How do we think EU negotiations will go?
Discussion
confused_buyer said:
My gut feeling is the EU's expectation was that the UK would be so desperate to move the subject on to trade that they would quickly try and come to something on the money in order to justify moving it on.
I think the UK side deserves a bit of credit for not panicking and falling into a trap here. The EU have presented their bill and rather than produce a counter bill as the EU were expecting the UK went away and forensically analysed it. Last week they spent 4 days asking the EU various questions about the basis and assumptions of their calculations. They then quietly went back to London without saying much.
The ridiculous idea they pitched up with something on a back of an envelope is a media fantasy. They actually had 100 people asking very awkward questions.
I'm not sure what Barnier is really complaining about. He seems to have expected to present a €100bn bill and the UK come back with a "OK, let's call it €65bn and move on" counter offer like haggling in a Marrakech market. What the UK has actually done is decided to establish in detail what the actual legal basis for the demand is before mentioning any figures of their own and develop some counter arguments and do so in a somewhat calm manner. This doesn't seem to be what Barnier was expecting and he seems somewhat frustrated by that.
Wasn't the EUs negotiating tactics warned about by Yanis Varoufakis the ex Greece finance minister? iIRC he warned the UK exactly how they would approach the negotiations and his prophesy appears to be accurate so far. I think the UK side deserves a bit of credit for not panicking and falling into a trap here. The EU have presented their bill and rather than produce a counter bill as the EU were expecting the UK went away and forensically analysed it. Last week they spent 4 days asking the EU various questions about the basis and assumptions of their calculations. They then quietly went back to London without saying much.
The ridiculous idea they pitched up with something on a back of an envelope is a media fantasy. They actually had 100 people asking very awkward questions.
I'm not sure what Barnier is really complaining about. He seems to have expected to present a €100bn bill and the UK come back with a "OK, let's call it €65bn and move on" counter offer like haggling in a Marrakech market. What the UK has actually done is decided to establish in detail what the actual legal basis for the demand is before mentioning any figures of their own and develop some counter arguments and do so in a somewhat calm manner. This doesn't seem to be what Barnier was expecting and he seems somewhat frustrated by that.
steveatesh said:
confused_buyer said:
My gut feeling is the EU's expectation was that the UK would be so desperate to move the subject on to trade that they would quickly try and come to something on the money in order to justify moving it on.
I think the UK side deserves a bit of credit for not panicking and falling into a trap here. The EU have presented their bill and rather than produce a counter bill as the EU were expecting the UK went away and forensically analysed it. Last week they spent 4 days asking the EU various questions about the basis and assumptions of their calculations. They then quietly went back to London without saying much.
The ridiculous idea they pitched up with something on a back of an envelope is a media fantasy. They actually had 100 people asking very awkward questions.
I'm not sure what Barnier is really complaining about. He seems to have expected to present a €100bn bill and the UK come back with a "OK, let's call it €65bn and move on" counter offer like haggling in a Marrakech market. What the UK has actually done is decided to establish in detail what the actual legal basis for the demand is before mentioning any figures of their own and develop some counter arguments and do so in a somewhat calm manner. This doesn't seem to be what Barnier was expecting and he seems somewhat frustrated by that.
Wasn't the EUs negotiating tactics warned about by Yanis Varoufakis the ex Greece finance minister? iIRC he warned the UK exactly how they would approach the negotiations and his prophesy appears to be accurate so far. I think the UK side deserves a bit of credit for not panicking and falling into a trap here. The EU have presented their bill and rather than produce a counter bill as the EU were expecting the UK went away and forensically analysed it. Last week they spent 4 days asking the EU various questions about the basis and assumptions of their calculations. They then quietly went back to London without saying much.
The ridiculous idea they pitched up with something on a back of an envelope is a media fantasy. They actually had 100 people asking very awkward questions.
I'm not sure what Barnier is really complaining about. He seems to have expected to present a €100bn bill and the UK come back with a "OK, let's call it €65bn and move on" counter offer like haggling in a Marrakech market. What the UK has actually done is decided to establish in detail what the actual legal basis for the demand is before mentioning any figures of their own and develop some counter arguments and do so in a somewhat calm manner. This doesn't seem to be what Barnier was expecting and he seems somewhat frustrated by that.
