits the power

move,” said PETA. “Those in the industry must be laughing

of individual states to erect barriers against interstate

hard at seeing how easy it is to make chickens’ advocates

trade – California was out of order. That argument had

acquiesce and how willing they are to allow those who

already been dismissed by the US Court of Appeals,

profit from exploiting animals to set the standard.”

Ninth Circuit, so the plaintiffs attempted to bring it further.

What has incensed Midwest farmers is that Californians – with only 0.16 percent of a population of 39.54 million being fulltime farmers – seemed to believe that they understood farming better than they did.

By the Supreme Court rejecting their argument, by

When Prop 2 came into effect and the price of eggs shot up in California, few people MPJ spoke to seemed to realize the cause and effect.

In Californian newspapers, oftentimes the editorial board was against Prop 12. Not for the reasons cited

by PETA, but they felt that Prop 2 already covered the

de facto it has given approval to a similar egg law in

problem, that it would drive up the price of eggs, hitting

Massachusetts, which was also being challenged.

hard those on a limited budget, and those who wanted to

Meanwhile, back in the Golden State some felt that

meatpacking.info

eat only cage-free eggs already had that option.

January~February 2019

13

n e ws

food

safety

Hundreds sick from ground beef

T

wenty-eighteen ended with a bang with the world’s

so that salmonella-contaminated meat wasn’t going out

largest beef producer getting hit with a massive

to consumers.

have been reported ill in 25 states, with 59 hospitalized,

started pushing for changes, but even its most recent

with no deaths.

petitions have been rejected by the USDA because the

ground beef recall in the USA. So far around 250 people

In 2014, the Center for Science in the Public Interest

Brazil-based JSB’s American branch has recalled

USDA said it wouldn’t be able to distinguish antibiotic-

in total around 12 million pounds (5,443 metric tons) of

resistant salmonella – the focus of the petition – from

ground beef, with this coming in two recalls. The first was

other types.

in October 2018 for 6.9 million pounds, with the second

The beef in question was sold at various places in over

following in early December for an additional 5 million

25 states, including Kroger, Walmart, Sam’s Club, and

pounds.

Ralph’s, with most of the illnesses found in the western

It’s believed that all of the contaminated beef

states of California and Colorado.

originated from a plant in Arizona, with packaging dates

Salmonella is one of the most common pathogens

beginning in July and the first illness reported in August.

linked to foodborne illness in the United States. It can last

According to some reports, there is a strong belief that

for months in packaged foods, and has caused outbreaks

the contaminated cows entered the food chain via

just this year in products ranging from pre-cut melon,

Arizona’s massive industrial dairy industry.

romaine lettuce, to raw chicken, ground turkey, and

Margins are unbelievably tight in the dairy industry in the States, Europe, and India. Cows that are showing

ground beef.

It’s estimated that salmonella sickens 1.2 million

the slightest decrease in milk production due to age or

Americans every year and causes 450 deaths. Bacteria-

sickness can be slaughtered and used for ground beef

contaminated foods — eggs, chicken, beef, milk, and raw

with a minimal of inspection.

produce — are the source of the majority of illnesses.

Many consumers are asking if people were beginning

Most people get better within a week, never see a doctor

to get sick in August, why did it take until October

or report the illness, and don’t need any treatment. This

before the government started acting? The answer is

makes it impossible to get a completely accurate count

complicated.

of the illness.

According to Bill Marler, a US attorney who specializes

The antibiotic-resistant stain, Salmonella Newport,

in foodborne illnesses, due to how the law is written

implicated in the current outbreak is more difficult to treat

in regards as to what is considered a food adulterant

and more likely to cause hospitalization and death.

and what isn’t, food producers can sell salmonellacontaminated meat as long as it’s going to be cooked.

While if you sell meat that is contaminated with

Despite the size of the recall, it’s not the largest ever.

The largest nationwide meat recall was 143 million pounds by Westland/Hallmark Meat in 2008 for sale of

certain strains of E. coli you’ll be looking at stiff fines and

ground beef, cuts and other meat products potentially

possible jail for allowing an adulterant into the meat, a

infected with mad cow disease.

loophole allows salmonella to legally slide on by due to

Prior to that, the largest ground beef recall occurred in

the assumption that it’s going to be cooked to at least an

1997 when Hudson Foods recalled 25 million pounds of

internal temperature of 160 deg F (71 C) which kills off the

ground beef with staph bacteria sold to Burger King.

pathogen. The USDA only starts acting when the illnesses or bodies start piling up.

Other major recalls include ConAgra's 2002 recall of about 19 million pounds of ground beef for potential

In other words, you can have a product that you know

E. coli contamination and the 2007 recall of more than

is contaminated with a form of salmonella, but as long as

21.7 million pounds of ground beef for potential E. coli

there is a commonsense assumption that the meat will

contamination that drove Topps Meat of New Jersey out

be cooked to a temperature that will kill salmonella, the

of business.

burden of avoidance is pushed over to the consumer. In

Worldwide, there is an estimated 93.8 million cases

this incident, kudos should actually be given to JSB for

of salmonella every year, with a conservative number

jumping relatively quickly onto this, despite not having

of 155,000 deaths attributed to the pathogen. However,

legal pressure being placed on them to act.

some believe a more accurate number of deaths is

Since the Nixon-era in the late 1960s, public health groups have tried to petition FSIS to change the system

14

January~February 2019

303,000. With either number used, most deaths take place in sub-Sahara Africa and are children.

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C O M M ENT

marketing

ROC and Japan respond to US marketing R

epublic of China (Taiwan) consumers may soon be demanding more US pork ribs after the US Meat

Export Federation recently conducted a series of tasting events and cooking classes in partnership with Chi Mei Food, a major food company in Taiwan.

Funded by the United Soybean Board, the USDA Market Access Program and the National Pork Board, USMEF’s two-month-long promotion took place at the Chi Mei Happiness Factory, a facility in Tainan City that houses dining establishments and studios for cooking classes and food-related workshops.

CMHF is also equipped with on-site shopping facilities and regularly conducts tasting programs and educational sessions on food products. The US pork rib tasting sessions were held during peak hours, five days each week. People visiting CMHF were given samples and educated on the quality and value of grain-fed US pork.

“Ready-to-eat US pork ribs were prepared by Jin Ku Food, a large pork importer in Taiwan,” says Davis Wu, USMEF director in Taiwan. “This particular pork product had only been sold to the banquet and catering sectors, but USMEF worked with Jin Ku Food to launch the US pork ribs with retailers, with the goal of getting more Taiwanese consumers to try US pork and become regular customers.

These tasting events were an important part of that effort.”

Wu says that while pork consumption in the ROC is very high, 90% of the pork consumed is domestic.

“Despite the high consumption of pork in Taiwan, it is rare to see US pork products on display or on restaurant

pork, took first place honors in the Nikkei MJ Advertising

menus, as most of the imported US pork is supplied to the

Awards for 2018.

food processing sector,” says Wu. “The lack of the visibility

Funding for the advertising series was provided by the

of US pork means consumers cannot connect its superior

USDA Market Access Program (MAP) and the National Pork

taste to the actual product and its origin.”

Board.

A display freezer filled with American pork ribs was

In Japanese, “Mitsuboshi” means “Three Star.” In the

placed next to the tasting demonstration, enabling

USMEF ad series, the three stars of US pork are “juiciness,

consumers to make the connection with US pork and to

deliciousness and tenderness.”

purchase it immediately after tasting the ribs. Customers

“USMEF recognizes that the competition for the

who could not make purchases on-site were given

Japanese market is growing more intense and this

instructions on how to place online orders through mobile

advertising campaign is an example of our commitment

devices.

to defend US pork’s share,” said Dan Halstrom, USMEF

A US Meat Export Federation (USMEF) advertising

president and CEO. “Although Japan is the largest value

campaign that promotes the high quality of US pork in

market for US pork, we realize that we need to keep

Japan won accolades from the Japanese advertising

working very hard to maintain our relationship with the

industry. The “Mitsuboshi American Pork” series, featuring

Japanese consumer to keep exports moving in the right

three newspaper ads touting the juiciness and flavor of US

direction.”

16

January~February 2019

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C O M M ENT

marketing

The secret sauce of food entrepreneurship L

ast week I had the opportunity to speak to a group at Kitchen Town, a commercial kitchen and an incubator

in the San Francisco Bay Area. The group was the latest cohort of the New Leaders Network a program sponsored by the James Irvine Foundation, a program I was fortunate enough to participate in a year or so ago.

The group had spent the day at Stanford’s d-school learning the principles of design thinking. They came to Kitchen Town to discuss entrepreneurship and its importance in today’s economy.

A question was asked, “What do entrepreneurs need?”

One of my co-presenters offered a great response. “They need an idea, capital, and talent.”

Later in the conversation, another presenter, a British guy who himself is a serial entrepreneur offered, in a way only a Brit can, that entrepreneurs need bloody persistence.

The conversation started a cascade of thoughts that has carried me to the writing of this article today. The question keeps ruminating in my head. What is the secret sauce of entrepreneurship?

I certainly agree that you need a great idea, must have

become an entrepreneur?” No one raised their hands or

access to capital, and the ability to find the right talent. I,

spoke up. I asked why and they all answered similarly.

too, believe bloody persistence is an imperative. But, I’ve

They just didn’t see entrepreneurship as a path. A couple

met a lot of entrepreneurs who check all those boxes and

mentioned that they may work for one, but none felt they

are still struggling even failing. So, there must be more that

would become one.

is needed to ensure success.

There is one element to which its recipient has no say

This conversation left me with two realizations. The first is that early exposure to entrepreneurship as a career is

in its appearance, but can make all the difference in the

vital to creating the second of my two realizations, belief.

world. That, of course, is the element of luck. But again,

One must believe that entrepreneurship is a viable path

luck doesn’t guarantee success and its absence does not

and they themselves are capable of becoming a founder

spell certain doom.

or co-founder.

One place on which my mind continues to land is

What is the secret sauce? It’s one part belief with a

this idea of an entrepreneurial eco-system. It’s a bit like a

heaping amount of luck paired with an idea, capital, talent,

chicken or egg discussion. What comes first, successful

and bloody persistence. All are then tossed into an eco-

entrepreneurs or the eco-system that bolsters and fosters

system that can sustain, support, educate, and promote.

entrepreneurship? I don’t have that answer, but what I do

I believe entrepreneurialism is having its renaissance

know is that where the system exists, be it a community or

and those communities or industries that can help provide

an industry, innovation, and disruption follow.

this secret sauce will flourish.

Another idea that continues to germinate in my brain

Elliot Begoun is the Principal of The Intertwine Group, a

stems from a conversation with my son and a group of

practice focused on helping emerging food and beverage

his friends. I wound up at a dinner a year or so ago with

brands grow. He works with clients to design and execute

this group and we were talking about their futures. These

customized route-to-market and go-to-market strategies

were all high performing students getting ready to head

that build velocity, gain distribution, and win share of

off to college. Each had the makings to be a leader or

stomach. His articles appear in publications such as the

an innovator. I asked, “Who at this table thinks they will

Huffington Post, SmartBrief, and Meat Packing Journal.

18

January~February 2019

Meat Packing Journal

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i n s i g ht

poultry

Poultry stays world leader by a beak Chicken’s growth is slowing making producers look for the next Klondike. In this huge feature, prepared specifically for those of you at this year’s IPPE, MPJ looks at which countries we think will be the next big thing and which to procced with caution.

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January~February 2019

Meat Packing Journal

poultry

i n s i g ht

T

he stats are coming in and the world’s poultry production is – once again – the world’s leading protein. According to FAO Food Outlook, the estimated world production for 2018 should end up at just

shy of 123 million metric tons (MT). Pork is just behind by a squeal at 121.1 million MT, with beef at 72 million MT and sheep/goat way back at 14.9 MT. If you want proof as to the continuing growth of poultry, look around at IPPE at poultry processing equipment manufacturers Prime, Marel, Meyn, Baader, and others. If production wasn’t going up, why would companies be promoting processing equipment that some speed along at 15,000 broilers per hour?

This last year has seen Avian Influenza largely under control and there has been abundant feed, thanks to large grain and soybean harvests in North America, Argentina, Brazil, and Russia.

All major producing countries have seen output growth in 2018, primarily in the United States, the Russian Federation, the EU, India, China, Turkey and Brazil. After several years of continued expansion – sustained by the use of genetics and streamlined production processes – the United States is expected to witness a 1.6 percent output rise in 2018.

Following large-scale investments in the sector in recent years, the Russian Federation is forecast to record a final 4.5 percent production growth, slower than the 7.2 percent of 2017, as saturation of the market is weighing on prices. Prospects are also positive in the EU, where the sector could register a 1.2-percent output growth.

In China, the second largest producer in the world after the United States, ample feed supplies and the successful control of HPAI are expected to foster a production rebound after the sharp contraction experienced in 2017. Strong domestic demand is forecast to sustain continued production growth in India and Turkey.

In spite of more difficult access to several key external markets, Brazil’s poultry meat production is expected to make further inroads, supported by the plentiful availability of feed and buoyant domestic demand.

Much of the predicted rise in world poultry imports in 2018 stemmed from China and Japan, the two largest international poultry markets, the EU and Angola, in that order, with sizable increases also expected in Ghana, Iraq and Mexico.

By contrast, sales of poultry meat to Saudi Arabia are forecast to fall by more than 10 percent to their lowest level since 2009. The decline has been partly driven by a reportedly large outflow of foreign residents from the country, triggered by the introduction of an expatriate levy. In addition, the country is considering barring entry to meat that does not meet strict Halal standards,

meatpacking.info

January~February 2019

21

i n s i g ht

poultry

particularly in relation to the stunning of animals to be slaughtered, a move that would mostly affect shipments

decline in population numbers.

Nigeria, Ghana, Angola, and South Africa should then

from Brazil and the EU. This should be screaming out

become the next major poultry growth areas, but this will

‘Opportunity’ to Turkey. As of right now, around 80 to

remain to be seen. Governments in the region will have to

85 percent of Halal poultry is produced by non-Muslim

become more helpful and flexible in dealing with outside

countries.

investment. In addition, across the board infrastructure

The Russian Federation is also likely to buy less poultry meat in 2018, as increased domestic production

needs to be improved, including water quality, rail, and electricity, along with a significant decrease in corruption.

is exerting downward pressure on local prices, making

Southeast Asia

imports less attractive. Much of 2018’s expansion of world exports was anticipated to be met by the USA, Thailand, Ukraine. and the EU. In the case of Ukraine, the increase is likely to be fostered by easier access to the EU market under the Association Agreement that came officially into force towards the end of 2017. By contrast, exports from Brazil may decline somewhat, as the country faces more difficult access to important markets, in particular that of the EU, which has banned imports from 35 Brazilian

I

f you want a safe bet country with a stable government, poultry consumption in Vietnam, India, Indonesia, and the Philippines has outperformed

global growth in the past five years, and Rabobank expect this trend to continue in the next five.

There are three key factors Rabobank believes will play

packers, but also to those of China and Saudi Arabia.

a greater role in driving change in consumer demand in

Nonetheless, Brazil is forecast to remain the leading

these countries: (1) value for money and convenience, (2)

poultry meat exporter in the world.

the millennials’ increasing influence, and (3) foodservice as a more important channel than retail.

What next?

In today’s fast-growing poultry markets of Vietnam, India, Indonesia, and the Philippines, consumers are increasingly focused on value-for-money and

T

he USA remains the world’s Blue Chip stock in

convenience. Expansion of processing capacity and

poultry production. While its increases might not

potential disruptions (eg, cheaper imports of chicken cuts)

be staggering in size, they remain highly reliable

will increase competition in further processed products

and 2019’s production is expected to increase – much has

– delivered into food retail – requiring more innovation in

it has pretty much every year for the past 20.

the retail channel to remain competitive.

Again, like all Blue Chip stocks, some years might be

MPJ looked specifically at Indonesia last year and

slower than others and according to Rabobank, the first

liked much at what we saw. A percentage-wise small, but

half of 2019 will definitely be slow for US producers due

actual numbers high, middleclass population is driving up

to weak prices and demand. This will pick up, however, in

protein consumption.

the second half of 2019.

For the USA not to remain the world’s leader in broiler

In all four of these countries the share of poultry consumption through foodservice is far bigger than

production through at least 2025, it will take a disaster of

further processed products, and the significant millennial

biblical proportions and in looking out the window, MPJ

population in these countries will give this a further boost

sees no fire falling from the sky.

over the next five years.

But scratch any chicken producer and you’ll find a

Rabobank believes poultry producers will increasingly

gambler underneath. While ‘safe’ is good for investments,

need to connect with consumers, and to improve product

Tyson and Cargill didn’t get to where they are today by

accessibility through their own distribution channels.

always taking the well-trodden path.

The world’s population has slowed down in growth,

“Chains of chicken fast-food kiosks appear wellsuited to win in the changing consumption landscape of

but this figure is deceptive. Countries in Europe, North

Vietnam, India, Indonesia, and the Philippines,” according

America, and parts of Asia (Japan and South Korea) are

to Ben Santoso, senior analyst – Rabobank Animal

showing either a decline in population or are just barely

Protein. “These kiosks tick all the boxes when it comes

showing growth. However, in Africa – particularly sub-

to accessibility, infrastructure, and direct consumer

Sahara – and Southeast Asia are showing anything but a

interaction.”

22

January~February 2019

Meat Packing Journal

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Innovating the future

i n s i g ht

poultry

Thailand’s poultry is held back It’s the second largest economy in Southeast Asia, biggest poultry producer in the region, but could be so much more. MPJ reports

half of Thailand’s total meat and feed production, ranking number four in Asia’s poultry meat production with a total of almost 1.8 million MT in 2018, which is expected to increase by around five percent this year.

