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.
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.
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.”