Robertj21a said:
steveatesh said:
Wasn't the EUs negotiating tactics warned about by Yanis Varoufakis the ex Greece finance minister? iIRC he warned the UK exactly how they would approach the negotiations and his prophesy appears to be accurate so far.
We have a way out, they didn't.Deptford Draylons said:
Was there any answer to the predicted drop in EU trade ? You said it couldn't be made up by other trade deals, which does imply you have an idea of a figure in mind. Would be interesting to know.
It would be interesting to know what you think the drop in trade would be if we went WTO with no deal. Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
andymadmak said:
///ajd said:
You appear to be know the business Andy.
Can you expand on:
- whether it is true or not that US chicken is around 21% cheaper than that produced here - the media seems to imply that is related to the use of chlorine enabling efficiencies in production - is the saving real and what drives it?
- is this related to what you describe as the EU believes in "proper application of process" - i.e. what extra activity does farming here have to do to ensure the same safe product without using chlorine? Is the US nor bothering with "proper application of process?"
Good questions.Can you expand on:
- whether it is true or not that US chicken is around 21% cheaper than that produced here - the media seems to imply that is related to the use of chlorine enabling efficiencies in production - is the saving real and what drives it?
- is this related to what you describe as the EU believes in "proper application of process" - i.e. what extra activity does farming here have to do to ensure the same safe product without using chlorine? Is the US nor bothering with "proper application of process?"
Chicken is a rapid growing cycle. In many cases from egg to slaughter is less than 2 months. Something like 65% of the cost of a chicken is in the feed cost - and the Amaericans are very good at producing vast quantities of high quality feed at low cost. This feeds into the savings, together with the sheer economies of scale that they operate on. Processing facilities literally run tens of thousands of birds per day ( I think one of the largest I saw was something like 20,000 per hour!)
The rearing and transportation regimes are very similar to europe. Most is done in huge sheds, with controlled light, feed regimes and temperature. They work very hard to ensure no contamination from the outside - if you visit a chicken rearing facility you will be very surprised at the biosecurity you will go through just to get jnto the sheds. The sheds are like big barns, with chickens deciding where they will sit, rather than being in cages. There have been concerns about density of shed populations but such is the dynamic in the industry ( its very tightly honed for optimum yields, the bad old days of standing room only have gone!
Transportation crates were another area where yields can be affected. Chickens are literally stuffed into crates, live, for transport to slaughter. Put too many in a crate and its bad for the chicken. Do it too roughly and you get broken bones, bad meat etc. - bruising, bloodspots, bone fragments, all of which affect yield, plus potential damage to the gizzard and crop which can allow digestive materials to contact the meat during the slaughter process Again, no sensible producer on either side of the pond is going to tolerate the losses that these bad practices create.
As I said in my earlier post, the chlorine wash question is a bit of a red herring. Actually in many cases its not chlorine at all, but rather it is Peracetic acid, otherwise known as vitamin K!
The EU takes the view that whilst the washes themselves are safe for use, they would allow a culture of bad practice - too many birds per crate, rough handling at the slaughter house, improper settings on slaughter machinery etc. Personally I don't see the logic in this line of thinking, hence my comment that its maybe due to a knee jerk reaction to the "tumbling" scandal. The US producers do take care, but they also add the extra step of washing. Given the scale and numbers involved, nobody is going to do something without reason, and the US clearly identfied that small as the risk of contamination might be, it was nevertheless worth taking a step to mitigate that risk by way of bactericidal wash.
Sorry, typing on a train is challenging!
Edited to add, if you REALLY want to see some potentially bug infested chicken look no further then free range! Happy chicken she may be, but scratting around in the mud outside will lead to chick ns picking up all sorts of nasties from the environment around them!
Edited by andymadmak on Thursday 27th July 07:36
It seems the main cost difference you outline is economies of scale, notably for the foodstuff. This would suggest that even if we changed (note I'm not saying lowered) the standard to allow chlorinated chicken (for our own farmers for example), it wouldn't benefit our farmers as chlorination does not enable a process or cost benefit. That makes me wonder where the chlorination issue is actually a protectionist measure to avoid cheap US chicken threatening domestic EU poultry farming?