Thailand has had major success in improving farm productivities, disease control, food safety, and end-

F

product development for export. The only year that

or those who follow American football, at the

Thailand’s poultry figures dropped significantly – over 32

start of every season there is a team that on

percent – was in 2004 when the industry was struck hard

paper should be capable of finishing at least

by an outbreak of Avian Influenza.

in the opening playoffs, if not even better. But by the time the playoffs begin, this team’s

Last year the Thai government announced that it plans on revitalizing its 'Kitchen of the World' campaign. This

stadium has already shut off the lights and its fans are

scheme, first launched in 2012, was created to accelerate

dreaming of next year.

Thailand's goal to become a major world food exporter,

This is Thailand’s poultry industry. On paper, it should

with a strong view towards the country’s rice, poultry, and

right up there in the top 10, even the top five. But, there is

black tiger shrimp as the three lead export items. One of

a reason why it’s not.

the Kitchen’s goal even includes exporting Thai chefs and

Thailand has a population of just shy of 70 million people and is strategically located to markets in the region and beyond. By comparison, neighboring Vietnam

helping set-up Thai restaurants outside of the country to promote Thai food products.

Since this scheme was introduced, Thailand has

has a population of 95.6 million; the Philippines 105

become the largest food exporter in Southeast Asia, with

million; and Indonesia 264 million.

exports hitting $29.4 billion last year.

For the last couple of years its tourist slogan was

About 30 percent of Thailand’s poultry is exported and

“Amazing Thailand.” This could be a reflection on its

it has an odd way of cropping up where you least expect

government, which for years has flipped back and forth

it. Have a chicken curry anywhere in the UK and there is

between a democracy and a military junta – which is

an excellent chance the chicken is from Thailand. In fact,

currently in power. “Amazing”, because very few people

throughout much of the EU and Japan, restaurants use

outside of Thailand seem to realize this or care – it doesn’t

frozen chicken from Thailand.

affect its massive tourist industry one iota. Thailand’s

There are major local and foreign poultry producers

current slogan, “Open to the new shades”, is perhaps

in Thailand who have been pushing steady increases in

purposely so bizarre and puzzling as to get no one

production since the 1990s. It all sounds good – but sadly

thinking of the junta or a lack of democracy.

it’s not.

Its membership of the Association of Southeast Asian

Its all down to feed

Nations (ASEAN) provides businesses in Thailand the advantages of the ASEAN Economic Community, a single market of over 600 million people covering 10 countries in the region. This and its prime location in Asia should have it being in the world’s top poultry producers.

Over the past four decades, Thailand’s poultry sector

T

hailand’s development has been generally based on agricultural production. The agricultural sector of the country, which is mainly supported by

has transformed itself from backyard farming into a

millions of smallholders, continues to be the basis of

leading poultry exporter. In figures from the USDA,

livelihood for the majority of its population, of whom

Thailand’s production in 1980 was 230,000 metric tons;

about one-third are employed in agriculture. At least 30

575k MT in 1990; 1 million MT in 2000; and 1.28 million

percent of the country’s total land area is now used for

MT in 2010. Today, the poultry sector occupies more than

agricultural activities.

24

January~February 2019

Meat Packing Journal

poultry

meatpacking.info

i n s i g ht

January~February 2019

25

i n s i g ht

poultry

The country’s animal industry requires corn (maize) for

consumers eating it. Instead of corn, it would be possible

feed and almost all corn grown in Thailand goes to the

to move corn farmers over the production of Arabica

poultry and pig industry with a smaller amount going to

and Robusta coffee, which is already being produced in

its aquaculture industry.

Thailand and Vietnam, and is well suited for the region.

Most corn in Thailand is grown in the north of the

Exports, imports and local

country in the more hilly and mountainous region. Unlike rice which requires extensive irrigation and paddy terrace construction in the hill region, corn does not, which makes it more suitable for the area.

Almost all of the crop – 90 percent – is sold on to brokers who in turn sell it to animal feed companies. Very little – around two percent – makes its way into food

A

round 70 percent of the total poultry production in Thailand is consumed domestically, with the remaining 30 percent exported. It was expected

last year that due to Thailand’s ever growing tourism

products for humans. One of the most common uses with

industry and domestic consumption, local demand

this is corn starch, used to thicken cooking sauces.

would increase and growers upped production. However,

The 10 percent of corn that the shareholders hold back

according to Rabobank, the industry ended up suffering

is used for the next planting (there can be up to two a

from oversupply during part of last year, causing prices to

year) and for their own domestic use – mostly as animal

drop sharply by 27 percent.

feed and for making a potent corn liquor.

Even with this high of proportion of domestic corn going to feed, it cannot meet the poultry and pig farmers’ needs. According to the USDA, in 2017 the demand for

Last year’s Thai poultry industry was also affected by an ongoing oversupply of pork in the Thai market, resulting in low pork prices which fell by 20 percent.

Thailand’s largest poultry export markets are the EU

poultry and swine feed was around 8 million metric tons

and Japan. Other export markets include Laos, Singapore,

which is far above local corn production of around 4 to 5

Malaysia, South Korea, and Hong Kong, but these are far

million metric tons.

less big in size. Due to the lower price, traditional culture

Maybe seeing what happened to Mexico’s small

and – in particular for Malaysia and Indonesia – religious

farmers when NAFTA allowed US corn to flood the

reasons, the main protein source in Southeast Asia is

Mexican market and drive farmers off the land, the Thai

poultry. Only Vietnam and Philippines consume pork as

government has imposed a high tariff on imported feed.

the main source of protein.

This in turn keeps the price of Thai poultry higher than

Why Thailand has not position itself as the main

that of American or Brazilian poultry and kills it chances of

poultry supplier to Malaysia and Indonesia is a question

joining the top producers.

MPJ does not have an answer.

For any government, it’s a hard call to make. Northern

Ever optimistic, Thailand’s Office of Agriculture

Thailand is poorer than the south and while it is not often

Economics says exports are expected to grow further in

discussed, some farmers send their wives or daughters

the coming years due to strong demand. Both cooked

to work temporarily as prostitutes in the southern tourist

and uncooked chicken meat exports, increased by 11

areas, sending their money back north to support the

percent to 355,000 MT over the first half of 2016. Thailand

farm. In addition, opium was also seen by farmers in

is already well geared up for further processing and it is

this region as a cash crop and it is something that the

expected that cooked chicken/value-added products will

government – along with the US DEA – would not want

shortly make up around 70 percent of total chicken meat

to see a return to. By keeping the value of their corn crop

world export.

artificially high, it helps to keep these farmers solvent.

Unfortunately, in today’s dynamic poultry market,

Thailand already does this with tuna. While a good portion of all the world’s tuna cans have on them “Packed

trying to keep things “as is” does not work as there is

in Thailand”, Thailand itself is not a major tuna fishing

always someone else looking at your markets and

nation. Instead, skipjack tuna is caught off the west coast

wondering how they can take advantage of them. If

of the Americans (eastern Pacific), flash frozen, and

Thailand does not take a more aggressive stance in

shipped to Thailand where it is cooked and canned.

building its poultry industry, will it lose what it has?

It leaves MPJ wondering if the Thai government then

Pilchards are also caught elsewhere, canned in Thailand, and shipped to South Africa. About eight years

would be better off lowering or doing away with the feed

ago US Alaskan salmon canneries were looking to shift

tariffs and increasing poultry production for export, which

operation to Thailand, but this did not happen.

will then increase the country’s gross domestic products

With growth in exports to the EU limited due to

(GDP). The farming of corn is relatively new in Thailand,

the quota allocated to Thailand, along with increased

having started in the 1960s, so there is not a long tradition

competition from producing countries in Eastern Europe

of farming it like rice nor is there any tradition of Thai

such as Poland and an up-and-coming Ukraine, MPJ does

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i n s i g ht

not see much growth in Thailand’s long-term potential

(CPF) Thailand is the largest company, accounting for 29

in Europe and questions whether it needs this market?

percent of total production, followed by Betagro, Saha

Total chicken exports grew by 8 percent in 2018 and is

Farm, Laemthong, Thai Foods Group and GFPT. These

expected by the USDA to increase by a further 6 percent

companies, along with other have implemented vertically

in 2019 to 870,000 MT due to anticipated continued

integration farming.

growth of exports to Japan and other non-EU markets.

The Thai broiler industry has utilized new technologies

On the Thai market, Thai Foods Group is market leader with a market share of almost 18 percent, followed by CP,

including improved genetics, farm management, and

Betagro and Laemthong. The remaining part is coming

feed nutrition. The average weight of fully grown broilers

from local farmers.

at slaughter is currently 2.3-2.4 kilograms per bird,

There are a number of major foreign companies active

compared to 2.0-2.1 kilograms per bird in the mid-2000s.

in the Thai poultry sector. One of them is Cargill, a fully

The number of days it takes to raise one-day old chicks

integrated poultry processing business with locations in

to market delivery dropped to 40-42 days from 49 days,

Saraburi and Korat (see below). It produces a wide range

and average feed conversion ratio (FCR) decreased to 1.6-

of fully-cooked, frozen chicken products, with more than

1.7kg from 1.9-2.0kg over the same period.

80 percent of its products exported to Japan, Europe,

If you want to import poultry into Thailand, you might want to give it a second thought.

Thailand is a highly-protected market where the

Canada, and Hong Kong.

Ajinomoto (Japan) specializes in frozen food from chicken meat and animal nutrition, which can be used

government selects what type of poultry meat is allowed

as an additive for feed. Nipponham is another Japanese

for import. The USDA says that US chicken meat products

company producing a variety of food including fresh

are practically banned through non-transparent import

meat.

permit controls have prevented potential importers from being able to acquire import permits.

Additionally, high import tariffs (30 percent for chilled

Other foreign businesses operating in Thailand are Invivo (France), Cheil Jedang (Korean) and BRF (Brazil).

According to the Dutch government, Thailand’s

or frozen uncooked meat and 40 percent for cooked

major broiler producing provinces can be divided into

chicken meat) and a discriminatory import permit fee on

different groups. The first group include the key provinces

uncooked products (7 baht/kg or around $210/MT) are

Nakorn Ratchasima (or Korat), Burirum, Surin, Prachinburi

employed to protect the domestic market from imports.

and Lopburi. The second group includes Chonburi,

Marketing opportunities for US chicken meat exports

Chachoengsao and Ayudhaya in the Central and East

to Thailand remain unchanged. Local Thai consumers,

region. Recently, broiler production has been expanded

similar to other Asian countries, prefer dark chicken meat

to the eastern provinces Saraburi and Suphanburi in the

to white meat. Therefore, Thailand remains a potential

Central West. Moreover, Chachoengsao, Ayudhaya and

market for US chicken parts (especially leg-quarters),

Nakorn Nayok are also the major producing provinces on

mechanically deboned meat (MDM), and value-added

layer for hen egg production.

chicken meat. Potential buyers for chicken parts and

Opportunities

MDM include food processors (sausage processors in the case of MDM) and supermarkets. Value-added chicken meat can also be introduced to modern retail markets and the food service industry.

In the future, Thailand may import bone-in-leg chicken meat for processing and re-export to markets such as Japan and non-EU countries. However, due to non-tariff barriers, US poultry exports to Thailand remain severely limited.

O

ne of the best ways for you to see firsthand what opportunities are in Thailand would be to attend VIV Asia 2019 Bangkok. With the show being this

March, you need to start planning immediately.

What you will find in Thailand is that much of the work on a Thai processing line is still done manually. With rising salaries, a government and industry push for food safety,

Main market players

and the difficulties in finding and training workers, there is a definite need for plant automation.

A

Despite progress being made, food safety issues

ccording to the Thai Broiler Processing Exporters

are a continuing concern by both exporters and Thai

Association, there are more than 40 players

consumers and if this is your area of expertise, you might

active in the Thai poultry industry. Integrated

find opportunities.

commercial farms or large to medium commercial farms

According to the Dutch government, Thai exporters

make up only around 20 percent of these market players.

have introduced a traceability system for the complete

In terms of production volume, Charoen Pokphand Foods

production process from feed to end-product. Higher

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January~February 2019

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i n s i g ht

poultry

food quality and safety standards have also been applied

the aquaculture industry and the expansion of a cooked

to those who produce for the local market. But, is it

poultry facility in Nakornratchasima, in Northeastern

working?

Thailand. The company will also upgrade and refurbish an

According to Food Safety Magazine, a recent audit of the control system in Thailand on poultry meat for export

aqua feed production plant located in Petchaburi.

According to Cargill, the investment into the poultry

to Europe has found it has got worse in some areas since

business reflects its importance to Cargill, which makes

the last inspection in 2013.

up nearly 80 percent of the company’s operations in

These eight sites included six major exporters to EU, two of whom have been involved in RASFF border

Thailand, with exports to more than 28 countries.

“These planned investments demonstrate our

rejections for Salmonella, one establishment in which

commitment to the communities and people of Thailand.

serious deficiencies were found during the 2013 audit

We appreciate the Thai government’s support of direct

and one plant recently listed for export to the EU but not

foreign investment which has allowed companies like

doing so yet.

Cargill to grow with the Thai economy and community

The previous audit five years ago highlighted

over the last 50 years. By investing in technology

deficiencies in relation to approval procedures (not

innovation, we can make our supply chains as efficient

concluding the establishment complies with relevant

and sustainable as possible – as we work to nourish those

EU requirements), maintenance and sanitary conditions,

in Thailand and around the world,” says Dave MacLennan,

sampling plans of the competent authority and food

chairman and CEO of Cargill, during his visit for the 50th

businesses checks, use of correct analytical methods for

anniversary celebrations.

Listeria monocytogenes and certification procedures.

As part of Cargill’s ongoing commitment to Thailand also includes investments in the local community,

Long time investors

including efforts to equip more than 1,500 farmers with agricultural technical knowledge and training. The company also works with local partners such as Save the

C

argill, which has 50 years’ experience in Thailand,

Children Thailand to create nutrition initiatives for school-

has just announced that it is continuing this

aged children and has been providing clean drinking

relationship with investments of more than $70

water stations for schools, continually supporting schools

million over the next two years to address the increase

around the company’s facilities and building homes for

global demand of poultry and seafood.

rural residents.

The $70 million investments are part of the company’s

Cargill has operated in Thailand for 50 years, opening

global innovation strategy to leverage technology, in

of its first office in 1968. The company has invested more

support of the needs of partners and customers. This

than $1.15 billion into its operations to-date across various

includes technology implementation into the poultry

businesses during its expansion and growth through

supply chain, additional funds for the Technology

the years, and currently has 14 facilities throughout the

Application Center for research and development for

country with more than 17,000 employees.

28

January~February 2019

Meat Packing Journal

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poultry

Is the sky is falling on Turkey?

Although some publications and bloggers see Turkey as the next big thing, MPJ editor Velo Mitrovich doesn’t and urges caution. Here’s why

central part of Turkey. What seemed like a very European and progressive country suddenly seems what it is, a very Middle Eastern country. While to the far west it might share a border with Greece, to the east it borders Iran and Iraq and to the south, Syria.

Over the years MPJ has seen in Turkey some very

T

modern, progressive processing plants and feed mills

he Republic of Turkey is a country of

for numerous types of protein production. It has also

contradictions and even as I write this, I feel

seen some that had old, tattered electrical cables

the contradictions in myself regarding this

running through pools of water on the plant floor, viewed

amazing and troublesome country.

“automation” as some untranslatable word, and used

After landing at Istanbul’s main airport,

take the E80 ring highway, cross the Bosphorus Strait on the Faith Sultan Mehmet Bridge – which puts you into

dried olive pits as a source of heating fuel, sending clouds of black soot everywhere.

Turkey is one of those countries that MPJ would like

Asia – and then drive south on the E881 from Bursa to

to give a two-thumbs up investment rating for – but not

port city of Izmir on a very modern highway. You will see

in Turkey since thumbs-up is considered a very vulgar

Starbucks, Burger Kings, KFCs, and enough shopping

gesture. Once you’re out of the tourist area of Istanbul,

malls to make you wonder if you’re in southern California,

with its overly aggressive carpet salesmen and tourist

with the only exception being Turka Cola billboards

touts, you’ll find very decent people who will go out of

instead of Coca Cola, and a lack of traffic on the roads

their way to help you. The food is some of the best in the

unless it’s summer.

world, both the coastline and mountain scenery can be

Instead of hugging the coast, however, drive into the

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stunning, and you’ll see why so many people say ‘Paris’

Meat Packing Journal

poultry

and ‘Istanbul’ in the same breath.

But, there is also a reason why you find so many

i n s i g ht

world by a long shot.]

The Turkish diaspora, however, started long before

Turks living in Germany, Denmark, and the Netherlands.

Erdogan came to power and unfortunately it will probably

According to The New York Times, they are leaving the

continue long after he and his one-man rule are just

country in droves and taking talent and capital with them

distant memory.

in a way that indicates a broad and alarming loss of

According to Statistica, based on economic standards,

confidence in President Recep Erdogan. In the last two

Turkey is recognized as an emerging market and is one

to three years, not only have students and academics

of the world’s newly industrialized countries, having

fled the country after the failed 2016 coup, but now

earned a place in the Group of Twenty, which is a group

entrepreneurs, businesspeople, and thousands of wealthy

consisting of the twenty most important economies on

individuals who are selling everything and moving their

the world scene.

families and money abroad.

“Turkey’s economic significance is partially attributed

Ibrahim Sirkeci, director of transnational studies at

to the country’s growth, especially during the recent

Regent’s University in London says that while Turkey has

global financial recession. While countries around the

seen waves of students and teachers leave before, this

world struggled to grow, let alone maintain a balanced

exodus looks “like a more permanent reordering of the

economy, Turkey has experienced a rather high

society and threatens to set Turkey back decades.”

percentage of gross domestic product growth annually.

It would be easy to point a finger of blame at the

“Additionally, Turkey’s financial sector has seen

current government of Erdogan, his cronies, and his

significant improvements, most notably with the country’s

policies which many see as a step back to the 19th

inflation, which reached rates lower than those prior to

century. [Don’t write about this in Turkey for the country

the financial crash and even the lowest in a decade,” says

has more journalists in jail than anywhere else in the

Statistica.

