POULTRYMEAT production is set to be lower this year across Europe because of market disruption caused by the covid-19 pandemic.
The latest Rabobank Poultry Quarterly suggests that the poultry industry in Europe is struggling to balance supply and demand.
As foodservice demand fell and supermarkets sharply increased sales of chicken – by more than 20% in many cases.
“The sudden drop in demand and changing of channels led to sharp price drops,” the report’s lead author Nan-Dirk Mulder said.
“The gradual easing of restrictions since June led to foodservice demand recovering, although it is still down by more than 50% in some channels.”
Chick placings across Europe dipped between 5-10% in April and May and began to rise in July, which put pressure on prices again.
Inventory building in April and May has also dampened prices, with lots of chicken that would have been sold in restaurants frozen.
Imports from countries that serve the foodservice sector have also dropped sharply. In the first half total imports fell 12% overall.
“The outlook for the industry is still challenging,” Mr Mulder added. “There remains a risk of a second wave of covid-19 in the coming autumn/winter months, which could set back market conditions.
“A restricted supply growth strategy under the current very volatile market conditions is going to be important, as happened in June and July, especially as cold storage levels are still high.”
Across the world, a slight increase in poultrymeat production is expected, put at 0.8% by Rabobank.
This is a result of continued expansion in regions still struggling with African Swine Fever outbreaks like China and Vietnam.