I'm not quite following whether the "proper application of process" you referred to earlier implied a different approach in the EU to some aspects or not? If the US think they need the chlorine process, why is it not needed in the EU? It implies there is a difference somewhere, but I can't work out what that may be.
///ajd said:
It would be interesting to know what you think the drop in trade would be if we went WTO with no deal.
Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
There are quite simply too many ifs, buts and maybes involved to make any sort of accurate prediction on it. I believe Treasury forecasts used quite extreme models which may or may not occur. And dare I say that confirmation bias probably has more to do with it feeling about right to you than any other factor Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
It could be any of those 4 scenarios. But looking at a fall off in trade with the EU is only one facet of our economy. There could even be three other scenarios that go in the opposite direction!
If you think I'm dodging the question, my view is that a or b (or the polar opposite of b) are most likely to result, the whole economic debate being a zero sum game. But regardless of what it ends up being it will be impossible to assign it purely to the act of leaving and I doubt most people will notice as any result, good or bad, won't suddenly switch on or off like a light.
Have a look at this:
http://uk.businessinsider.com/brexit-university-of...
Why would I put any more faith in those experts over the Treasury ones. Because they're realistic enough to call their own models into question and are stating nothing as fact. Economics is not an exact science, no matter how much it tries to make itself look that way, or how much we would want it to be so.
Murph7355 said:
///ajd said:
It would be interesting to know what you think the drop in trade would be if we went WTO with no deal.
Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
There are quite simply too many ifs, buts and maybes involved to make any sort of accurate prediction on it. I believe Treasury forecasts used quite extreme models which may or may not occur. And dare I say that confirmation bias probably has more to do with it feeling about right to you than any other factor Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
It could be any of those 4 scenarios. But looking at a fall off in trade with the EU is only one facet of our economy. There could even be three other scenarios that go in the opposite direction!
If you think I'm dodging the question, my view is that a or b (or the polar opposite of b) are most likely to result, the whole economic debate being a zero sum game. But regardless of what it ends up being it will be impossible to assign it purely to the act of leaving and I doubt most people will notice as any result, good or bad, won't suddenly switch on or off like a light.
Have a look at this:
http://uk.businessinsider.com/brexit-university-of...
Why would I put any more faith in those experts over the Treasury ones. Because they're realistic enough to call their own models into question and are stating nothing as fact. Economics is not an exact science, no matter how much it tries to make itself look that way, or how much we would want it to be so.
I note in that article the treasury only predicted a 12% drop in the pound - it is down 17% on the € since ref day on 23 Jun. It was not all "too pessimistic" it seems.
I've not seen any analysis or predictions that support b), let alone a) - are there any that actually support b)?
///ajd said:
I note in that article the treasury only predicted a 12% drop in the pound - it is down 17% on the € since ref day on 23 Jun. It was not all "too pessimistic" it seems.
Equally, as the £ was lower a few years ago against the € than it is now when Brexit was a very remote possibility and not on the political Agenda the £ has had a boost from Brexit....
They are all silly arguments really.
///ajd said:
It would be interesting to know what you think the drop in trade would be if we went WTO with no deal.
Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
Just to put this in context, a 10% decrease in EU trade would be £24bn, which is about 1.25% of U.K. GDP.Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
///ajd said:
It is refreshing that you don't totally avoid the question, and put your view as a) or b).
I note in that article the treasury only predicted a 12% drop in the pound - it is down 17% on the € since ref day on 23 Jun. It was not all "too pessimistic" it seems.
I've not seen any analysis or predictions that support b), let alone a) - are there any that actually support b)?
I've never avoided it I note in that article the treasury only predicted a 12% drop in the pound - it is down 17% on the € since ref day on 23 Jun. It was not all "too pessimistic" it seems.
I've not seen any analysis or predictions that support b), let alone a) - are there any that actually support b)?
Why is a "weaker" currency "bad"? What level should it be at?
The article itself notes one scenario of a 2% drop. Thing is, you make different assumptions about what might happen worldwide over the next 10yrs and your model will spit out different numbers. And under none of them would you be able to say that things would have been different had we not left. And under none of them do you get any guarantees.
No model predicted us going backwards in absolute terms. As far as I'm concerned, that's good enough for the non-economic benefits to be worthwhile.