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Granted, if this article was being written in 2017, President Erdogan would be seen as a miracle worker.

From 2008-17, Turkey’s GDP rate led all others in the

recently: “Once again, we are facing a surreptitious political plot.”

According to global law firm Norton Rose Fulbright,

OECD block of nations by a country mile. This includes

lenders with foreign hard currency loans like US dollar

the USA, Japan, Korea, the EU, and others.

and euro to Turkish borrowers (both financial institutions

Erdogan raised living standards, increased trade and

and corporates) need to pay close attention to the

military deployments – extending Turkey’s influence on

economic and political situation in Turkey. “Some lenders

the world stage – and offered voters a vision of restoring

have been approached by borrowers to refinance

the glories of Turkey’s Ottoman past, before it became

existing loans and we expect that this trend will continue,”

known as the “Sick man of Europe” in the early 1900s.

says the firm. “The slide of the Turkish lira, the fact that

There was a reason, however, for the recent economic growth and unfortunately, much of its foundation was built on sand. Erdogan’s faulty economic policies, which

most foreign currency debt is not hedged and a wall of repayments coming up are factors for real concern.”

In the recent past one of Turkey’s way of dealing with

started in 2009 and helped to kick-start the economy,

a lira slide was to knock the zeros off its currency and

have begun to crash down.

issue new notes. On the wall of MPJ’s office is a 1 million

Blame has to be placed on the president who signed a decree in 2009 easing access to foreign-exchange loans for Turkish companies. According to the Wall

lira note from 2005 that at its time of issue was worth less than one US dollar.

Depending on whose statistics you believe – the

Street Journal, the new rules lifted restrictions that had

government or foreign – somewhere between a third

previously barred companies without revenue in hard

and half of Turkey’s 81 million population is currently

currencies from doing such borrowing – as long as the

considered impoverished, living on less than $120 a

loan exceeded $5 million. “This was tantamount to saying:

month

If you drink, drink a lot,” an official told the WSJ. The euro and dollar loans came in fast and furiously, allowing a massive economic expansion that helped Erdogan and his ruling Justice and Development Party to win successive local and national elections.

A coup attempt by members of the army in 2016

According to research group Universum, in a poll conducted among young Turks, the biggest dream most have is to leave the country.

And for those who flee? “Pardon us, we do not forgive,” Erdogan warned in a speech at the Foreign Economic Relations Board, a business association in Istanbul, last

was easily suppressed, thanks in part to some highly

April. “The hands of our nation would be on their collars

incompetent military officers who couldn’t even organize

both in this world and in the afterlife.”

seizing Erdogan at a holiday hotel in the south of the

Let's talk chicken

country. As news of the coup attempt spread via social media, thousands of ordinary citizens, armed with nothing more than kitchen utensils, gathered in streets and squares around the capital of Anatolia to oppose the coup leaders and supporters.

The crowds resisted tank fire and air bombardments and, with the help of loyalist soldiers and police forces,

C

hicken is the most popular meat in Turkey, with it often served grilled with a squeeze of lemon juice. It also is the most affordable meat,

particularly compared to beef and lamb – the high prices

they defeated the coup attempt in a matter of hours.

of which have been hot topics in the country. Food

Even in Istanbul, which had been the center of numerous

inflation in Turkey recently was generally over 12 percent,

protests against Erdogan, the people were reluctant to

but reached 19.75 percent in August 2018. Poultry meat

support the rebels. The government swiftly declared

prices at markets have been increasing in line with normal

victory and scores of troops that had taken part in the

inflation but, because chicken is a staple, consumers are

coup surrendered on the Bosphorus Bridge in Istanbul.

sensitive to price increases and the industry has been

His power intact, no one was going to question

hesitant to increase retail prices. An eight percent increase

Erdogan’s economic plans. Istanbul’s skyline went from

in poultry prices has been seen at the markets, according

19 high rise buildings to now just under 100. New rail,

to Turkish press.

highway, and bridge projects were launched.

But now the chickens have come home to roost. As

However, poultry consumption has not been impacted by the increasing poultry prices, since the price of

always, loans aren’t meant as gifts, but contracts that

chicken is still far below red meat prices. That said, with

need to be honored. The once vibrant economy has now

local elections happening this March, Erdogan has been

taken a sharp nose dive. According to Erdogan, however,

cutting deals with so far around 11 countries to ensure

this has not been due to his failed economic plan, but

that a cheap supple of red meat is available in Turkey and

instead to foreign power “jealousy”. He told supporters

is subsidizing Turkey red meat producers. Once the last

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i n s i g ht

vote is counted in March, however, there is doubt that this

Production Poultry and Products Annual Report 2018, the

policy will continue.

Turkish poultry sector’s struggles with high input costs

According to agricultural specialist Sinem Duyum

and unstable exchange rates have impacted a number

writing for the US Department of Agriculture, Turkey’s

of companies that have been working with low profit

poultry sector continued to grow in 2018, albeit at a

margins.

slower pace than the 10 percent growth seen in 2017. This

According to the USDA, this additional financial

growth is driven by increasing exports and increasing

stress can be seen for some leading poultry producers.

chicken consumption due to high red meat prices.

For example, in 2016, two major poultry producing

But, the devaluation of the Turkish currency has

companies, Aytac and Mudurnu, closed because of

financially hit Turkish poultry producers, due to high feed

financial losses. At the beginning of 2017, BRF SA of Brazil

prices dependent on imported inputs and limited supply

bought 79.48 percent of Banvit’s shares with 915.06

of domestically produced feed.

million TL (about $258 million at the time of purchase in

In 2019, chicken meat production is expected to slow to 4 percent growth because of the Turkish currency

2017).

In 2018, Keskinoğlu, a leading poultry company which

devaluation and its impact on the poultry feed sector

had been experiencing a liquidity shortage, announced

and imported breeding materials, such as day old chicks

that they applied for a “concordat” (bankruptcy protection)

and hatching eggs. Broiler meat production growth rate

to continue their business activities. Keskinoglu has been

slowed in 2018 when compared with the 10 percent

a leader in supplying eggs and chicken meat throughout

growth seen in 2017, but it still may reach 5 percent, for

Turkey for 55 years and has exported to 75 countries.

a total of 2.25 million metric tons (MT). The slowdown

The company had a turnover of TL 1.1 billion in 2017 and

in growth is because of higher feed prices and the

ranked 136th in the Istanbul Chamber of Industry's ranking

devaluation of the

of companies. Under the bankruptcy protection they will

Turkish currency, which makes imported inputs more

continue business activities and have decided to share this situation with the public for transparency.

expensive.

Since 2014, growth in Turkish poultry production had

Feed prices hurt

been slowing because of soft domestic and foreign demand. However, in 2017, the sector grew by 10 percent to reach 2.1 million MT of broiler meat and 52,000 MT of turkey meat, with a total of 2.18 million metric tons of total poultry meat production. Growing domestic and foreign demand sparked this production increase.

The main difficulties of the Turkish poultry sector are

A

ccording to Turkish poultry producers, the vast majority of Turkish poultry production costs are related to feed. Currently, the price of poultry is

68 percent based on the price of feed, and 14 percent

feed prices, as they are dependent on many imported

is the cost of the day-old chicks. Because feed is such

inputs, and Turkey’s currency which has been losing value

an important component, the issues impacting price

against the euro and dollar. The currency devaluation

and availability of inputs for poultry feed are critical for

also impacts other costs, such as electricity, and there are

the sector. Turkey farmers grows soybeans, corn, and a

additional issues around grandparent stocks needed to

significant amount of wheat, but it is not enough to meet

get more high quality broiler meat, says Duyum.

the demands for the growing poultry sector, so they must

The other issues facing the sector are prohibited use of

import additional soybeans and grains. However, Turkey’s

animal byproducts in poultry feeding, unreliable statistical

biosafety law limits imports and puts financial risks on

data, requirements in the last few years to lower antibiotic

importers

use in production being implemented as part of Turkey’s

Though soybean imports face zero tariffs, the

harmonized regulation to the EU, strict biosafety rules

mentioned biosafety law and slow approval process

which impact trade, low margins of farms which produce

for genetically modified (GM) soy and corn varieties

day-old chicks for the industry, and utilizing and disposing

significantly impacts imports and increases feed prices.

of manure.

Turkish importers faced market access problems importing soybeans, due to delays in the domestic

Financial stress

approval process for GM varieties that have already been approved in many other countries, including the European

T

Union. This prevents the domestic poultry industry from

he total annual returns of the poultry sector were

accessing affordable raw materials needed for feed and

approximately $5 billion in 2017, according to

causes soybean prices in Turkey to increase significantly,

BESDBIR, the Turkish Breeding and Poultry Meat

increasing the cost of production for poultry, meat, and

Producers Association. However, despite its Chicken Meat

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MPJ has seen Turkey over the years write its own rule book regarding feed, setting standards for imports much higher than its own standards for national use or export.

Turkey's currency hit an all-time low level against the U.S. dollar in 2018 which makes it even more difficult to import feedstuffs – the lira falling 37 percent against the dollar in 2018. Imported feed inputs are paid in foreign currency, while most poultry is sold domestically in local currency. General operations of businesses in Turkey are also hit by the fluctuations in the currency, including the rising costs of electricity and petrol linked with the devaluation in Turkey’s currency. This devaluation also put a burden on companies who have debt in dollars or other foreign currencies when domestic sales are in Turkish lira.

Import and export

T

urkey is a poultry meat exporter, mostly to Iraq and Middle Eastern countries. There is no import of poultry meat to Turkey, though Turkish Statistics

Institute (TUIK) does show some limited imports, but good luck figuring these out – it could be rejected or miss-sold poultry being shipped back. Tariffs on poultry meat entering Turkey are a whopping 65 percent, which discourages imports.

Exports remain an important income source for the sector since they can sell in dollars and make up for losses in the domestic market where they sell poultry in Turkish lira. It is expected that once all data is in, poultry exports will have increased again in 2018 by five percent.

Problems in neighboring countries, economic crises in Middle East countries, and transportation problems to Syria and Iraq had impacted to Turkish poultry exports which had been declining since 2015.

However, 2017 was the best year yet for poultry exports which reached $361 million. Turkey exported 369,705 MT of poultry meat (excluding paws exported to Hong Kong and China and broiler meat to China) in 2017, which was higher than anticipated. These increased exports are the result of new health protocols which were done with Saudi Arabia and Japan after the second half of 2017.

Turkey is the 5th largest exporting country of poultry meat, currently shipping product to over 70 countries. The sector has asked the Turkish Ministry of Agriculture and Forestry for subsidies to support high feed and electricity costs, as this would help the Turkish sector to compete with Brazil and Thailand.

Iraq is still the biggest Turkish market for poultry meat and has a 50 percent share of total Turkish exports. While there have been some difficulties in the last few years because of the economic, political, and military turmoil in the region, Turkey’s share of Iraq poultry imports has not declined. For the last two years, exporters have had a

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i n s i g ht

hard time getting permission from the Iraqi authorities for

the promise of EU statehood, said it would send billions

vehicles passing through the border. Despite this, Turkey

in euros to aid in this humanitarian effort. Money was

exported 225,000 MT of poultry products worth with $331

promised, money was not paid, and Erdogan finally ran

million to Iraq in 2017, which is up 33 percent from the

out of patience with the EU. Turkish raft and life jacket businesses made a small

previous year.

The Iraqi government announced in early July 2018

fortune, outfitting refugees who wanted out of Turkey.

that it will impose an extra custom tax for some products,

They were then pointed towards the nearest Greek

including chicken meat, as of August 2018. The extra

islands, some within a shout of Turkey, and the refuges

custom tax is now 50 percent, which was raised from 10

became someone else’s problems.

percent, and it includes poultry products, chicken pieces,

It wasn’t until Europe began getting flooded with

frozen poultry meat, and offal. The Iraqi government

Syrian, Afghanistan, Pakistan, and other mostly economic

stated that this implementation will last for four years and

refugees, that the EU started making substantial

the aim is to protect domestic production and to develop

payments to Turkey to get them to turn off the tap.

the national industry.

According to Turkish exporters, Iraq’s poultry

Finally realizing that the chances of joining Europe were – as they always were – zero, Erdogan quit dancing

production capacity is not sufficient for its own domestic

to the EU’s tune. He has since back-tracked on the

consumption and this new tariff could cause an increase

Armenian Genocide issue; back-tracked on trying to solve

in Iraq’s domestic poultry prices, so the implementation

the Kurdish issues with something other than a gun; has

could end up being repealed by the Iraqi government.

push-back women equality issues; arrested teachers and journalists by the thousands; engaged in a diplomatic row

Is now the time?

with the US; had a Russian military jet shot down; driven down the economy; soured relations with Israel and Greece; and seems to be dissolving the barrier that kept

A

t their height of power, the Ottoman’s

religion and politics separate in Turkey – one of Kemal’s

accomplished something that no one else has

major accomplishments and foundations of the Republic.

been able to do before or since. There was peace

in the Middle East between Muslims, Jews, and Christians.

During the beginning days of the Turkish Republic, its

While in many parts of the world, politics is politics and business is business, and never the twain shall meet. Turkey is an exception and MPJ does not see this

first president Mustafa Kemal Ataturk wrote a beautiful,

changing until there is a change in administration which

touching letter to the mothers and wives of those

nobody seems happening very soon.

Australian soldiers who fell during the Allies’ disastrous

If you decide to invest in Turkey’s poultry industry –

World War I campaign in Gallipoli. In the letter, Kemal

which some are doing and with success – do so only with

wrote that the graves of the soldiers would be respected

both eyes opened very wide.

and viewed as those of Turkey’s own young men – not

Builing a new plant

those of an enemy.

And then we have the current president Erdogan who seems to have accomplished what no other modern Turkish leader has – to deconstruct the Republic.

Erdogan started out in a strong position and was widely seen as the leader who would not only bring Turkey on par with any European nation, but he would also become the leader of a Turkish-centric Central Asia.

And, if Turkey joined the EU, it would be on its terms, not the EU’s.

E

stablished as a small broiler farm in 1978, today Şenpiliç is Turkey's biggest chicken meat producer with 16% market share and 320,000 metric tons/

year production quantity, producing for both the national and export market.

As a pioneering brand in the chicken sector of Turkey, Şenpiliç operates 24 breeding farms, two hatcheries,

But, things started happening that were out of his

two feed plants, two processing plants (Söğütlü and

control. Although much has been made of Germany

Alifuatpaşa) as well as a further processing plant. The

accepting 698,950 Syrian refugees since the crisis begin

company employs 3,074 people directly and 10,000

in 2011, Turkey has over 3.6 million Syrian refugees,

people indirectly.

along with a half million from other Middle East/Central

In Kadirli (southern Turkey close to the Syrian border),

Asian countries. This has cost the Turkish government

Şenpiliç is building a greenfield processing plant with

somewhere between $5 billion to $8 billion dollars,

a capacity of 450,000 pieces/day, as well as a feed

depending on whose source you care to believe. The

plant with an annual production capacity of 579,500

EU, which has had a policy for years of dangling a carrot

metric tons in the first stage. The plant is expected to be

in front of Turkey to get the country to do its biding with

operational this month. These projects will be followed by

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January~February 2019

Meat Packing Journal

poultry

i n s i g ht

investments in hatcheries and breeding farms to establish

These leg pieces are the only products to be graded and

an integrated facility. The total amount of investment will

batched automatically to compose fixed-weight trays.

All other cut-up pieces such as wings and fillets are

reach to 400 million Turkish lira ($74.7 million) The company uses equipment from several different

packed manually to compose catch-weight trays, while

manufacturers. Like how MPJ has seen elsewhere, it is

whole birds are packed into individual bags. Concerning

using Meyn for the initial processing and Marel for all

these products, Şenpiliç decided to batch them after

packing, batching, and labelling operations.

packing. That’s because the company uses the weighing

Meyn has supplied the plant with its high-speed system, capable of 15,000 broilers per hour. This includes

function of its nine Weigh Price Labelers as a basis for batching operations downstream.

After packaging, the process shifts from catch-weight

Meyn’s Rapid Plus Breast deboner M4.1, the Meyn Carousel rehanger M2.0, and the Meyn Line Weigher

trays to fixed-weight boxes. This is needed for the final

M2.0.

packing stage, where a large Marel BoxGrader takes

Giblets are interesting products for the Turkish retail

care of grading, sorting and diverting of boxes. Innova

market and many Turkish supermarkets have them

grading software allocates the eight to 12 kilo boxes to a

packed in trays in their shelves. Şenpiliç and Marel

predefined location. In this case, the boxes are unloaded

Poultry have found a flexible solution to create trays: two

from the main conveyor to one of the 24 roller belts.

Marel MultiHead Weighers. One of them is weighing and

According to purchase orders, boxes are collected

batching gizzards, the other one does the same with

to compose a pallet, ready to be shipped directly to

hearts and livers. The products are allocated to one of

customers with Şenpiliç’s large freight truck fleet.

The production in the processing plant is under

the 14 pockets and each pocket gathers the contents for one tray until the target weight has been reached. After

the control and supervision of the Turkish Standards

that, the fixed-weight batch is released to a tray, which is

Institution (TSE) and the International Organization for

aligned on a conveyor belt underneath the

Standardization and is certified with ISO 22000 Food

For the cut-up chicken pieces, Şenpiliç applies a

Safety Management System Certificate, ISO 9001 Quality

different approach of batching and packing. The company

Management System Certificate and HACCP 13001

has implemented two high-speed Marel SmartLine

Certificate. Şenpiliç’s processing plants hold the Halal

Graders to grade their bone-in thighs and drumsticks.

Food Certificate awarded by TSE.

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January~February 2019

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poultry

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Move over Poland, you have competition With its ultra-low production costs, the one country in Europe that can put fear in Polish poultry producers is the Ukraine.

MPJ says this is the country to watch.

Vertical integration that connects crop and feed production, hatcheries, chicken growing and slaughter became standard for all large and mid-size Ukrainian producers. This vertical approach decreases production risks significantly and brings economies-of-scale benefits, unachievable in small-scale farming.

