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After the Corona year 2020, Germany's meat industry will probably not be able to avoid answering the most important future question for it: Does it want to continue to distinguish itself as a manufacturer of cheap mass products or does it focus on the production of sustainable, animal welfare goods, which are then also significantly more expensive?

“The meat industry is at a crossroads,” says Christian Janze, agricultural expert and partner at the consulting firm Ernst & Young (EY), with conviction.

Whether piglet castration, cage rearing, chick shredding or the controversial crate stalls in sow husbandry - long before the outbreak of the pandemic, the ongoing debate about husbandry conditions and slaughtering practices testified to widespread dissatisfaction among the population with industrial meat production.

The fact that slaughterhouses repeatedly proved to be sources of infection in the early phase of the epidemic increased skepticism.

The massive killing of chicks should finally come to an end

Because they do not lay eggs, around 45,000 male chicks are shredded each year.

This is to be prohibited by law in Germany, in the best case from the end of 2021. Criticism for this comes from animal rights activists and the poultry industry.

Source: WELT / Eybe Ahlers

Production restrictions in the slaughterhouses then put a strain on the supply chain through production to the end product.

Then there were also export bans from China, South America and elsewhere after the occurrence of African swine fever in wild boars in eastern Germany.

Fear of Brexit overshadowed the development.

2020 was definitely not a lucky year for the meat industry.

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But Germany now has the chance to build a future-oriented agriculture, says Janze.

"We could be pioneers for better animal production," he said when presenting a study by EY and the University of Göttingen.

The country has a well-developed agricultural technology, well-trained farmers and a network of universities that could scientifically accompany the change.

Source: WORLD infographic

In the end, however, it is the consumer who decides which direction to take, and his vote came as a surprise in many ways last year.

The money for meat and sausage, for example, was easily in his pocket.

In this way the butchers were able to reverse the trend in consumer favor that had been going against them for years.

The agricultural economist and co-author of the study, Regina Weinrich, said that especially those with higher incomes would have indulged themselves in one or the other high-quality fillet, for example to compensate for the frustration of a fancy vacation trip.

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In addition, the butcher shops benefited from the inclination towards regional products.

Result: In the first three quarters of 2020, the food tradespeople recorded a 30 percent increase in sales of meat and poultry compared to the same period last year.

Family and property change priorities

The meat industry is also feeling that its customers now have an alternative to animal foods with “veggie meat”.

Vegetable meat substitutes are regularly growing at double digits, and in the coming year the market volume is forecast to reach 400 million euros, and in ten years' time it will be around three billion euros.

The meat alternative is particularly popular with young people.

The consumer is willing to pay high prices here, observes Janze.

If there was an even remotely comparable willingness to pay for meat, many investments in animal welfare would be easy to finance, the expert said.

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Weinrich warned against simply projecting the popularity of veggie goods in the younger generation into the future, if only because the willingness to pay for food is not the same in all phases of life: “As soon as a family is started or a property is bought, they change Priorities."

The example of Sweden also shows what happens if the demands on farmers are exceeded.

Since the Scandinavian country made grazing for dairy cows compulsory, domestic milk production there has come to a standstill.

According to the Swedish Agriculture Authority, the population has actually shrunk by a third since the turn of the millennium.

"Put to a tough test"

The German meat industry remained the most important part of the food industry last year, with sales of around 45 billion euros.

The decline in sales was limited for the full year at 0.7 percent, but the development deteriorated from quarter to quarter - mainly because the industry went from winner to loser in African swine fever.

At the beginning of the year, a boom in pork exports to China - where the animal epidemic was rampant - resulted in an increase in sales of more than 20 percent year-on-year, but this gradually turned into a decrease of almost 13 percent in the last quarter.

The study series "Agrobusiness" draws a detailed picture of the economic sectors related to agriculture at regular intervals, including the food industry with the sub-sectors meat and milk, the animal feed industry, manufacturers of pesticides and fertilizers as well as agricultural engineering.

All in all, the Corona year "put the sector to a tough test", which was mastered well, according to the analysis.

Source: WORLD infographic

With a minus of 1.7 percent to a total of 234.3 billion euros, the overall business shrank less than other branches of the economy.

The agribusiness as defined by the EY and the University of Göttingen has thus overtaken mechanical engineering and has become the second largest segment behind the automotive industry and its suppliers.

The industry is looking to the current year "with cautious optimism".

However, this only applies to a limited extent to the dairy industry.

According to the analysis, the dairies have done well with stable sales at the high level of 29 billion euros.

However, the mood among dairy farmers, who had to accept falling producer prices for the third year in a row, is all the more gloomy.

At around 32 to 33 cents per kilo of milk, they fell again by around one cent.

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Many dairy farmers see the retail trade as the culprit.

He is making them victims of his price war for butter, yogurt and cheese, so the allegation.

The anger discharges again and again in blocking actions.

For example, towards the end of the year, farmers blocked the access roads of the Aldi discounter with hundreds of tractors.

Rival Lidl was also temporarily affected.

A few days ago, farmers stopped traffic around a warehouse belonging to the smaller K + K chain in Gronau, Westphalia.

"I understand the protests completely," said consultant Jantze.

"I'm just not sure whether the retail trade is the right addressee." While the positive results of the blocking campaigns are not recognizable, functioning structures between suppliers and retailers could be damaged.