///ajd said:
Deptford Draylons said:
Was there any answer to the predicted drop in EU trade ? You said it couldn't be made up by other trade deals, which does imply you have an idea of a figure in mind. Would be interesting to know.
It would be interesting to know what you think the drop in trade would be if we went WTO with no deal. Over a period of 10 years:
a - Nil, with massive gains from new trade deals?
b - A tiny bit 1-2%, but barely noticeable and offset by new trade deals?
c - A substantial amount 5-10%, impacting jobs with some new trade but not enough to offset?
d - A large impact 20%+ with little new export trade, with substantial increase in trade deficit.
The treasury seem to suggest its around c), and that feels about right.
Where do you think it'll be?
In terms of danger, I view Brexit as a lesser risk than the general election where you could vote Labour. No wonder it seems even a good few Remainers voted for May on the sly but don't wish to be seen doing so.
loafer123 said:
Just to put this in context, a 10% decrease in EU trade would be £24bn, which is about 1.25% of U.K. GDP.
One method of calculating GDP isGDP= consumption + investment + government expenditure + exports - imports
We have a substantial trade deficit with the EU so if both exports and imports decline by the same percentage it would actually boost GDP
That ignores knock on effects on the wider economy of course, but, to go back to the post above, Economics is not an exact science and production no longer going to the EU may be diverted into other markets. So to say you can exactly quantify the effects is highly misleading.
///ajd said:
andymadmak said:
///ajd said:
You appear to be know the business Andy.
Can you expand on:
- whether it is true or not that US chicken is around 21% cheaper than that produced here - the media seems to imply that is related to the use of chlorine enabling efficiencies in production - is the saving real and what drives it?
- is this related to what you describe as the EU believes in "proper application of process" - i.e. what extra activity does farming here have to do to ensure the same safe product without using chlorine? Is the US nor bothering with "proper application of process?"
Good questions.Can you expand on:
- whether it is true or not that US chicken is around 21% cheaper than that produced here - the media seems to imply that is related to the use of chlorine enabling efficiencies in production - is the saving real and what drives it?
- is this related to what you describe as the EU believes in "proper application of process" - i.e. what extra activity does farming here have to do to ensure the same safe product without using chlorine? Is the US nor bothering with "proper application of process?"
Chicken is a rapid growing cycle. In many cases from egg to slaughter is less than 2 months. Something like 65% of the cost of a chicken is in the feed cost - and the Amaericans are very good at producing vast quantities of high quality feed at low cost. This feeds into the savings, together with the sheer economies of scale that they operate on. Processing facilities literally run tens of thousands of birds per day ( I think one of the largest I saw was something like 20,000 per hour!)
The rearing and transportation regimes are very similar to europe. Most is done in huge sheds, with controlled light, feed regimes and temperature. They work very hard to ensure no contamination from the outside - if you visit a chicken rearing facility you will be very surprised at the biosecurity you will go through just to get jnto the sheds. The sheds are like big barns, with chickens deciding where they will sit, rather than being in cages. There have been concerns about density of shed populations but such is the dynamic in the industry ( its very tightly honed for optimum yields, the bad old days of standing room only have gone!
Transportation crates were another area where yields can be affected. Chickens are literally stuffed into crates, live, for transport to slaughter. Put too many in a crate and its bad for the chicken. Do it too roughly and you get broken bones, bad meat etc. - bruising, bloodspots, bone fragments, all of which affect yield, plus potential damage to the gizzard and crop which can allow digestive materials to contact the meat during the slaughter process Again, no sensible producer on either side of the pond is going to tolerate the losses that these bad practices create.
As I said in my earlier post, the chlorine wash question is a bit of a red herring. Actually in many cases its not chlorine at all, but rather it is Peracetic acid, otherwise known as vitamin K!
The EU takes the view that whilst the washes themselves are safe for use, they would allow a culture of bad practice - too many birds per crate, rough handling at the slaughter house, improper settings on slaughter machinery etc. Personally I don't see the logic in this line of thinking, hence my comment that its maybe due to a knee jerk reaction to the "tumbling" scandal. The US producers do take care, but they also add the extra step of washing. Given the scale and numbers involved, nobody is going to do something without reason, and the US clearly identfied that small as the risk of contamination might be, it was nevertheless worth taking a step to mitigate that risk by way of bactericidal wash.