W

According to industry sources, production costs in hen MPJ is asked which country’s

Ukraine remain one of the lowest in the world. It is likely

poultry industry would we invest

to be more efficient than poultry production in Argentina,

in, the Ukraine is at the top. Right

Thailand or Russia, and comparable to Brazil.

now, there are very few things that can get in its way of developing

Myronivsky Hliboproduct (MHP) remains the largest poultry producer in the country, representing over 60

its poultry industry. Unfortunately, one of those is Russia

percent of industrial poultry production in 2018. This

which has occupied the Eastern Ukraine, seized the

vertically integrated company produces grains, soy and

Crimea, and has recently captured three Ukrainian ships,

sunflower protein, processes it in their own feed mills, and

bringing international condemnation – not that this is

produces hatching eggs, and broilers. The company also

something Russian President Putin looses sleep over.

controls poultry slaughter, processing and distribution.

Although the conflict is far from being over with

Total crop production area in 2019 will exceed 370,000

occasional potshots still being fired, the borders have stabilized and the Ukrainian poultry industry has

hectares.

In 2017, the company sold its assets situated on the

recovered from the loss of consumers and facilities in

Russia-controlled Crimean Peninsula. MHP possesses

Crimea and Eastern Ukraine. While the domestic market

distribution centers in the Middle East and North Africa.

contracted due to the population loss, incomes of the

MHP’s Vinnitsa project will become the major

remaining consumers stabilized and grew, notably in

production site for MHP when all stages are completed

2017-18. For the majority of food products, consumption

and production is launched. In 2018, MHP launched two

recovered to 2013 pre-crisis levels.

new facilities investing almost $24 million. MHP is using

The stabilization of the political environment has had a positive impact on new poultry production investments.

New production facilities initiated operations in mid-2018.

Further expansion is expected in 2019, as new poultry houses are populated with birds, and new hatcheries

its processing plants in the Netherlands and Slovakia to insure EU market access.

Thus, production is expected to increase further by the end of 2018 and into 2019.

According to the company’s semiannual report, poultry

and slaughter lines are fully utilized. Ukraine’s domestic

production increased by seven percent to 308,ooo MT

industry remains highly concentrated, with the largest

with sales growth by two percent to 288,000 MT. Almost

producer responsible for over 60 percent of total

half of all poultry produced (9,133,000 MT) was exported.

production and the top seven Ukrainian broiler producers controlling over 90 percent of the market.

Facing a domestic demand that is essentially

Agromars is the second largest poultry producer in Ukraine. Production of this large vertically integrated company is concentrated mostly in north-central and

saturated, Ukrainian producers will increase exports to

eastern Ukraine. The company is privately owned and

traditional markets in the EU, the Middle East and Africa.

does not share production information. The company

Significant market diversification allows for substantial

recently completed a facility modernization program.

and stable exports. Trade problems related to political,

Some of Agromars production facilities are EU-approved.

technical and/or religious issues in Iraq, Egypt, Saudi

In mid-2018, the company was embroiled in a major

Arabia and the UAE have had a limited impact on

scandal regarding improper disposal of waste (poultry

Ukraine’s overall exports.

feces and deceased chickens). Reportedly, this is not

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the first time that the company was found neglecting environmental and human health concerns.

There are five mid-sized (second-tier) poultry producers in Ukraine that account for 18 percent of total production: Volodymyr-Volynska Ptahofabryka, Dniprovskaya Agro-Industrial Group of Companies, AgroOven LLC, Gubin Ptahocomplex and FG Ular. Poultry production at these second-tier facilities remained stable despite competition with MHP and cheap EU imports.

Midsize producers export small quantities of poultry products and concentrate on the regional markets in Ukraine.

Veterinary practices and general management of homegrown poultry remains basic. Feed is provided, but not balanced and chickens supplement through foraging.

Ducks are popular in villages with small pounds, lakes and rivers, where birds spend most of their time. Despite the primitive nature of household poultry production, efficiency is rather high due to a relatively low investment cost and labor.

Despite explosive growth of industrial chicken production, rural dwellers are reluctant to replace homegrown birds with industrially-produced birds.

Incomes, habit, traditions, belief in “natural” production methods – all contribute to inelastic poultry production and demand. The number of household birds remains stable, with an insignificant decrease over time.

The bulk of industrial production relies on chicken, with turkey and other less popular species occupying only two percent of total production. Traditionally chicken meat is the most popular protein to produce. It is also the cheapest meat. For the average, not-so-affluent, Ukrainian consumers, price is the most important factor, outweighing both dietary and health concerns.

Reliable statistics are available only for recent years, but indicate that household chicken occupies only a small share of total Ukrainian production, despite the large quantity produced. The combined share of nonbroiler production is only 15 percent. This share has remained stable over the last two decades and has had a limited impact on the quickly-growing industrial broiler production.

In 2018, growth in domestic chicken consumption is expected to remain flat, largely due to only modest

poultry products enables additional exports to the EU

income growth. Domestic demand is completely fulfilled

and elsewhere. Low disposable incomes in Ukraine,

by domestic industry production. Moreover, there is no

combined with a traditional consumption structure with

prospect for domestic demand growth to spur production

emphasis on cheap offal, results in large, simultaneous

growth. Expectations for 2019 are that this limited growth

poultry imports and exports.

is likely to continue.

Ukraine continues to be the major regional exporter of

Record-high exports are expected in 2018, with further growth projected in 2019. Ukraine will continue to ship

poultry products. As previously detailed, Ukraine exports

poultry to its traditional export markets in the Middle East

expensive poultry cuts and whole birds, and partially

and North Africa, although Ukrainian exports to these

replaces those exports with imports of cheap poultry

markets will decrease a little in 2018 due to the surge

offal from EU countries. Ukraine’s imports of low-end

in Ukrainian exports to the EU. Exports to the EU will be

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poultry

significant and well over Ukraine’s allocated tariff-rate quota. The top 10 poultry exporters to Ukraine are EU

i n s i g ht

destinations.

Due to the surge of Ukrainian exports to the EU, exports

countries. Other exporters are unable to compete with

to African and Middle Eastern countries decreased. The

cheap offal of EU origin.

EU is preferred to other export destinations due to its size,

Exports to the EU grew to a significant share, 35

reliability, geographic proximity and demand for premium

percent, of total Ukrainian poultry exports in 2018. This

parts. Ukraine’s exports to Saudi Arabia (from all four

situation is expected to continue into 2019, assuming no

approved facilities) were halted as of May, 2018 due to new

change in Ukraine’s access to the EU market. Ukraine

Saudi import requirements that do not allow for electrical

discovered new poultry markets in Spain and Bulgaria,

stunning of chicken prior to slaughter. The same rule is in

although so far test shipments have remained small.

place in UAE, where one of MHP’s distribution centers is

The Netherlands and Slovakia have become major EU

located.

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EU-28 keep poultry at forefront A little of this and a little of that. European Union producers show slow but steady growth. MPJ reports

E

urope’s chicken meat sector is expected to continue to grow in 2018 and 2019, due to slowly increasing domestic demand and increased exports. The economic downturn in Europe has not impacted sales, and in fact

mechanically deboned meat (MDM) to Sub-Saharan Africa and parts of Asia.

Making chicken

T

he EU-28 chicken sector is expected to continue to grow this year, benefiting from growing domestic demand and because it is cheaper than

most other meats and convenient for consumers. Export

makes the product more attractive to consumers than

demand also contributed to the increase in production.

other meats because it is cheaper and more convenient

About 98 percent of the production is made up of broiler

to prepare.

meat, the rest (less than 2 percent) being meat from hens,

As always, there can be a few flies in the ointment. If Brexit does occur, the EU’s farm subsidies pot of gold

primarily laying hens and cocks.

The growth in Polish chicken production is mainly

will take a pounding. Poland, who has become the EU-28

export driven with close to 50 percent of the production

leader in poultry, thanks to also being the leader in farm

exported. Interesting, far from being a polluting waste,

subsidies, is expecting a hit to the money paid out to

the poultry manure is recycled to produce mushrooms,

farmers. How big of impact will this have on Poland? The

with Poland becoming one of the largest EU producers of

jury is still out debating.

mushrooms.

As to be expected, EU-28 production last year varied in

France’s chicken meat production has stalled because

different regions, but chicken meat production increased

of declining exports and competition from other EU-28

from 2017 in most major EU producing countries

suppliers; the limited growth in production is now driven

especially in Poland.

exclusively by the increase in domestic consumption.

Highly Pathogenic Avian Influenza (HPAI) cases had

In Germany, growth in production benefited from a

no impact on EU-28 chicken production in 2018. The

reopened modern slaughter facility in Western Lower

significant decline in grain and protein prices from 2014 to

Saxony, but production remains under pressure due

summer of 2018 boosted chicken meat competitiveness

to welfare and environmental issues that hamper the

and increased operating margins, even as retail prices

installment of new poultry farms and the enlargement of

decreased. This trend is anticipated to continue in 2018

existing ones.

and 2019 even with the slight increase in grain prices since July 2018.

The EU-28 chicken imports are expected to decrease

Spain’s chicken production grew in the past years but will likely show that it stabilized in 2019 due to the downward Spanish retail sector pressure on poultry

in 2018. Thailand and Brazil remain the largest suppliers

prices for consumers lowering producer margins. It also

of chicken meat to the EU-28, but Brazilian exports are

led to the closure of uncompetitive chicken farms and

predicted to decline due to sanitary concerns that led

the switch to alternate poultry productions such as duck,

to the delisting of 20 Brazilian poultry processors from

turkey, partridge, and quail.

the list of plants eligible to export to the EU-28. With

Chicken meat production in Italy is expected to raise

completion of the Deep and Comprehensive Free Trade

in 2018 driven by profitable margins that could lead

Agreement (DCFTA) between the EU-28 and Ukraine in

to overproduction. These lower prices may lead to

2014, Ukrainian chicken meat exports to the EU-28 surged

decreased production in 2019.

and are expected to continue.

EU-28 chicken meat exports are expected to increase in 2018 and 2019 driven by a large increase in exports of low-priced dark meat cuts, bone-in cuts and

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January~February 2019

The growth of chicken meat production in Hungary will be stronger in 2018 after the decrease in 2017 due to the HPAI outbreaks.

After a slowdown of the Dutch production in 2017

Meat Packing Journal

poultry

i n s i g ht

after the findings of HPAI in 2016 and 2017, chicken meat

to export to the EU due to salmonella contamination risks.

production in the Netherlands is forecast to recover and

This delisting effectively halted imports into the EU from

increase to a new production record in 2018.

the affected meat company facilities.

An increase of production is also reported in UK, Czech

The ban was a blow to Brazil’s largest chicken

Republic, Sweden and Finland. EU-28 chicken production

processor, BRF SA, which had 12 plants delisted by the

is predicted to grow again in 2019 because of continued

EU. The impacted companies need now to “comply with

strong domestic demand for poultry meat given the slow

EU standards and build a track record of compliance,”

economic growth predicted for the EU-28 in 2019 that

after which approval for export to the EU may once again

favors cheap protein sources, combined with continued

be granted following EU inspections.

The United States, which exported as much as 92,000

export demand.

The increase in grain prices in the second half of 2018

MT of chicken meat in 2005 to Romania and Bulgaria, is

that will raise production costs at the end of 2018 and in

no longer a supplier to the EU-28, because the EU does

early 2019 could slow the growth. However, the short two-

not accept Pathogen Reduction Treatments (PRTs) that

month production cycle of the chicken industry makes it

are used by US poultry processors.

very reactive to outside events, both on the upside and downside, making accurate forecasts difficult.

EU-28 chicken meat exports are expected to increase in 2018, due to the growing appetite worldwide for EU-28 sourced chicken meat parts.

Chicken in & out

This growth is particularly strong in the Sub-Saharan African countries of Ghana, Benin, Congo and Gabon. It

T

is also very strong in Asia where exports are surging to

he EU-28 chicken meat trade surplus is expected

the Philippines and Vietnam. Exports are also growing to

to increase in 2018 and 2019 in light of decreasing

Malaysia and Ukraine. This growth is mainly due to the

imports due to the delisting of 20 poultry plants

increasing export of price competitive bone-in parts (legs,

in Brazil that is not fully replaced by higher imports from

wings) and mechanically deboned chicken meat from the

Thailand and Ukraine. Exports are foreseen to extend their

EU-28.

growth in 2018 and 2019.

Thailand is forecast to become the largest supplier of chicken meat to the EU-28 in 2018, followed by Brazil.

In early May 2018, following an unsatisfactory oversight

European exporters are able to lower the prices for those dark meat cuts as they get a better price in domestic EU-28 markets for more expensive breast cuts and white meat. EU-28 exports of frozen cuts to Hong Kong are

audit, the EU-28 de-listed 20 Brazilian meat and poultry

expected to increase in 2018, fueled by consumer demand

processing plants from its list of approved plants eligible

in Hong Kong despite competition.

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Tiny Arab state fights back with homegrown poultry What do you do when your neighboring countries impose a land and sea blockade? You raise chicken. MPJ reports

economy and foreign relations, and leaving it stronger for the experience.

Officially, the reason for the blockade was that the Qatari monarchy supported Sunni Islamist terrorism and Iranian designs on the region, according to The New York

I

Times. Unofficially, the other Arab nations hated Al Jazeera

n June 2017, Saudi Arabia, the United Arab

news network, which was supported by Qatar, and

Emirates, Bahrain, and Egypt imposed a sea

wanted to pull the plug on this station that wasn’t afraid

and land blockade on the small, gas-rich strip of

to present them in a bad light unlike their own heavily

sand, Qatar. The country’s only land border is with

censored news.

Saudi Arabia and with Qatar importing about 40

percent of its food from the Saudi’s, it created immediate problems for the country.

Its citizens responded by stocking up on food and

Take out Qatar and you take out Al Jazeera. But it didn’t work out that way.

What helped the small nation immensely was its $340 billion in reserve funds which allowed it to cushion the

cash, while its diplomats and citizens in other Arab states

blow of the sanctions, find new trading partners, build up

scrambled to meet a 48-hour deadline to get out of town.

domestic industries, and build others from scratch, says

Few gave the Qatar monarchy any chances of surviving.

the NYT.

But, 18-months later, the peninsular Arab country has

Hassad, Qatar’s premier investor in the food and

still refused to buckle under and instead has adapted,

agribusiness sectors, has recently announced an increase

developing its poultry and dairy industry, retooling its

in production lines in its poultry, vegetables and fodder

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Hassad has increased the cultivated land since the beginning of the blockade to reach 8,000 tonnes of vegetables per year.”

Big build

A

l Rayan Poultry, a subsidiary of Qatari-owned Dar Al Rayan Investment Company, said in 2017 that its expansion initiative would revolutionize Qatar’s

poultry sector and boost local production.

“Through Dar Al Rayan Investment Company, we aim to contribute and be a part of (Qatar National) Vision 2030 by undertaking strategic projects that will support Qatar’s food security program,” said Sheikh Suhaim bin Khaled alThani, Chairman of Dar Al Rayan Investment Company. “Al Rayan Poultry will be an asset to the country’s future, as it is implemented with a special emphasis on positioning ourselves as the best poultry provider in Qatar and the whole region.”

The project has a production capacity of 70,000 metric tons (MT) of broiler meat and 250 million eggs per year.

Al Rayan Poultry dedicated more than 15 square kilometers of land for the project, spread across various

sectors to support the country’s food security efforts.

This announcement came on the sidelines of Qatar International Agricultural Exhibition 2018 (AgriteQ), organised by the Ministry of Municipality and Environment at Doha Exhibition and Convention Centre.

Mohamed bin Badr al-Sadah, Hassad Food CEO, says:

strategic locations covering the whole of Qatar, including the First Agro Cluster in the South and Al Waab farms, Al Dawoodiyah and Al Sidriya farms in the north.

In a major step to boost local production of poultry products in the country, Al Rayan Poultry undertook a parent stock project, which was introduced for the first

“We aim to support the country’s food security efforts

time in Qatar and now has the capacity to supply other

by expanding our local and international investments.

smaller broiler meat producers in the country as well. In

We conducted an in-depth research on the local market

addition, its feed mill production capacity exceeds 90

needs from the three sectors, developed suitable plans

MT/hour, covering the needs of other producers in the

and started implementing them to support in satisfying

country.

those needs.

“For the fodder sector, we increased the cultivated

Al Rayan Poultry engaged international consultants to undertake this project and appointed global

land in Hassad’s fodder farms to increase production up

technology providers for the supply and installation of

to 10,000 tonnes [MT ton] annually, as well as introducing

all the machinery. The project implemented the latest

new products such as ‘Alfa Alfa’.”

technologies and adopted the highest bio-security

In a statement, Hassad stressed that it has played a “major role in meeting the local market needs of fodder

measures.

Sheikh Khalifa bin Mohamed bin Khalifa al-Thani,

products at the beginning of the ongoing blockade”. The

vice-chairman of Dar Al Rayan Investment Company, said:

company had immediately provided fodder products to

“We want to make Al Rayan Poultry a unique project with

a number of poultry and livestock farms to ensure the

global standards that our country and its wise leadership

continuity of local production of milk and poultry, it said in

will take pride in. As such, we strive to set very high

its statement.

standards in terms technology, hygiene and operational

Regarding the poultry sector, the Hassad CEO says: “Production of the Arab Qatari Company for Poultry

standards."

Mohamed Hussein al-Ali of Al Rayan Poultry said: “Our

Production (Al-Waha) will reach around 16 million chicken

focus is not just to build a poultry farm, but to create

and 120 million table eggs annually. As for vegetables,

a whole ecosystem that supports the production of domestic poultry products. ”

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elsewhere in poultrY

Chinese chicken continues to recover

affecting US soybean imports to China and Chinese feed producers buying elsewhere, this could affect chicken prices in China this year.

