UEP director reports on egg exports, foreign
MANCHESTER NH More
than 80 egg and broiler producers
the fall annual meeting of
the New Hampshire Poultry
Growers Association last week
here at the Chateau Restaurant.
The producers heard reports from
the University of New Hampshire
on egg production tests, control
and/or elimination of MG, and the
current promotional efforts by the
Brown Egg Council.
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The afternoon’s keynote speaker
was Ken Khppen, director of
member services for United Egg
Producers, Atlanta, Georgia. He
reviewed the ongoing efforts and
programs of UEP, rooted in trymg
to secure the best monetary
returns for its members consistent
with supply and demand. He
focused on two topics: efforts to
curb foreign investments in the
U.S. egg industry, and government
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support of egg exports.
Khppen reported that earlier in
the year exports' were depressed,
the market was spiraling down,
and UEP was advocating molting
programs and early-kill to lessen
supplies.
'Yet, reports were coming in
that new facilities were being
built,” he said. Recanting the
economists’ rule of thumb, every
percentage change in supply
reflects a five percent change in
price in the opposite direction,
Khppen rhetorically asked "who
were these producers building
houses?” inquiries revealed that
foreign investors had built new
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facilities or had plans to build, and
as a percentage of the nation’s
layer population accounted for 5-8
percent of the total.
"At the UEP Denver meeting of
the board of directors,” Klippen
said, "a resolution passed with the
mtent to limit entry into the egg
business by foreign investors, and
that such entry would be greeted
by a hostile environment.” Klippen
used an analogy demonstrating
UEF’s concern with the influx of
foreign investors, displacing farm
families due to the rigid supply and
demand relationship in the egg
industry. He added that two-thirds
of the egg-laying poultry parent
seed stock is foreign owned.
Model legislation has been
adopted by UEF for use by the
state poultry groups in combating
this influx. Klippen noted that
federal legislation in curbing
foreign investors was unlikely.
In covering the topic of govern
ment support of egg exports,
Klippen renamed the subject "a
tale of frustrations in dealing with
the bureaucracy.” He traced the
development of mideastern
markets being taken by the
European Economic Community
and Brazil through their subsidy
programs.
He emphasized that exports
accounted for two percent of last
year’s production amounting to $7O
million, "a market we hated to
lose,” he said. "Furthermore, we
discovered that chick placements
in November and December were
up 50 percent in the Netherlands
and 20 percent in France clearly
indicating their intentions to
capture more of our markets in
July and August, the peak periods
of U.S. egg exports.”
Khppen recalled several UEF
meetings and much correspon
dence with USDA’s Under
Secretary of Agriculture Seeley
Lodwick and Secretary John Block
relative to the ineffectiveness ot
the GATT (General Agreement on
Tariffs and Trade). UEF proposed
investment
a program whereby the Ad
ministration could implement
their “get tough” policy with the
EEC. Entitled “Investment for
Free Trade”, the proposal, ex
plained Klippen, was a short-term
subsidy to aid the U.S. to compete
with the EEC. He added that the
proposal would help balance the
trade deficit, generate tax
revenues and increase em
ployment to meet the demands of
new markets.
Finally, Senator Jesse Helms
added his export amendment to the
Agriculture Act of 1982 that
provided the authority to the
Secretary of Agriculture to spend
$175-190 million annually for three
years for export assistance, noted
Klippen. Following passage in both
houses of Congress under the title
of the Omnibus Reconciliation Act
of 1982, the President signed the
bill into law in August as PL 97-253.
"Both UEP and United Egg
Association appealed to its
membership,” said Klippen,
"soliciting support in providing
direction to the secretary to spend
a portion of the authorized funds on
an egg export subsidy.”
in mid-September, egg exports
received a boost, he added, when
the Mexican tender for 500,000
cases was issued. At this time, the
Commodity Credit Corporation
issued a statement providing loan
guarantees to the Mexican
government and specifying that
$19.8 million was tagged for eggs.
L.ate October, "just before the
elections,” said Khppen, the
Administration announced plans to
provide export assistance in its
new 3-year, $1.5 billion "blended
credit” program blending
government export credits with
government private credits to
lower the interest rate to importing
countries. In 1983, $5OO million had
been tagged, utilizing $lOO million
fromthe $175 million fund.
"Still,” said Khppen, "there
remains $75 million to be utilized.
We will go back to our membership
and solicit their support in
securing these funds for the egg
industry.”
Wrapping up his presentation,
Khppen was optimistic about the
immediate future. He noted that
egg-type breeders in September
were down 42 percent from August,
and 8 percent from this period last
year. Khppen concluded with an
indication that the nation layer
Hock most likely would be 1-3
percent smaller in the first tew
months ot 1983.
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