Sorry, typing on a train is challenging!
Edited to add, if you REALLY want to see some potentially bug infested chicken look no further then free range! Happy chicken she may be, but scratting around in the mud outside will lead to chick ns picking up all sorts of nasties from the environment around them!
Edited by andymadmak on Thursday 27th July 07:36
It seems the main cost difference you outline is economies of scale, notably for the foodstuff. This would suggest that even if we changed (note I'm not saying lowered) the standard to allow chlorinated chicken (for our own farmers for example), it wouldn't benefit our farmers as chlorination does not enable a process or cost benefit. That makes me wonder where the chlorination issue is actually a protectionist measure to avoid cheap US chicken threatening domestic EU poultry farming?
I'm not quite following whether the "proper application of process" you referred to earlier implied a different approach in the EU to some aspects or not? If the US think they need the chlorine process, why is it not needed in the EU? It implies there is a difference somewhere, but I can't work out what that may be.
I found this explanation which gives some background to the extra costs of EU production. This aligns with your "proper process" statement:
"But the EU takes a different approach — it operates on the precautionary principle, a kind of abundance of caution when it comes to any substance that enters your body.
In Europe, their efforts to control foodborne illness is all in the live bird. For example, the grandparent stock, the breeder stock that makes the egg of the chicken we eat eventually — all of those flocks of chicken are tested regularly for salmonella. If any of these chickens test positive, farmers have to get rid of the entire flock.
With this method, Europeans have reduced salmonella in their chicken to just 2 percent, but the process took 20 years.
Europeans have pushed for some of the toughest food-safety standards in the world. They want to eat fresh chicken that's air-chilled rather than dumped in chlorinated water tanks, says Cees Vermeeren, who manages the European Association of Poultry Processors and Poultry Trade.
The main principle of the European food policy is a farm-to-fork approach, and you may say that is fundamentally different from what's happening outside Europe in many places.
That strict food policy makes poultry production more expensive. A study by Wageningen University in the Netherlands found it takes about a dollar in Europe to produce a pound of chicken, compared with less than 80 cents in America."
This suggests there are significant production cost base differences, which are related to the use of chlorine (or rather what extra things you have to do instead of chlorine).
JagLover said:
One method of calculating GDP is
GDP= consumption + investment + government expenditure + exports - imports
We have a substantial trade deficit with the EU so if both exports and imports decline by the same percentage it would actually boost GDP
No it wouldn't. The imports are subtracted because they are already included in one of the other figures, they don't affect GDP.GDP= consumption + investment + government expenditure + exports - imports
We have a substantial trade deficit with the EU so if both exports and imports decline by the same percentage it would actually boost GDP
Dr Jekyll said:
JagLover said:
One method of calculating GDP is
GDP= consumption + investment + government expenditure + exports - imports
We have a substantial trade deficit with the EU so if both exports and imports decline by the same percentage it would actually boost GDP
No it wouldn't. The imports are subtracted because they are already included in one of the other figures, they don't affect GDP.GDP= consumption + investment + government expenditure + exports - imports
We have a substantial trade deficit with the EU so if both exports and imports decline by the same percentage it would actually boost GDP
https://www.forbes.com/sites/bobmcteer/2013/05/05/...
If instead of buying a German car we buy a British one the consumption is still there we just don't deduct the resulting import.
I am not arguing against imports as such, after all being able to pay for them is the point of exports in the first place. Only that you cannot extrapolate from falling trade as a percentage of GDP to the exact same effect on GDP.
JagLover said:
Imports don’t really reduce domestic income; they just don’t add to it.
https://www.forbes.com/sites/bobmcteer/2013/05/05/...
If instead of buying a German car we buy a British one the consumption is still there we just don't deduct the resulting import.
+1https://www.forbes.com/sites/bobmcteer/2013/05/05/...
If instead of buying a German car we buy a British one the consumption is still there we just don't deduct the resulting import.
If you buy a British car when you might otherwise have bought German then GDP increases because one more British car is made and sold.