T

he Middle Kingdom’s production of chicken meat

Challenges in Dubai

will continue to recover in 2019, growing 3 percent to 12 million metric tons (MT) due to cumulative

increases in white-feather, yellow-feather, and hybrid broiler production, according to the USDA. Although China’s numerous avian influenza bans on foreign suppliers has created a shortage of new genetic

A

series of factors including tempered consumer spending, a newly introduced 5 percent VAT, and traders lack of on-hand capital have caused

material for its poultry flocks, China has compensated by

challenges for the chicken meat market in the United

widely using forced molting, importing more grandparent

Arab Emirates. As a result, 2018 UAE chicken meat

stock from New Zealand, and developing a domestic

imports are expected to drop to 408,000 MT, almost

great grandparent breeding industry. Despite increased

two percent lower than 2017 volumes. In 2019, chicken

production, consumer demand for chicken meat will

meat imports are expected to increase modestly to reach

remain weak due to the plethora of substitute proteins on

415,000 MT as the UAE finalizes preparations for the

the market, growing less than 3 percent and still lagging

World Expo 2020.

behind pre-H7N9 outbreak levels.

Currently feed costs (which account for roughly 75

Local production accounts for approximately 10 percent of the UAE’s total poultry supply with the majority

percent of the cost of production) are low as China

of product imported from Brazil and the United States.

continues to draw down its grain stocks and soybean

Brazil remains the dominant supplier of chicken meat to

stocks at crushing facilities are at or above average levels.

UAE with approximately 72 percent market share.

Any significant decreases in the availability of corn and

Although the UAE federal government does not

soybean meal in China may have a depressing effect on

provide subsidies, the Emirate of Abu Dhabi gives

chicken meat production. With the US/China trade war

domestic poultry producers a direct subsidy equal to

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approximately 20-25 percent of the value of select feed

of 17 million tons, which led to a decrease in the price

purchases.

of feed. The low price of feed is expected to continue

Domestically produced poultry is generally marketed in the UAE as fresh or chilled. During summer months when tourism slows and UAE families travel outside the

improving the profitability of chicken meat production for the next two years.

In South Africa, disposable incomes, population

country, reduced consumer demand forces producers to

growth, dietary diversity and urbanization are some of the

freeze a sizeable portion of their inventory,

predominant factors affecting chicken meat consumption.

By law, all locally produced chicken must comply with

Meat consumption in South Africa has expanded rapidly

Halal slaughter requirements. Because hand slaughtering

in the past decade and while continued growth in meat

is the most common practice in the UAE and stunning is

consumption is projected in the

prohibited, many birds are left with broken wings,

coming decade, moderate economic growth will result

legs, or other injuries during the process. As a result,

in slower consumption growth relative to the past. Due

the grading quality and value of the birds suffer. Local

to the relative affordability of chicken meat, the growth in

industry reports nearly 15 percent of domestic production

chicken meat consumption is expected to outpace that

is subject to quality downgrades.

of the other meats over the next ten years. As poultry meat is relatively affordable and ubiquitous, it has grown

South Africa on the upswing

to be the most important protein source in the diet of the majority of South Africans.

T

he South African poultry meat industry is the

Russia consumers may struggle

country’s largest individual agricultural industry boasting a gross value of R44 billion (US$3.1

billion) and contributing 16 percent to the total gross value of agricultural products. Broiler meat production accounts for 90 percent of the chicken meat industry.

Although South Africa produces only 1.5 percent of

T

his year Russian chicken meat production is forecast to grow 1.2 percent to 4.78 million MT, according to the USDA. New processing facilities

are gradually replacing older less efficient operations.

the world’s chicken meat, the country’s poultry industry

Consolidation in the poultry industry continues to

is the major chicken meat producer in Southern Africa,

favor large companies that can access credit and can

accounting for close to 80 percent of total chicken meat

undertake major investments to improve productivity.

production in the region.

As its domestic industry recovers from bird flu, poultry

Russia's largest vertically integrated meat producer Cherkizovo Group has just closed the deal to acquire

imports are forecasted to increase marginally. Post

the poultry producer Altaisky Broiler from Prioskolie

forecasts that South Africa’s chicken meat imports will

agroholding for an estimated RUB 4.6 billion ($69 million).

increase marginally by 2 percent in 2019 to 525,000 MT.

Over the next two to three years, Cherkizovo intends

The recovery of the local chicken meat production after

to increase the production capacity of the poultry factory

the avian influenza outbreak and lower feed costs will

in the Altai Territory (western Siberian region) from almost

suppress the growth of imports. In 2017, the United States

60,000 to 100,000 MT of poultry meat per year.

exported 82,300 tons of chicken meat to South Africa, a

Throughout Russia, production overcapacity is

substantial increase of almost 250 percent from 2016 after

squeezing profit margins, however domestic consumer

a tariff-rate quota was negotiated.

demand for chicken meat remains stable, while exports

However, U.S. exports of chicken meat to South Africa

continue to steadily grow. Chicken meat consumption is

are not expected to increase substantially in 2018 and

forecast at 4.8 million MT in 2018 and 2019. This forecast

2019, as no major upward movements in the current

assumes no significant changes in macroeconomic

quota of 65,417 tons are expected.

conditions, however there are uncertainties heading into

Currently, poultry production is still recovering from the widespread highly pathogenic avian influenza (H5N8) outbreaks of 2017, resulting in the culling of 5.4 million

2019, which can affect Russian consumers’ ability to buy poultry, which includes turkey parts and whole duck.

The Russian government has announced an increase

birds. Around 4.7 million birds were culled in the laying

in the minimum retirement age. VAT taxes have also

sector and 700,000 birds in the broiler sector, which were

increased from 18 to 20 percent. Russia’s Central Bank is

predominately breeder stock.

currently forecasting annual inflation in range of 4 to 4.5

The South African poultry industry’s current recovery

percent for 2019. Animal feed costs are likely to remain

from avian influenza outbreaks will be boosted by the

high in the near future due to limited feed supplies and

relatively low-priced animal feed. In 2017, South Africa

the Eurasian Economic Union (EAEU) tariff on key feed

recovered from drought with a record high corn harvest

components.

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January~February 2019

47

i n s i g ht

poultry

The increased tax burden, pressure on consumer

commercial, including 24 million broilers and 8 million

income, combined with relatively expensive animal feed,

layers. “It is clear that the poultry sector has a huge

will likely continue to challenge the Russian poultry

potential in this country considering also the great land

industry in 2019.

availability to grow grain and soya for poultry feeding,” says Zootecnica.

God's plan for Tanzanian poultry

This project, along with a smaller one organized by Smith in Rwanda, are not without their controversy.

According to NPR’s The Salt, with USAID and the

F

ormer Tyson CEO Donnie Smith, along with Tyson

University of Tennessee, where he is a trustee, Smith is

and South African-based Irvine’s – Africa’s oldest

the driving force behind a $2 million program in Rwanda

industrial chicken producer – have started a project

called Feed the Future Tworore Inkoko, Twunguke,

to bring chicken to Africa and in the process, revolutionize

which means “Let's raise chickens and make a profit.” Its

food production on the continent.

immediate goal is to lift the incomes and improve the

According to The Guardian, Irvine’s $20 million parent

nutrition of about 750 rural farmers; if all goes according

stock production center will be by the end of next year

to plan, many thousands of farmers will follow the original

sending 500,000 fertilized eggs a weak to a hatchery on

cohort.

the Tanzanian coast, where millions of one-day-old Cobb

All, however, has not gone according to plan.

500 chicks will be sold to local farmers.

Instead, according to NPR, the effort is a textbook

The plan is that within a few years, they could be

example of what can go awry when experts arrive

rearing and exporting 40-50 million broilers a year to

in a distant place with good intentions and a solid

neighboring Kenya, Rwanda, the Democratic Republic of

understanding of what works in the US, but without much

the Congo, and other African nations.

grounding in a local economy or culture.

In a quote from The Guardian, Smith says: “I am a

“Rwandan farmers, for example, are more likely to

Christian. I feel a call to use my poultry background and

own goats than poultry, so they had to be taught to

put that to work. Poultry is the most efficient converter of

raise chickens. (Many had never eaten chicken.) More

feed to meat. If you want an impact on the poor, providing

important, this small, landlocked central African nation

them with high-quality affordable protein from chicken is

lacks the physical and economic infrastructure needed to

the best way.”

support a modern chicken industry.”

According to Zootecnica International, in Tanzania, the poultry sector is in its early stage, but poultry farming does play a major role in both urban and rural areas in

In Tanzania, there is worry that poultry raised on a large commercial scale will destroy small local producers.

Smith acknowledges that Africa has its challenges, but

terms of food resource and families income. The growth

sees poultry as one of the best ways the continent has in

of poultry farming has steadily progressed; the current

feeding itself over the coming decades.

chicken population is of 69 million birds, of which 37 million are backyard and the remaining 32 million are

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January~February 2019

“We know what the future is going to look like and this is it,” he says.

Meat Packing Journal

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INSIGHT

P O U LTRY

Evaluation of two different chicken catching methods Catching live poultry may lead to animal stress, injuries, and mortality. Could a simple change make all the difference?

MPJ reports

Broilers are carried inverted to the transport module, which is usually a container with several drawers where the animals are crated. The catching and crating process may cause stress, injuries, and mortality and hence, compromise the welfare of the broiler chickens.

The Humane Slaughter Association and EU’s “Animal

A

Transport Guides” (Consortium of the Animal Transport

the second being catching the bird under its abdomen

prolonged tonic immobility, which is a commonly used

and then carrying the bird in an upright position. While

measure of fear. If the birds are to be caught and carried

there is also a one-legged method, this is not permitted

inverted, several organizations recommend that the best

under Norwegian law so was not part of the research,

practice is to catch the birds by both legs.

Norwegian research team, headed by

Guides Project) recommend catching birds individually

Käthe Elise Kittelsen, has evaluated two

with a grip over the wings, in an upright position. The

different broiler catching methods used

same catching method is recommended in Brazil due

primarily to transfer birds from the poultry

to a reduced risk of injuries for the birds. Catching and

house to the transport modules.

carrying in an upright position can reduce handling stress,

The first method used was the more common two-

legged catch with the bird then carried upside down, with

measured as corticosteroid concentration.

In addition, handling in an inverted position leads to

Around four billion broiler chickens are kept for meat

according to Kittelsen.

As part of the study, broilers were inspected for broken

production in the European Union The number of birds

legs and wing fractures, as well as crating time, number

implies that injuries and poor welfare even in a small

of animals in crates, number of birds on their backs in the

portion of the poultry population affects a large number

drawers, and broilers dead-on-arrival.

of animals. Hence, reducing stress and injuries during

Kittelsen says that her study showed that the abdominal and upright method was faster and gave a lower and more consistent number of birds per drawer.

catching and carrying is of utmost importance, says Kittelsen.

Knowledge, skills and training of personnel involved

In addition, this method tended towards fewer wing

in handling animals are fundamental in improving the

fractures. “Catching is a critical phase in the pre-slaughter

welfare of commercial livestock. However, there is little

chain, and this study shows that the catching and carrying

scientific literature concerning different manual catching

method affects broiler welfare,” she says.

methods of poultry. It is, therefore, necessary to improve

It should be pointed out here that no method is perfect and Kittelsen also found faults with the upright method.

First step

scientific knowledge regarding how different manual catching methods affect broiler welfare. This knowledge can be used by the industry to ensure that catchers are trained according to best practice.

The aim of this study was, therefore, to assess the

T

he movement of birds is the first step in the pre-

effects of two different manual catching methods;

slaughter chain of broiler chickens. In this process,

catching by two legs or catching under the abdomen in

the broilers are transferred from the floor of the

an upright position.

broiler house into transport modules, which are then loaded onto vehicles for transport to the abattoir.

The catching process may be performed mechanically

The study was carried out under commercial conditions in one major broiler producing region in Norway (Trøndelag) with two flocks from two different

or manually. With commercial manual catching

farms enrolled. The two flocks were of different hybrids;

conditions, the broilers are commonly caught and carried

one flock was a conventional fast-growing type (Ross

by one leg, with three to five broilers in one hand and one

308), flock size 30,000 broilers, slaughtered at the age

or two in the other hand.

of 33 days and 1328 gram (mean carcass weight for the

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January~February 2019

Meat Packing Journal

P O U LTRY

flock, estimated live weight 2000 g) and the other flock

INSIGHT

It can be hypothesized that the actual crating

was a slower growing hybrid (Hubbard JA 787), flock size

process represents a larger risk for wing fractures than

16,800 broilers, slaughtered at the age of 44 days and

the carrying. This may explain the tendency for fewer

1539 g (mean carcass weight for the flock, estimated

fractures in broilers caught upright under the abdomen,

live weight 2300 g). Both flocks were mixed sex and

since this method had more controlled placements of the

fed ad-libitum. Both broiler houses were from the same

birds in the drawers.

manufacturer, had the same size and were equipped with the same ventilation system.

The study sample consisted of 3951 broilers from both

Workers who caught the birds found the abdominal catching to be more exhausting, since this method allowed fewer birds per catch and therefore more squats.

houses in total; 2010 caught by legs (1031 broilers from

The method’s physical load on the catchers may affect

the conventional hybrid and 996 broilers from the slower

crating time negatively if this method was performed

growing hybrid) and 1941 by upright (969 broilers from

in the entire flock, since prolonged depopulation time

the conventional hybrid and 955 broilers from the slower

may increase stress and time without feed and water.

growing hybrid). Both catching methods were evaluated

However, it must be noted that too rapid handling also

in both flocks.

may be detrimental to bird welfare, as this may increase

Catching the broilers under the abdomen in an upright position was a faster method, gave slightly fewer wing fractures and gave a more consistent animal density in

the risk of injuries, and as such, rapid handling by itself is not a goal.

It must be noted that both methods are likely to slow

the drawers, compared to catching broilers by two legs

down the catch rate compared to one leg capture and

and carrying them inverted to the drawers.

this may have economic implications for the industry due

As was mentioned, no one-leg catching was investigated, but catching by two legs seemed to give

to increased personnel costs.

The study was the result of collaboration between

more wing flapping than catching upright under the

Animalia, the Norwegian Meat and Poultry Research

abdomen. The results from both studies indicate that the

Centre, Norsk Kylling and the Norwegian University of Life

activity of the broilers during carrying did not affect the

Sciences, Faculty of Veterinary Medicine. It was funded by

prevalence of wing fractures.

Animalia and Norsk Kylling.

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51

i n n ovati o n

rendering

Specialize to tap high revenue markets The world’s rendering market continues to grow, but will you be part of it? MPJ reports

$33 billion on pet food and treats. Compared to 2017, this represents an increase of 5 percent or $1.5 billion.

Retail chains included local pet stores, nationwide pet store chains, big box superstores, vet clinics, e-commerce, and others, according to Nielsen in its

by velo mitrovich

report “An Uptick in Clicks and Bricks for Pet Food: An Omnichannel Perspective.”

I

In Asian countries such as Japan and South Korea

t can be argued that the National Renderers

which are experiencing a downturn in population,

Association (NRA) led the way for world

older people are turning to pets for companionship.

rendering by producing the book The Invisible

Due in part to soaring real estate prices and other

Industry in 1978, according to Tim Juzefowicz,

costs, it has become too expensive for city dwelling

president of the World Renderers Organization.

young people to start families.

“At that time, the rendering industry diligently

China’s pet food industry grew 6.3 percent in 2010,

serviced its customers by collecting raw materials

while increasing by 21 percent in 2017. With its 73.5

and producing animal protein meals, fats, and oils.

million pet owners, China’s pet food sales grew at an

Rendering was an industry serving society yet little was

even greater rate of 27 percent last year. While China

known about it by people outside the industry,” says

has about half the number of pets as the USA, its

the Australian.

population is four times larger, meaning that there is a

While renderers today are probably the world’s

huge potential for growth. Pet spending in China is now

most important recyclers, there is still much truth

around $25 million a year, with the majority for dogs

by describing it as an invisible industry – but not to

and cats.

bankers and to those renderers who see where money is to be made.

Fred Bisplinghoff, a Florida veterinarian and

The current trade war between China and the USA is hugely affecting the import of US pet foods in China, due to 25 percent tariffs and tight, bureaucratic

consultant to the US rendering industry told Beef

customs inspections. According to The New York Times,

magazine that the traditional markets for the three

last year China exported $148 million worth of pet food

major rendered products – fats and oils, proteins, and

to the States, it only imported $6.5 million back.

hides – are severely depressed.

“World commodity fat and oil markets have been

That said, the trade war won’t last forever and Chinese pet owners see imported pet food as being

under pressure because of the tremendous increases

safer than their own, thanks in part to what seems like

in palm oil produced in tropical regions,” he says.

near endless food and health scandals in China.

“Second protein markets are depressed – as indicated

For US, European, New Zealand, and Australian

by today’s soybean oil and meal prices – and hide

brands seeking to sell in China, establishing brand

markets…are now declining.”

equity while the market is in a state of rapid-growth

While MPJ has mentioned this repeatedly, as a

is likely to bring success, according to New Zealand’s

renderer you ignore the high-end pet food market at

Addiction Food which partners with companies to

your own risk. It is what you produce that goes to one

formulate, produce, pack and export premium quality

of the world’s fast growing industries.

pet food to the world’s fastest growing markets.

