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‘Perfect storm’ of challenges for the poultrymeat sector

graphic of chicken meat

POULTRYMEAT producers across Europe face a ‘perfect storm’ of challenges in the first half of 2021, a new analysis suggests.

Ongoing oversupply, spreading avian influenza and rising feed costs are contributing to a “worse case context” according to the latest Rabobank Poultry Quarterly outlook.

See also: Feed wheat drives poultry rations to new high

Global markets are set to become more competitive as China and Vietnam recover from African Swine Fever.

Covid-19 continues to dampen foodservice activity and hamper trade, as well.

Across Europe oversupply continues to be an issue, with production up an estimated 0.6% in seven key poultry-farming countries between April and August despite a considerable reduction in volumes consumed.

Fall in consumption

For the full year, it is expected that consumption will have fallen by 2.6% and there will be 500,000t of poultrymeat in storage.

“This puts pressure on the market, with low prices and margins that are well below long-term averages,” said the report’s lead author Nan-Dirk Mulder.

Most countries in northern and north-western Europe have been hit by avian influenza, which will increase export restrictions and put pressure on dark meat prices.

Feed prices

And global grain and oilseed prices are up 25%-30% since August, further dampening the outlook for 2021.

A successful rollout of a covid-19 vaccine would improve matters, the report suggests, as the out-of-home eating market would reopen.

“For the time being, a significant reduction in production throughout Europe offers the only wat to stabilize markets and margins.

“­­The first signs of this are now being seen, with a 4% drop in placements in the top seven production countries. If supply discipline is maintained, prices should be able to recover during Q2-Q3 2021.”