If you buy a German car as well as the British car, then imports and consumption both go up by the same amount, so no GDP effect. (Ignoring the dealer, finance house, insurance, etc).
///ajd said:
EDIT
I found this explanation which gives some background to the extra costs of EU production. This aligns with your "proper process" statement:
"But the EU takes a different approach — it operates on the precautionary principle, a kind of abundance of caution when it comes to any substance that enters your body.
In Europe, their efforts to control foodborne illness is all in the live bird. For example, the grandparent stock, the breeder stock that makes the egg of the chicken we eat eventually — all of those flocks of chicken are tested regularly for salmonella. If any of these chickens test positive, farmers have to get rid of the entire flock.
With this method, Europeans have reduced salmonella in their chicken to just 2 percent, but the process took 20 years.
Europeans have pushed for some of the toughest food-safety standards in the world. They want to eat fresh chicken that's air-chilled rather than dumped in chlorinated water tanks, says Cees Vermeeren, who manages the European Association of Poultry Processors and Poultry Trade.
The main principle of the European food policy is a farm-to-fork approach, and you may say that is fundamentally different from what's happening outside Europe in many places.
That strict food policy makes poultry production more expensive. A study by Wageningen University in the Netherlands found it takes about a dollar in Europe to produce a pound of chicken, compared with less than 80 cents in America."
This suggests there are significant production cost base differences, which are related to the use of chlorine (or rather what extra things you have to do instead of chlorine).
Yes and no. Its a bit more complex than that. There are US producers of air chilled chicken too. Whilst it is true that air chill costs more, I would say that the real savings that make up the bulk of the cost differential is in the cost of feed. The US produces vast quantities of high quality low cost feed compared to europe, and since feed costs account for around 65% of poultry production costs, its a sizable factor. Add in the enormous economies of scale typical to US production and you can account for more of the difference.I found this explanation which gives some background to the extra costs of EU production. This aligns with your "proper process" statement:
"But the EU takes a different approach — it operates on the precautionary principle, a kind of abundance of caution when it comes to any substance that enters your body.
In Europe, their efforts to control foodborne illness is all in the live bird. For example, the grandparent stock, the breeder stock that makes the egg of the chicken we eat eventually — all of those flocks of chicken are tested regularly for salmonella. If any of these chickens test positive, farmers have to get rid of the entire flock.
With this method, Europeans have reduced salmonella in their chicken to just 2 percent, but the process took 20 years.
Europeans have pushed for some of the toughest food-safety standards in the world. They want to eat fresh chicken that's air-chilled rather than dumped in chlorinated water tanks, says Cees Vermeeren, who manages the European Association of Poultry Processors and Poultry Trade.
The main principle of the European food policy is a farm-to-fork approach, and you may say that is fundamentally different from what's happening outside Europe in many places.
That strict food policy makes poultry production more expensive. A study by Wageningen University in the Netherlands found it takes about a dollar in Europe to produce a pound of chicken, compared with less than 80 cents in America."
This suggests there are significant production cost base differences, which are related to the use of chlorine (or rather what extra things you have to do instead of chlorine).
The types of bird used for parent stock, meat production etc are common to both sides of the Atlantic
andymadmak said:
Yes and no. Its a bit more complex than that. There are US producers of air chilled chicken too. Whilst it is true that air chill costs more, I would say that the real savings that make up the bulk of the cost differential is in the cost of feed. The US produces vast quantities of high quality low cost feed compared to europe, and since feed costs account for around 65% of poultry production costs, its a sizable factor. Add in the enormous economies of scale typical to US production and you can account for more of the difference.
The types of bird used for parent stock, meat production etc are common to both sides of the Atlantic
What about the testing for Salmonella and killing a flock if its discovered? Sounds like that happens in the EU, and could be a cost driver. It seems that does not happen in the US - any salmonella goes in the chlorine wash.The types of bird used for parent stock, meat production etc are common to both sides of the Atlantic
If it is the food, and its really 20% cheaper, I assume the EU can't just import the food or they would already, perhaps transport costs are an issue. It would be interesting to know if a 20% difference would see them exported or if the transport costs might be an issue - I guess supermarkets would determine that as they chase every last penny of profit.
Do you think US chicken - if it is 20% cheaper - would be imported to UK if allowed?
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