In the USA alone last year, pet owners spent nearly

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Meat Packing Journal

rendering

i n n ovati o n

Haarslev strainer separating bones and larger pieces of ashes

meatpacking.info

January~February 2019

53

i n n ovati o n

rendering

Optimize your equipment for optimal production As poultry, pork, and beef production figures continuing to soar, rendering production figures go hand-in-hand. The question is, will your equipment let you down or will you be able to cash in on this bonanza? MPJ reports

quality rendering equipment, parts and service to the animal byproducts and protein recycling industry. During this time, renderers have come to rely on Dupps’ in-depth process knowledge, that resulted in periodic consulting engagements to help them improve their processes in light of their challenges. With ever-increasing demands placed on renderers, Dupps has seen an increase in the

R

number of requests for consulting services – ranging from

faces a myriad of challenges and must be able to process

kinds of rendering machinery as well as commissioning

significantly higher volumes, while managing changing

entire rendering facilities, we’ve developed years of

customer expectations for higher quality products

accumulated and specialized experience that can help

and changing feedstocks that can negatively impact

improve nearly any plant — sometimes dramatically so,”

rendering processes, throughput and product quality.

says Ken Thomas of Dupps. This is especially true for

endering has taken place since primitive

entire plant evaluations to individual process equipment

man slaughtered his first animal and came

optimization engagements.

to the realization that the entire animal

“One of the most cost-effective things a renderer

could be used for something. It is still

can do to improve their plant’s efficiency is optimize the

about using all of the animal as efficiently as

equipment that’s already in place. Through its many

possible for maximum gain, but today’s modern renderer

years of designing, building, installing and servicing all

This high volume of material going through rendering plants, combined with the heat, steam, water, pressure,

older plants that may not be utilizing the latest product innovations or process control technology.

and harsh facility cleaning used in the rendering process,

“We have significant experience doing this type of

can take a toll on equipment. One person in the industry

consulting, but in the past, it has been done primarily as

joked with MPJ that at times a plant that’s only six months

part of new equipment installation, new plant start-up, or

old can easily look like one that’s six-years-old instead.

as part of major machine overhauls or rebuilds.

There has also been a change to how rendered

It’s been their experience that most customers,

products are perceived and used in industries ranging

both independent and integrated packer/renderers

from pharmaceuticals, edible products, pet food, animal

can, and have benefitted from Dupps’ deep process

feed, biofuels, and a wide range of other products.

knowledge. Even something as mundane as employee

If you want to maintain maximum revenue from your

turnover impacts the accumulated knowledge needed

plant, you need to spend the money on maintenance

to efficiently run a rendering plant,” says Thomas. In

and upgrades. This goes not only for older plants that

response to the challenges facing renderers Dupps has

can benefit from advancements in rendering equipment

begun to formally offer consulting services tailored to

and controls, but newer plants which need to be at peak

the needs of renderers who could benefit from changes

performance.

to how their Dupps equipment is operated. The most

For more than eighty years, The Dupps Company has been one of the worldwide leaders in providing high-

54

January~February 2019

common areas of improvement are: u Improved throughput: With changes to feedstocks –

Meat Packing Journal

rendering

or simply just increased demand — there is often required

i n n ovati o n

Servicing a Dupps' Supercookor

more pressed cake per hour than ever before. u Increased up-time: Plant or machine downtime is becoming even more costly, particularly in rendering departments that are part of a complete poultry, pork or beef processing facility.

an evaporator cooking system.

As those in the industry can tell you, this feed is notoriously hard to press; it’s a soupy material with a

u Reduced maintenance costs: Hand-in-hand

large amount of fine particulate material to be pressed.

with service improvements that increase uptime is an

This combination often makes material difficult to press.

opportunity to reduce maintenance costs via up-to-

Large amounts of fines can often be found in poultry (and

date, specifically tailored maintenance schedules and

sometimes pork) raw material in rendering.

regimens. u Improved product quality: Demand for less residual

Due to varying protein and fat percentages in the feed, coupled with variable feed rates, the customer was

oil in meal, as well as extracting more oil for sale, means

struggling to deliver a consistent finished product. The

there is value added in re-configuring pressing machinery

client approached Dupps with certain goals to improve

for optimal oil extraction. Similarly, rendering dryers can

their press operation. These three primary goals were:

be optimized for less moisture content. u Energy saving: Controlling equipment output rates precisely to given throughput demand can often reduce energy costs significantly.

A recent example of this was with a long-term US

u Reduce the residual oil in the meal u Reduce maintenance cost u Increase throughput In response, Dupps conducted a customized one week pressor optimization study. According to Ken

pork rendering client with a four-press operation that

Thomas, the Dupps field service team systematically

reached out to Dupps to improve the press results from

reviewed the pressor configurations and made multiple

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January~February 2019

55

i n n ovati o n

rendering

Above: Showing the size of a Dupps' Supercookor Right: A Dupps' pressor changes that allowed the client to achieve all their goals.

“A typical consulting engagement will have Dupps staff on-site for a full week, observing different shifts, and talking to the operations and maintenance staff along with the management team as well. It’s not enough that we go into a plant and observe with the Dupps hat on, we need to understand from the plant’s perspective how they operate,” says Thomas.

After completing the study and analysing the results, in this example Dupps was able to reduce the fat content in the meal by 1.5 percentage points – a 13 percent improvement. Even more importantly, meal and fat throughput was increased by 38 percent at the same time. The customer was very pleased with the results and realized a fast and substantial payback on their nominal investment in the Pressor Optimization Study.

As a result of the changes that Dupps made, the customer also achieved greater operational flexibility.

For example, if the plant was capacity constrained and looking to grow, the plant could take more business without adding capital equipment. The increased throughput equates to $640 added revenue potential

layer of protection with an idle press available should

per press hour at June 2018 meal and oil prices. If similar

operating conditions change in the future.

improvements were applied across all four presses at

“We take a take a holistic approach and provide

typical operating schedules, the customer could realize

the customer with a wide range of suggestions for

nearly $17MM/year increase in revenue opportunity.

improvement, many of which cost little to nothing to

Alternately, the plant could process the same amount

implement” says Thomas. “While individual results are

of material with a three-press operation. In this case, the

likely to vary since all rendering operations are unique, we

plant could save an estimated $55,000-60,000/year on

know how to help our customers “extract the most value”

maintenance and electricity costs, while having an added

from their Dupps’ investment.”

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January~February 2019

Meat Packing Journal

incredible power is waiting to be unleashed.

extra throughput, lower residuals, and count-on-it uptime you never knew you had.

With over 84 years of accumulated rendering system and process experience, the dupps Consulting services team will help you release the untapped performance that’s just waiting to get out of your cookers and presses.

“Just re-configuring our presses increased throughput for both meal and oil by 38%, and lowered the residual oil in the meal by 1.5 percentage points.”

The most cost-effective way to increase your plant’s efficiency and uptime — and improve product quality — is to optimize what you already have in place.

“It was eye-opening to learn from the Dupps staff about better operation and maintenance of the facility; we would definitely use the service again.”

Renderers are some of the most knowledgeable protein conversion experts around.

But an ever-changing operating environment can challenge even the best plants. A single call to Dupps can put you on the path to the best ROI you’ll find anywhere.

937-855-6555 or www.dupps.com The Tools To build a susTainable world

The Dupps Company

•

Germantown, Ohio

•

U.S.A.

i n n ovati o n

rendering

creating the rendering mind-shift Danish rendering equipment supplier Haarslev has been in business for over a century, reaching out far beyond its original roots. Today Haarslev has a strong global presence in six continents.

MPJ has asked Christian Luxhoj, Haarslev’s global innovation & marketing director, for his views.

Seafood and poultry are certainly major rendering markets, with the latter showing substantial potential.

From Haarslev’s perspective, we see supplementing markets in the bovine meat and pork segments too.

Again, with events Haarslev travels the world. From Haarslev’s perspective, which countries or regions are up and coming?

We have in the last few years seen a downturn in investments from Latin-America and Southeast Asia. We expect to see the regions improve performance again

One of the early founders of the modern meat processing line back in the late 1800s, looked at his Chicago plant and realized they were dumping ‘gold’ – the modern rending plant was born. Is there a mind-shift that needs to occur so you quit looking at by-products as waste and instead as income?

and with Haarslev’s focus in these regions, we expect to increase our market share.

When it comes to rendering, does poultry bring about special challenges?

The only added challenge with rendering poultry by-

Christian: Yes, a mind-shift still needs to occur – however

products is the additional fraction in the form of feathers.

it is taking place as we speak, with the ever-rising

Feathers can be processed into a protein rich digestible

realization that a sustainable and a circular view of our

feed ingredient, but requires a special process to become

planets resources needs to become reality.

so. Haarslev has several standard solutions tailored for a

Instead of simply throwing out leftovers from meat,

wide range of capacities which can realize this potential

poultry and fish production, rendering is a process that break this waste down into its constituent parts – including proteins, minerals, ingredients and fats we can use.

While rendering has been taking place since man slaughtered his first animal, does there seem to be increased professionalism within the industry?

With poultry plants bringing in processing equipment that can take 15,000 broilers per hour, is this changing how a plant deals with its rendering issues No. Haarslev supplies a vast range of choice, from small to gigantic, from simple to complex, from standalone equipment to complete lines and systems. The largest plants Haarslev has supplied equipment for can

Certainly, many of Haarslev’s customers are very

process more than 100,000 broilers/hour – a staggering

advanced in their approach to both the rendering process

and amazing figure. We can provide bigger systems if

and the equipment choices that we propose them. That

necessary.

said, there is also a very wide range in the business maturity of the industry operators in rendering industry.

This means we are able to deliver turnkey poultry rendering plants, engineered and configured for the exact needs of our customers.

In looking at the events where Haarslev has a presence, seafood and poultry seem to be the two main show categories. For rendering, are these the two major markets?

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January~February 2019

When Haarslev’s Global Services team visits rendering companies, is there anything that stands out that that most companies should be doing differently?

Meat Packing Journal

Haarslev provides equipment for the world's rendering industry

i n n ovati o n

rendering

By straining, a finer, higher quality meal product is obtained

Haarslev is vigilant to keeping up with the latest

producers and suppliers of rendered products into the

regulatory requirements for worker Health, Safety and the

pet food sector to make sure all criteria are met when we

Environment (HSE). In addition to that, we always focus

design our systems.

on advising our customers on recommended spare parts, preventive maintenance and production optimization for product quality and energy efficiency.

Is pharma-grade material an interesting side-line for most renderers or is there considerable profits to be made? Is it difficult extracting pharma-grade material from rendering?

The recent successful court cases in North Carolina against hog farmers and the smell of their farms effecting the quality of life for nearby residents seems to have sent shock waves throughout the industry. Is this something renderers need to be concerned about?

This is a very real challenge. Yes, Haarslev has focus on

Food grade or pharma grade products made from by-

and solutions for odor control to ensure that rendering

products are definitely interesting for processors to look

activities have minimal environmental impact. We

into. However, with requirements on traceability and

always strive to meet local legislation and need for odor

hygiene, it is products which are complex for renderers to

treatment.

produce. We find it more likely to be an area where we will

The pet food industry has changed dramatically over the last 10-years, with much higher quality ingredients and production methods. Does this require a renderer to take better care of the raw product before rendering?

In the UK, an 850-page environment impact assessment for a proposed animal rendering site includes a public access area at one end of the site which will provide opportunities and facilities for fishing, walking, cycling, and outdoor exercise. Is this a crazy idea or is this a brilliant way of getting a rendering plant accepted by a community?

This is certainly the case. Food-grade processing

It’s certainly a very creative idea! It addresses in its own

provides greater earning potential, but there are major

way that there is a need for the public to have a higher

differences from a traditional setup. Such processing

level of knowledge about how the reuse of valuable

involves, close-to-source access to fresh food grade

materials can make all our lives and the planet we live

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Fat Screw Press

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Poland’s poultry push In the September issue of MPJ we discussed Poland in generalities; in this second part we’ll talk poultry specifics.

Velo Mitrovich reports from Poland by velo mitrovich

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Poland became a EU member, which opened the European market to very competitive Polish producers.

Thanks to that, Poland is nowadays a structural poultry meat exporter, with 50 percent of poultry meat production exported,” he says.

To build confidence in the quality of Polish poultry products – both at home and abroad – the Polish National Poultry Council introduced QAFP, a country-wide quality

t’s a fact that few seem to believe outside of Poland

assurance program. To improve their competitiveness still

itself. In a 14-year period, the country has become

further, Polish poultry processors have invested heavily

Europe’s largest producer of chicken, passing

in new processing plants and new technology. But, a

France, the Netherlands, and the UK.

problem MPJ has seen firsthand is that processors seem

When MPJ has told this to most, the reaction has

been a jaw-dropping look of surprise. “Really? Poland?”

A number of factors have been responsible for this

success. The Polish poultry industry has taken full

to have doubted what their successes would be and no matter how large of new plants they have built, if funds were available they should have built them twice as large.

Besides Polish companies, all the world’s big poultry

advantage of its geographical position and the access

players seem to be in Poland as well, including Cargill,

to major European markets given by its EU membership.

Smithfield, Two Sisters, and Thailand’s Charoen Pokphand

Although most in the States and Asia see Poland as

Group, which deepened its presence in the European

an eastern European country, don’t say that in Poland

poultry market by purchasing a 33 percent stake in

where you will be instantly set straight. Poland is a central

Poland's SuperDrob Capital Group for 49.5 million euros

European country, with many of its chicken processors

($51.6 million). The only world leader that doesn’t have an

located in the western part of the country, making them

obvious presence is Tyson.

closer in distance to Berlin than to Warsaw. This enables

Poultry growth has been spectacular, from just

its plants to deliver fresh poultry throughout most of the

620,000 tons when Poland joined the EU in 2004 to 2.8

EU, as opposed to frozen, allowing supermarket groups

million tons in 2017. Exports, largely to other EU countries,

and wholesalers to easily further process the meat.

account for half or more of production and have increased

“In my opinion, a combination of very high competition

fourfold in the last 10 years. Besides chicken, Poland is a

between poultry meat producers in Poland has resulted

major producer of turkey meat and some are predicting

in acceptance of very low margins, with relatively low

what Poland has done with chicken, it will do the same

labor costs,” Marcin Rucinski, area sales manager for

with turkey. Poland has already overtaken France in the

Meyn Poland, tells MPJ. “The result in the cheapest

production of turkey; only German is ahead.

chicken meat from Poland within the whole EU – this

Poultry meat production consists mainly of chicken

was for years the biggest trigger for export growth of the

broiler parts (85 percent) and turkey (14 percent), both

Polish poultry sector.”

of which are used by the domestic meat processing

Rucinski explains that there were pre-accession EU

industry. Duck and goose meats are produced on a

subvention programs, like SAPPARD, which helped

smaller scale and are exported mainly to Germany and

processors to upgrade their equipment to the latest

other countries in Western Europe, as well as supplying

standards. The program also helped improve the

local markets. What Polish cooks can do with duck is a

country’s infrastructure, such as highways, which aided

taste experience that should be on everyone’s bucket list.

the growth of the industry and helped provide a good investment climate for the poultry industry.

“But there is one main reason [for Poland’s growth]:

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USDA Gain Reports forecasts that 2018 poultry production will grow by two percent over 2017. The anticipated slower growth rate in 2018 is due to expected

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lower domestic prices for poultry meat and declining

to 70, 260 MT, an increase of 285 percent. Poland is not

export demand.

the only EU poultry producer using Africa as a sponge to absorb this surplus of dark meat. Unfortunately, these

Who's got the hand?

cheap imports are hurting the development of the local poultry industry. While some countries such as Nigeria

M

have banned the imports, it is actually easier and cheaper

uch of Poland’s chickens are raised on privately

to buy black market poultry in Nigeria then locally grown

owned farms, some of which have contracts to

and processed.

supply with the major processors, others sell on

Birds are fed on locally produced grains (mainly corn)

the open market. The best way to explain this relationship

and 2.0 million metric tons (MMT) of soybean meal,

between grower and processor is from an episode of the

imported mainly from South America or the United States.

1990s US comedy show Seinfeld. In one episode, George

Local consumption

Costanza explains to the gang the importance of “Hand” in a relationship – who has the upper hand and how this can bounce back and forth.

Poland’s growers and processors seem to be playing a perpetual game of “Hand”, with each constantly trying to get the upper hand. Growers will cut back on production,

L

ast year Polish poultry meat consumption reached around 30 kilograms per capita, almost three percent over 2016. Poultry meat remains the

driving up prices. But, then when they increase

cheapest animal protein on the Polish market, which

production to take advantage of these prices, with the

stimulates demand. In addition, it is seen as being

glut on the market, the processors drop what they’re

healthier than pork or beef – although Polish consumers

willing to pay.

prefer pork.

One producer tells MPJ: “An increase in Polish

Since 2013, poultry meat retail prices have trended

slaughterhouse production leads to a demand for more

downward, with a few minor spikes last year increasing

chickens from farmers. Their increase production leads to

the price by only 0.3 percent. However, through August

a demand for more slaughtering.”

2017, poultry meat prices increased by 0.3 percent over

Regardless, the Polish poultry industry is highly integrated and export oriented and it’s expected that 2018

the same period in 2016.

The Polish meat processing industry is also producing

export growth will continue due to expanding demand

poultry sausages and pâté to imitate pork products. USDA

from intra-EU and Asian markets. Although the majority

forecasts that this year poultry consumption will increase

of exports are directed to the internal EU market, the

by two percent because of higher production and lower

industry is trying to open new market opportunities,

retail prices. Poultry meat constitutes 38 percent of meat

including the USA.

consumed in Poland, compared to 53 percent for pork

Major markets within the EU are the United Kingdom, Germany, France, the Netherlands, and the Czech Republic. The Ukraine, Hong Kong, and China are the main markets outside of the EU. Polish Agriculture and Rural Development Minister Jan

and only three percent for beef. Consumption from backyard flocks constitute 6.4 percent of total consumption.

Polish imports of poultry meat mostly consist of chicken and turkey cuts from Germany, Slovakia, and the UK. In 2016, imports were valued at about $95 million, a

Ardanowski announced recently that Poland and China

20-percent increase over 2015 because of higher frozen

have cut a deal to export Polish chicken to China.

chicken-cut imports from Germany and Slovakia.

Łukasz Dominiak, the representative of the National

One thing that MPJ has noticed in Poland is a lack

Poultry Council, said that this agreement is a “milestone

of freezing facilities and processors set-up to produce

for Polish-Chinese relations.” He added that it concerns

value-added poultry products. Instead, they ship raw

eight processing plants which are eligible for export.

material to other countries for further processing.

The export of Polish poultry to China was banned

Real growth or bubble?

in December 2016, due to the epidemic of avian flu.

