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European poultry markets face cost inflation and strong demand

graphic of chicken meat

PRICES for EU-produced chicken remained high in the third quarter of this year – with whole birds and some cuts up by about 30% compared to the same period in 2021.

Rabobank’s most recent outlook for poultrymeat says that is likely to remain the case, with high input costs, lower production and growing demand likely to support the market.

See also: Think about farm efficiency in the face of higher input prices

But it warns that the sector should strive to keep prices in check where possible to avoid a drop in demand.

While feed prices have fallen from their peaks in the second quarter, energy and logistics prices have gone up sharply.

Rabobank expects the cost of processing birds to rise by 35%-40%, more than offsetting lower feed prices, for example. Storage costs will also increase.

There are ongoing issues surrounding the availability of packaging and CO2 used for stunning birds before slaughter.

Demand strong

Despite this, demand for chicken is expected to remain strong – shoppers tend to prefer poultrymeat when budgets are squeezed.

Avian influenza also continues to challenge production, with outbreaks across the continent throughout the summer – something relatively unusual.

Across Europe chick placings are up slightly, production at slaughterhouses remains below 2019 levels, particularly in Western Europe. Poland is, however increasing production.

Eu-UK exports

The report also notes that exports to the UK were significantly up – by more than 70,000 metric tons in Q3.

Commenting on the outlook for the final quarter of the year, the report’s author, Nan-Dirk Mulder, said the sector should strive to keep prices as affordable as possible, to reduce the risk of ‘major demand liquidation’.

“The focus for the global poultry industry should be on excellence in operations. Being efficient in times of inflation, major supply challenges, and disruptions makes the difference between good and weak performance.”