Although Poland was acknowledged as a country free of this disease in 2017, the reopening of the Chinese market required months of efforts. Before the ban, Polish poultry farmers exported 12,400 tons of chickens to China.

Poland is also targeting sub-Saharan African for dark chicken meat, which is less popular in Europe. According

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ill Poland be able to maintain this growth, that’s the question, with no defined, setin-stone answer. Labor is a major issue in

Poland, which is effecting the industry, with many plants

to EC Market Access Data, in 2010 Poland shipped 18,249

having 40 to 50 percent foreign workers. As the last issue

metric tons (MT) to the region. By 2016, this figure rose

of MPJ explained, while Poland’s rise in poultry has been

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staggering; so too has the number of Poles who have

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At one plant, MPJ could see that the equipment was

immigrated to other EU countries, in particular, the UK.

split in half. Meyn was used in the initial slaughtering and

While the Polish government is hoping that the UK’s

processing, while Marel, Cabinplant, and Multivac were

leaving the EU in March 2019 (Brexit) will drive workers

used in deboning, weighing, and packaging.

back to Poland, the UK government has already said

According to Rucinski, newcomers/prospects who

those who have established themselves in the UK can

build greenfield plants are mostly looking for wall-to-wall,

stay. In addition, with the UK out of the EU, this will cut

fully integrated and equipped with management tools (IT

into Poland’s massive EU subsidies – the largest in the EU.

systems).

With the shortage of workers, unemployment is

“Existing processors usually split an investment

around five percent – although most will tell you it’s

process in steps over years, making their choices

lower – and Poland’s government has recently cut deals

independently,” he says. “But big players look a bit further,

to make it easier for Vietnamese and Filipinos to work in

searching for integrated processing process with tracking

Poland (it has made it clear that it does not want Muslim

& tracing which can be easier provided by one equipment

refugees or economic refugees from sub-Sahara Africa).

supplier.”

MPJ, though, believes that going further and further afield

Poland’s major plants have the capacity to process

to find cheap labor is not the answer for the long-term

around 1.2 million birds a week. Plants operate with

and poultry processors need to turn their plants into

around 500 to 600 staff, with are normally split into two

the most modern and efficient in the world. Equipment

shifts of nine hours, with six hours reserved each day

manufacturers Meyn, Marel, Baader, and local company

for cleaning, running six days a week. To make sure its

DrobTech have solutions, but will the Polish industry act

product can reach European markets as fresh as possible

before it’s too late?

by truck, some plants start their day at 2100.

Workers from its once source of cheap labor, the

Around 85 percent of Poland’s production goes to

Ukraine, now go elsewhere in the EU – chasing better

exports, with the remaining 15 percent staying for the

wages – and the country is beginning to build its own

local market. This market was insignificant 10 years ago,

poultry industry. Indeed, MPJ suspects that if the Ukraine

but is getting more important as Poles look at chicken as

was not involved in a lengthy armed dispute with Russia

a healthier source of protein.

along its eastern border, it might already be a threat to Poland’s chicken dominance.

During the first half of this year, Ukraine's poultry

In plants that MPJ saw, we were impressed by the product flow inside the plants which is highly efficient, allowing for their speed. That said, the one hold up is

exports to EU have increased substantially, according to a

the placing of the stunned birds onto the shackles, an

statistical report presented by the European Commission.

operation that no equipment manufacturer has yet to

The volumes of poultry meat exported in the EU have

figure out how to do without human labor. While there is a

increased by 80 percent compared with the first six

huge interest in Poland for Meyn’s 15,000 bph system, no

months of 2017, reports Ukrinform.net.

matter how fast you can potentially go, you will always be

Ukrainian enterprises exported 62,285 MT of poultry meat to the EU becoming the third largest poultry supplier in this market.

MPJ assumed that as the big players continue to

limited by your slowest link.

Poland’s processing plants work hell-bent in just meeting customers’ demands for boned/skinless birds, with very little value-added product produced in Poland.

growth, there are fewer and fewer small producers every

As mentioned earlier, there appears to be a good

year in Poland. However, Marcin Rucinski disagrees.

opportunity for value-added to be added to Polish plants.

“To be honest I can’t recognize such a trend. When

Will Poland continue to lead the EU and expand

I look back we had ca. 200 poultry slaughterhouses

even further? While the Ukraine seems to be watching

in Poland in the beginning of 2000, while around 180

from the wings, examining closely Poland’s operation,

slaughterhouses in 2008 and exactly 168 slaughterhouses

Poland being a member of the EU will always give it an

registered right now. While some poultry experts have

advantage over non-EU states. Despite, too, people’s

been claiming – for a decade – that consolidation of the

mindset that Poland is an eastern European country, the

market is the only and right way, I can’t see it happening

fact is it is a central European nation, and is in a prime

yet,” says Rucinski.

location to easily reach numerous markets across Europe.

Almost all Polish poultry is sold as parts, with very

As mentioned, the labor issue could be the Achilles

little whole birds, and processing lines are set up for

heel of the Polish industry. MPJ believes that looking

this market. Like everywhere in the poultry world,

further and further afield to find workers for poultry plants

Polish processors are looking for processing equipment

is a mug’s game and is a temporary fix at best. Polish

which can provide high speed/production volume in

plant owners need to accept this reality and become the

combination with high yield/performance.

world’s leaders in plant automation and robotics.

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Poland beyond poultry Poland is far from being a one-trick pony when it comes to protein production, with a strong pork tradition. by velo mitrovich

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The other key export markets for Poland’s pork producers are Germany and Italy and this trade has also increased sharply over the last decade. On its non-EU markets, unlike other exporters, trade with China was negligible in 2015 and 2016 although Poland does ship significant volumes to Hong Kong which amounted to 39,000 MT. [Due to the porous nature of the HK/mainland

long with poultry, Poland’s pork and beef

China border, MPJ is always skeptical of HK’s figures and

production continues to rise, although

as to whether product actually remains in Hong Kong.]

not to the same extent as poultry. For the

However, Poland’s exports to non-EU markets have

internal market, pork is extremely popular.

fallen sharply compared with 2013 with the loss of most

The country does not have a tradition

of its trade with Russia, Ukraine, and Belarus due to trade

of eating beef and there does not seem to be much

embargos between the EU and Russia.

motivation to expand production.

Inventories up

As the world’s hog producers know only too well, disease – in particular African swine fever (ASF) – and politics can ruin the best laid production plans and Poland has experienced both. In looking at USDA and EC predictions over the last 10-years, Poland’s pork export window seems to get slammed shut just as soon as it opens wide.

Indeed, the USA has recently suspended imports of

I

n January 2017, swine inventories were five percent higher over 2016, according to the USDA FSIA Gains Report. Farm-gate swine prices recovered in June

2016 and favorable feed prices drove swine-inventory growth during the second half of 2016 and first half of

pork from Poland due to the outbreak of ASF in Warsaw

2017. Higher farm-gate prices for hogs during the second

and eastern Poland, although by the time this goes to

half of 2016 and first eight months of 2017 reflected an EU

print, the restrictions might have been lifted.

wide trend, which was driven by reduced slaughter and

USDA officials said they are reviewing Poland’s export

higher demand in China. Post estimates that farm-gate

protocols after finding one facility there shipped pork

prices for hogs will decline during the last quarter of 2017

to the United States without following requirements

because of high domestic stocks and reduced export

designed to prevent the spread of serious livestock

demand. Last year in 2018, swine inventories continued to

diseases. A second Polish facility is also being reviewed.

grow, albeit at a slower rate because of stabilizing farm-

In additions, the USA’s Customs and Border Protection staff are enhancing the screening of passenger bags

gate swine prices.

Pork Production Post said pork output in 2017 was

coming from Poland for pork products. The checks aim to

186 million MT, a one-percent decrease from 2016.

ensure restricted products are not brought into the States.

Higher pork production during the second half of 2017

The UK is the largest export market for Poland and in

did not offset the reduction experienced during the first

2016 shipments amounted to 82,000 metric tons (MT)

six months of 2017. Pork production then grew in 2018

product weight (excluding pig offal) and trade has tripled

because of higher inventories and higher slaughter.

since 2007. The majority of this consists of processed

Consumption per capita pork consumption in 2017 was at

products, including bacon, which the UK’s sizeable Polish

41 kilograms, almost unchanged from 2016. Post expects

immigration population buys. At the same time Poland

that once final figures are in, they will show that pork

has also emerged as a significant market for UK exporters

consumption in 2018 grew because of higher domestic

and trade amounted to over 28,000 MT in 2016.

production. Pork meat and related products make up over

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50 percent of total meat consumption in Poland. Polish

to Italy and the Netherlands within the EU, and Bosnia &

consumers prefer pork over beef and poultry meat, which

Herzegovina outside of the EU. It is estimated that when

stimulates imports.

final figures for 2017 are in, they will show that exports of

Despite exporting pork, Poland remains a net pork

cattle in 2017 has decrease in comparison to 2016 due

importer. Around 70 percent of total 2016 pork imports

to growing interest among Polish farmers in raising beef

(633,000 MT) came from Belgium, Germany, and

cattle. During the first six months of 2017, Poland exported

Denmark.

28,946 live calves, a 36-percent decrease from the same period in 2016. In the same period imports of live cattle to

Beef production

Poland decreased by four percent.

In 2016, average annual beef consumption amounted

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to 1.3 kilogram per capita, up from 1.2 kilograms per capita

olish cattle inventories in January 2017 were 5.97

in 2015. Domestic consumption of beef in Poland remains

million head, a four-percent increase over 2016.

low due to high prices and cultural preferences for pork.

Higher milk prices during the second half of 2016

Polish consumers often substitute beef with cheaper (and

and first half of 2017 decreased dairy-cow slaughter.

The increase in the overall cattle herd is also attributed

perceived as healthier) poultry meat In 2016 Poland imported 23,567 MT of beef mainly

to growth in beef cattle production. In January 2017

from Italy, Germany, and Ireland. Beef is imported from

inventories of dairy cows amounted to 2.1 million head

within the EU and used mainly for processing. Imports of

and were unchanged compared to January 2016.

high-quality beef are limited because of high prices and

Continuing interest in beef cattle and improvement in

the lack of a steak-eating tradition. However, demand for

farm-gate milk prices further stimulated cattle inventories

high-quality beef imported from the Unites States (via

in 2018.

German middlemen) and from South America is growing.

Poland has become a net importer of cattle following a

High-quality beef is mostly distributed through hotels and

25-year run as net exporter of fattening calves to Western

high-end restaurants. Italy, Germany, the Netherlands,

Europe. Indeed, Polish farmers may begin to focus more

Spain, and France were major importers of Polish beef

on fattening cattle domestically instead of exporting

within the EU, while Israel, Bosnia & Herzegovina, and

calves to Italy or France. Poland exported cattle mainly

Turkey were the major buyers outside of the EU.

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Meyn’s worldclass factory A visit to a Polish manufacturing plant is a view of efficiency. MPJ reports from Poland by velo mitrovich

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is an issue due to the massive Polish migration of skilled workers.

“It’s getting harder in Poland to find specialist workers, such as those who can weld stainless steel,” says Karas.

“We have a close relationship with a local technical school. Students come in for experience and we observe and offer jobs to the best. We’re taking a very long term

ast year Meyn finished the expansion project

view to staffing, and we’re looking for people who want to

of its manufacturing plant in Lebork – close

work here for years.”

to Gdansk on the Baltic coast – and its size

Staff are arranged in teams and MPJ observed one

reminds MPJ of Boeing’s plants in Seattle.

team coming on. Before work begins, a small meeting is

The plant now has 10,375 square meters of

held where the team leader goes over the targets for the

manufacturing halls and around 1500 sqm of new office

day and as a team, they try to anticipate any problems

space.

they might have.

The Lebork plant is one of four which Meyn has, with

What impressed MPJ was that it gave the workers

additional ones located in Italy, the Netherlands, and the

a real sense of where they fitted into the big picture. A

USA. Plant manufacturing is not specific for the country it

worker just wasn’t turning a bolt, but her/his actions were

is in, but instead product/parts orientated. Lebork’s main

producing a piece of equipment, which would then be

product is currently Meyn’s drawer system and controlled

shipped to ‘X’.

atmosphere stunning system. The plant is on track to have this portfolio expanded soon.

Tailored solution approach

Dariusz Karas, managing director of the Polish Meyn facility, tells MPJ that the modernization of the plant doubled floor space and supports the most efficient production flow and significant waste reduction.

“The new layout offers a more open and transparent work environment, which in turn stimulates teamwork and cooperation,” he says.

MPJ has been in ultra-modern German plants and if it wasn’t for the fact that Polish was being spoken,

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ith increasing demand, driven by domestic consumption and export, Polish producers tell MPJ that they are seeking

more sophisticated equipment that can process broilers quicker, achieving higher levels of quality and performance.

Meyn is offering them a highly flexible, competitive

Meyn Lebork would seem completely German. Despite

solutions from live bird handling to deboning at the

manufacturing going on, the plant was spotless and there

maximum capacity available in the market. These

seemed to be real thought and logic as to where material

solutions will boost the processor’s market position and

would be stored and its flow to manufacturing positions.

ensure their business continuity, leading to a significant

The plant has a staff of 185, split into two shifts.

labor reduction.

Sometimes a third shift is added for additional CNC

One system of Meyn’s which has caught the eye of

or welding. [CNC machining is a process used in the

Polish producers is its High-Speed line. This allows a plant

manufacturing sector that involves the use of computers

to move at 15,000 broilers per hour (bph). Meyn tells MPJ:

to control machine tools. Tools that can be controlled in

“In response to the growing demand for even higher line

this manner include lathes, mills, routers and grinders.

speeds, Meyn has upgraded its machines with innovative

The CNC in CNC machining stands for Computer

solutions to process chickens quicker, achieving high

Numerical Control.] As everywhere else in Poland, staffing

levels of quality and maximize yield. From live bird

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Meyn’s drawer and controlled atmosphere stunning system stunning system

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handling to chilling, all Meyn equipment is now tuned to

High speed systems are what customers want

the new benchmark of 15,000 bph.”

While MPJ has seen before high speed components in red meat and poultry plants, the problem has always

running above 13,500 bph, and this is the logical next

been that a line can only move as fast as its slowest

step.”

component. Meyn claims that with its new high-speed line, production can move at this speed.

Just increasing line speeds is not enough, that’s why

Furthermore, higher line-speeds mean more processing activities per hour. In theory, this would result in shorter interval times between the sharpening or even

new versions of existing evisceration equipment are

replacement of knives. Meyn has further improved the

implemented with 20 units in a 240o frame (instead of the

durability and quality of all cutting blades to reduce

normal 180 degrees), allowing for longer processing time

maintenance and maximize uptime. Moreover, in some

in each machine. The new 240o machine design matches

modules the blades have changed from smooth to

high speeds with superior product quality and maximum

serrated cutting edges, resulting in an up to four times

food safety.

longer durability.

“Customers are looking to increase their production

Other innovations by Meyn to run a processing line

speed while also reducing waste and quality defects.

at 15,000 bph are the new Meyn Carousel re-hanger

The new 240o frame enables us to meet customer

M2.0 and the new Meyn Line weigher M2.0. For further

expectations and help them to achieve further

processing after chilling the Meyn Physic and Flex M3.0

efficiencies,” said Pete van Poorten, Product Manager

cut up lines are updated to match the 15,000 high-speed

Meyn. “Many of our installed systems have already been

lines with exactly two cut up lines.

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Polish chicken, turkey, duck, and goose – Marel supplies to all Like other leading chicken processing equipment manufacturers, Marel sees Poland as a major success story. MPJ and Marel report

become a common sight on Poland’s roads.

The Stork Nuova automatic evisceration and giblet harvesting system has established a reputation for itself, both for the clean, hygienic way in which it works and for its ability to harvest high yield, high quality edible giblets with a minimum of labor, says Marel.

by velo mitrovich

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Marel Poultry equipped plants are also using the very latest IRIS computer-controlled quality assessment systems and the latest SmartWeigher product weighing

ith its population of almost 39

technology. Together with Innova PDS software these

million people, Poland is the sixth

valuable tools help processing plant management make

largest in the European Union.

the best possible return from each product.

Traditionally, culinary Poland is best known for its vodka and

delicious sausages made in a truly huge number of

Automatic line to line transfer, Marel end-ofline equipment and Marel Poultry software give full traceability throughout the process.

varieties, largely from pig meat. In recent years, however,

Deboning

and particularly since accession to the European Union in 2004, Poland has become known for another kind of meat, poultry.

Poland’s poultry industry is now the leading poultry producer in the EU. Growth has been spectacular, from just 620,000 tons at the start of the new millennium to 2.8 million tons in 2017. Exports, largely to other EU countries,

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s elsewhere in the EU, Poland’s processors cut and debone a high percentage of what they produce. Large volumes of breast fillet are

consumed domestically and also exported. Stork breast

account for a third of production and have increased

deboning systems have become one of the industry’s

fourfold in the last ten years. Besides chicken, Poland

standards in Poland. The market boasts well over thirty

is a major producer of turkey meat. It is also well known,

AMF breast cap filleting systems and a number of FHF-

particularly in Germany, for its high-quality goose meat

XB high-yield front half deboning systems. Some plants

products.

boast up to four AMF systems working side by side with

A number of factors have been responsible for this success. The Polish poultry industry has taken full

the capacity to fillet close to 15,000 breast caps per hour.

Although most Polish AMF systems are producing

advantage of its geographical position and the access to

skinless half fillets with tenderloins attached, the system

major European markets given by its EU membership. To

will produce a large variety of other breast fillet products,

build confidence in the quality of Polish poultry products

whole or half, skin on or skinless. If required, tenderloins

both at home and abroad, KRD, the Polish National

can be harvested separately and their tendons trimmed.

Poultry Council, introduced QAFP, a country-wide quality

Recently installed AMF systems include breast tendon

assurance program. To improve their competitiveness still

and cartilage harvesting modules. These allow the

further, Polish poultry processors have invested heavily in

recovery of potentially valuable cartilage as well as those

new processing plants and new technology.

last grams of meat and tendon from the keel bone.

Marel Poultry believes it has played a significant role

Polish users say they are enthusiastic about the

in the industry’s rapid growth and all major Marel poultry

system’s latest PLC controls, which allow different

processing systems are now in everyday operation in

module settings to be stored for different breast cap

Poland.

weights. These make light work of adjusting the system

Marel’s GP live bird handling systems, the first of which

when weights change. This is done by activating a menu

was installed over 10-years-ago, are in use with a number

on the touch screen. All module settings are changed

of Polish processors. The system’s containers have

automatically and filleting can restart immediately. Users

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Meat Packing Journal

poland

can, therefore, be sure of hitting the highest standards of

co u ntry

fo cu s

A Marel system in operation

yield, quality and product presentation regardless of the weight of breast cap being handled. in Warsaw. Together with specialized technical and

Wingsticks

technological back-up from Boxmeer in the Netherlands, Marel Poultry is keen to provide its many Polish

W

customers with the very best in support, allowing them to

ith the number of systems sold now running

take full advantage of Poland’s rapidly growing reputation

well into double figures, Marel Poultry’s

as a reliable supplier of quality poultry products.

ACM-NT high speed cut-up system has put

down strong roots in the market. Systems are equipped

Cedrob Ujazdowek double up

with a wide range of modules giving users optimum flexibility in the poultry cuts they can offer domestic and export customers. Part of this is the first installation in a Polish processing plant of the ACM-NT wingstick module.

This innovative module cuts off the inner wing joint with a bone 'handle' attached, making it an ideal chicken snack.

Marel Poultry recently commissioned the first ACM-NT

C

edrob is a family-owned business and is completely vertically integrated. It has three processing sites and processes chicken and

geese. The company produces a wide range of fresh, frozen, raw and further processed products. The

system to work on ducks at AMI, Poland’s top exporter

continuous improvement of all processes and the

of goose meat products and a leading duck processor.

optimum use of resources are key concepts for the

The system, currently cutting 4,000 ducks per hour,

business.

includes the JLR anatomic leg module. Consistently high

At the end of 2012, Cedrob commissioned its

yield, excellent skin cover and perfect presentation are

brand new, state-of-the-art broiler processing plant at

hallmarks of legs produced by the module.

Ujazdowek, not far from Warsaw. The plant was designed

Marel Poultry has a fully staffed corporate office

meatpacking.info

to handle up to 12,000 broilers per hour with all primary

January~February 2019

73

co u ntry

fo cu s

poland

and secondary processing equipment from Marel Poultry.

Cedrob has used Marel throughout its plant

Very soon a second 13,500 bph plant was commissioned alongside the original plant, which will give the plants a capacity of 25,000 bph. Once again,

the ability to batch whole products into standard weight

all primary and secondary processing equipment was

15 kg cartons.

supplied by Marel Poultry. A second GP containerized live bird handling system was installed too; giblets

Products will be cut on an ACM-NT cut-up system; breasts will be deboned on AMF-BX FlexControl systems.

are harvested fully automatically by the Stork Nuova

One noteworthy feature of the Cedrob Ujazdowek

automatic evisceration and giblet harvesting system.

extension is that, after breast filleting, output from the

Cedrob saw the first installation in Poland of the Stork

new line will join products coming from the existing

PureSine electrical stunning system. This stunner, which

factory to give optimum flexibility in the assembly of final

conforms to the latest specific EU regulations concerning

product packs. For optimum shelf life, particular care has

stunning, uses AC current formed into a perfect sinus over

been taken to ensure that products move smartly through

a wide range of frequencies. With this system processors

cutting, deboning and packing departments to the cold

can choose the frequency best suited to their particular

storage.

needs, allowing stunning to be done effectively and humanely at all times and on all product weights.

After chilling, products are weighed and graded

Packed product is checked for metal, weighed and labeled using Marel end of line equipment. Innova software follows each product through the process and

for quality using the latest Stork SmartWeigher and

ensures that information on each box, crate and pallet

IRIS technologies. IRIS grades the back and front of

is captured and made available to plant management in

each whole product and its anatomic portions. The

clearly presented reports.

SmartWeigher incorporates sophisticated control

In short, Marel’s responsibilities at Cedrob Ujazdowek

techniques which allow products to be weighed

begin on the growing farm and end only when finished

extremely accurately at the highest line speeds. One

product has been placed on a pallet and is ready for

feature offered by the new system and its software will be

dispatch.

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Meat Packing Journal

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I n n ovati o n

food

safety

Where innovation and food safety meet For over two decades MPJ has seen how the commercial fishing industry uses ultra-tough plastic containers and tubs to harvest, store, and transport seafood in harsh weather and heavy sea conditions that put material and employees to the test. But, we have seldom seen the same usage in meat/poultry plants, that instead rely on either flimsy plastic containers, cardboard, or dangerous and difficult to work with steel bins. We have teamed up with Saeplast – which every fisherman knows – to prepare this report.

product to move your valued food around? u Do you use corrugated gaylords on top of wooden pallets with plastic poly bags inside? u Do you use heavy steel bins and buggies that are difficult to move, sanitize, repair, and are a danger to your employees? u Are you using plastic single wall products that are easily broken and have crevices that harbor bacteria that prove unsafe for your employees and your food product? u Do you utilize one-use poly bags in your process that have become a necessary cost for your operation?

If you answered 'yes' to any of these questions, you need to look at alternative ways to contain your quality and be food and employee safe. With the cost of replacing broken product each year, along with the purchase of new items for operational needs, a closeup review needs to be taken at this constant cost

N

expenditure.

ot all material handling options are

With sanitation issues, pathogen contamination,

meeting all your needs for food and

constant breaking and associated foreign particle risks,

employee safety.

there is no wonder that plastics are becoming the

The road to assuring to our customers

that we meet all their food safety

standard in processing plants. However, not all vats, containers, pallets and buggies are the same. Yes, they

demands intersects with employee safety and controlling

are all material handling vessels, but all have drastically

costs. The road comes to a common point. There is a

different impacts and risks associated with each of them.

delicate balance where we need to focus to meet all

For these reasons MPJ and Saeplast would recommend

three effectively. It becomes a company’s daily emphasis

a material handling audit of your facility before your next

to be able to offer its customers the most food-safe

purchase.

quality products while keeping the health and welfare of

Unfortunately for many processing companies, it’s the

its employees in check with the demands of the costs of

procurement and accounting office bean-counters who

processing.

decide what type of material handling products to buy

Have you really looked at the material handling aspect of moving your valuable protein product within the plant?

Unfortunately, many today simply try to minimize costs

and not the quality manager, plant manager, or complex manager.

Understandable, anyone who looks at figures all day

as much as possible while keeping food safety top of

or simply looks at lowest transactional cost is in for some

mind. But then the employees suffer. Almost always,

sticker shock. However, when a customer plans on using

the cheapest material handling vessel is the low-priced

a product repeatedly, the product needs to be considered

option chosen from a short-term transactional point of

an asset – something that is owned by and gives value

view. But, it doesn’t check all the boxes for maintaining

to the company – and not an expense. Because of this,

food safety or being the most user friendly for your

the return on investment needs to be the key driver – not

employees. Most times the inexpensive option doesn’t

the initial cost or transactional price. For example, figuring

stand up to the long-term cost of acquisition and payback

that a cheap injection molded plastic container costing

that you require.

$400 will need to be replaced every one to two years –

u Have a look around your plant, are you using the most food safe and employee safe material handling

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January~February 2019

suddenly, the costlier $900 container that is proven to last six to eight years seems like a bargain.

Meat Packing Journal

food

safety

i n n ovati o n

More expensive proves cheaper

W

Choosing your containers

est Liberty Foods is a US meat processing company owned by the Iowa Turkey Growers Cooperative. Formed in 1996 by a group of

Iowa turkey growers, the progressive company now owns

MPJ recommends these key considerations to be taken when choosing the best fit for your plant:

five meat processing plants, mainly producing products for customers to sell under their own brand names. As

u Is a long-life container that optimizes

of 2015, West Liberty Foods was the 10th-largest turkey

food safety a high consideration?

company in the United States.

u Is safe stacking that saves valuable floor

The company had converted to plastic injection molded containers and pallets in 2010 as part of their

space important? u Will raw material come in direct contact

commitment to food safety. It was felt that pallets and

with the containers?

containers made from high density polyethylene would

u Is ease of cleaning and sanitizing

mitigate the risk of bacterial cross contamination in food

needed?

products. While this is true, the inferior plastic single wall

u Is there an advantage to eliminating poly

products that the company bought proved to be brittle

bags at your plant?

and difficult to sanitize.

u Will the containers be easy to clean to

According to Rick Lindsay of West Liberty Foods, these pallets and containers proved to be a high cost solution

ensure bacteria will not be harbored? u What part of the plant will the containers

due to their lack of durability. “Every week we lost several

be in?

pallets and bins to breakage,” he says. “In mid-year 2012,

u Is there a height restriction to ensure

we converted to Saeplast rotationally molded pallets and

the container fits within your existing processing equipment? u Will the containers be subjected to very low temperatures in a freezer? u Will the containers be travelling between company plants and/or other plants?

triple wall polyethylene containers. Both products have performed exceptionally well over the last seven years.”

Upon further investigation with West Liberty Foods, the Saeplast triple-wall one-piece design provides an extremely long life as opposed to any of the other containers used in the past. “These containers have proved to be superior in all aspects especially in sanitation. We use substantially less labor and much

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January~February 2019

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I n n ovati o n

food

safety

less water and chemicals to sanitize our vats and return

every stack of three Saeplast containers. The inter-locking

to the floor”, says Lindsay. The fact the containers are

feature of the Saeplast containers that allows for safe

easy to move around the plant is a huge benefit to the

and easy stacking has proven to be advantageous to the

employees’ safety. No more cuts, strains or other injuries.

safety of the employees of West Liberty Foods.

Furthermore, the closed cell inner core will not absorb

“Yes, it is true the purchase price is significantly greater,

liquid, thus optimizing hygiene and providing the most

but the total cost of acquisition is significantly lower than

food safe container. This triple wall design with the special

any other option we have either tried or analyzed.” advises

inner core is extremely durable and easy to repair.

Lindsay.

To conform to West Liberty Foods’ 2012 Landfill Free

When considering the best alternative for material

initiatives, the Saeplast containers eliminated the need

handling your food product in your plant, you should

for plastic poly bags as the Saeplast containers’ plastic is

consider looking for a partner supplier who can offer you

made from 100% food grade materials. The elimination

the lowest total cost of acquisition over the long haul

of poly bags proved both a benefit to the Landfill Free

instead of purchasing the cheapest alternative.

commitment and to the food safety concerns of foreign

Be mindful of your goal of ensuring total food safety of

particle contamination. The savings in purchase costs and

your food product along with considering taking care of

more importantly, operational costs were realized as well.

one of your most valuable assets – your employees. The

Finally, the ability to safely stack the Saeplast containers three high in the coolers has saved West Liberty Foods valuable floor space and has also delayed

cheapest option never offers the best results long term.

Keep the focus on long term solutions.

As West Liberty Foods has proven, there are products

the need for further expansion of the coolers. By

available that offer the best return on your investment

eliminating the requirement to stack only one container

while keeping long term costs to a minimum and

high, West Liberty Foods has freed up two spaces for

ensuring food and employee safety.

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www.skaginn3x.com

I n n ovati o n

slaughter

End to male chick culling

A

new patented method to quickly determine a chick’s gender before hatching has led

throughout the entire supply chain.

Seleggt’s non-invasive gender identification in

to the first “no-kill” eggs being sold in

hatching eggs is a joint venture of Rewe Group (one of

Germany. The Seleggt process is set to

Europe’s largest retail groups) and a Dutch technology

revolutionize the way chicken eggs are

company (HatchTech B.V.) funded by BMEL.

produced for hatching around the world.

Each year around 7 billion male chicks are gassed or

According to Dr Ludger Breloh, Seleggt’s managing director who led the four-year program, it’s not about

thrown live into grinders because they do not lay eggs

winning or losing. “We all have the same goal, which is to

and do not grow fast enough to be sold as chicken meat,

end the culling of chicks in the supply chain.”

making them commercially useless, as well as giving

Breloh told The Guardian that his first breakthrough

animal right groups one more reason to hate farming.

came when he approached scientists at the University of

In the Seleggt process, a laser is used to burn a hole of

Leipzig where Prof Almuth Einspanier had developed a

no more than 0.3 millimeters into the hatching egg shell.

chemical market – similar to a pregnancy test – that could

Afterwards, a small amount of allantois fluid is extracted

a hormone present in large quantities in female eggs.

through a non-invasive procedure – the interior of the

Mixed with fluid from fertilized eggs at nine days, the

hatching egg is untouched and remains safe and sound.

marker changes blue for a male and white for a female.

In the next step, the allantois fluid is placed on a

Next, Breloh had to find a way of making the test easy

patented marker outside the hatching egg. Through a

for everyday use in hatcheries. He approached the Dutch

change in color, this marker will indicate whether the

technology company HatchTech and asked it to make an

sex-specific hormone estrone sulphate can be detected

automated machine to conduct Einspanier’s test.

in the hatching egg. If detected, a female chick is developing in the hatching egg.

After the gender identification process, the hatching egg does not need to be sealed as the inner membrane mends itself and closes the tiny hole from within.

While the whole process sounds time consuming, it takes about one second

While a needle would work, it was too invasive, so a laser was brought into the process. According to Breloh, it works “faultlessly”.

Chick culling has become increasingly controversial. In 2015, a video went viral of an Israeli animal rights activist shutting down a chick shredding machine and challenging a police officer to turn it back on. This consumer anger has

per egg.

No estrone sulphate indicates a male hatching egg, which is separated and processed into highquality animal feed.

The Seleggt process has

led to a global race to develop9 a more humane solution.

The likelihood that this technology would be developed commercially led

an accuracy rate of around 98

the US United Egg Producers to

percent. Seamless traceability

state two-years-ago that they

will be provided by innovative

were making the commitment

blockchain technology. Every

to stop the practice of grinding

hatchery equipped with the

chicks by 2020.

Seleggt process, rearing

“United Egg Producers

farm, laying farm or egg

and our egg farmer members

packing centers enters

support the elimination of day-

the relevant information

old make chick culling after hatch

into the blockchain via

for the laying industry. We are aware

app. The data is stored

there are a number of international

decentrally, may be viewed

research initiatives underway

by all members of the supply

in this area, and we

chain and cannot be altered.

encourage the development

This ensures a high level of security

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January~February 2019

of an alternative with the goal

Meat Packing Journal

slaughter

i n n ovati o n

of eliminating the culling of day-old chicks by 2020 or as soon as it is commercially available and economically feasible.”

This last November, the German Federal Minister of Food and Agriculture, Julia Klöckner, together with Dr Ludger Breloh and Jan Kunath, deputy CEO of Rewe Group, presented in Berlin the procedure for gender identification in hatching eggs. Rewe and Penny then

A World Leader in Batch and Continuous Rendering Systems since 1902

announced that in their Berlin stores, customers would be able to buy the first table eggs from laying hens that went through the Seleggt process. Rewe Group is already planning the national market launch of these eggs in all 5,500 Rewe and Penny stores in Germany this year.

At the same time, Seleggt is developing a business model to make the technology available to the industry

BATCH COOKERS

SCREW PRESSES

STEAM TUBE DRYERS

HYDROLYZERS

as a cost-neutral service. The patented process will be available to the first hatcheries from 2020.

Agriculture Minister Julia Klöckner said: “This is a great day for animal welfare in Germany. In this way, we will set the pace in Europe. My ministry has provided around five million euros to support research for promising methods of gender identification in hatching eggs. With the market readiness of the process presented today, Germany is a pioneer.

“Now it is possible to identify the gender of the chicks in the hatching egg through a needle-tip tiny hole. Male hatching eggs no longer need to be incubated and killed immediately after hatching. The scientists did extraordinary work and I am pleased to hear that there are partners in the industry who implement this process and make it generally accessible.

“For the consumer, it is also a significant step towards more animal welfare. It is also an opportunity for the hatcheries in Germany. Furthermore, it is an alternative for hatcheries that enables them to continue producing in Germany–while doing more for animal welfare at the same time. Because once the process is made available to all and the hatcheries have implemented the process, there will be no reason and no justification for chick culling. Regardless it is important not to lose sight of the dual-use breed and to support it.”

In his comments, Breloh said: “The Ministry's funding was tremendously important to us, especially during the research phase at the University of Leipzig. I would like to express my sincere gratitude to the ministry for this support. Despite all the euphoria, we still have a

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long way to go. We will work vigorously from our side to make the Seleggt process available to the hatcheries in a cost-neutral system. In 2019, we intend to move from market readiness to start of production. At the same time, I believe the development and funding of the dual-use breeds to be equally important. Until then, gender identification in hatching eggs could serve as gap

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bridging technology.”

meatpacking.info

January~February 2019

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y b e R

Meat Talk

The leading podcast for the meat and poultry industry

What do US chicken processors, British vegans, Greek butchers, Canadian cricket farmers, Russian agriculture investors, and global steak lovers have in common?

They all listen to Meat Talk.

Meat Talk was created as the first podcast for the international meat and poultry industry. Its initial audience reach, however, has expanded much further as listeners discover the journey narrator Velo Mitrovich takes them on.

In listening to Meat Talk, you’ll learn if a chick

can really be happy, why Amazon’s buyout of Whole Foods is great news for craft jerky makers, should you be eating bugs, bringing home the bacon, and why truck drivers are in short supply throughout the world – and hear a solution for the truck-dependent meat industry.

“If you thought meat couldn’t be entertaining, think again,” says Velo. “I invite you to spend some time with me.”

Meat Talk is available on Apple Podcast, Google Play, Stitcher, Podcast Addict, or wherever great podcast live.

Listen at: meattalk.reby.media

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