fbpx

Analyst says ‘significant’ poultrymeat price inflation possible this year

graphic of chicken meat

RABOBANK’S latest outlook for the global poultrymeat industry has suggested prices could lift in the second half of 2021 as demand improves and supplies are constrained.

The reopening of foodservice businesses will create renewed demand for chicken, and supply chains are usually only able to respond slowly to such changes.

See also: Marks & Spencer accelerates switch to Better Chicken Commitment

Feed prices remain high, avian influenza (AI) is still affecting markets, and the covid-19 pandemic disrupted the global trade of breeding stock, all factors hampering production expansion.

China is ramping up domestic poultry production as a consequence of African Swine Fever, and the Middle East is also focused on improving food security by producing its own birds.

Europe

Conditions are improving in European markets in 2021.

Production dropped by 3.5% between January and April in Europe’s six top producer countries, for example, -17% in the Netherlands, -5% in Spain and -4% in Poland.


Rabobank said these declines were down to low profitability last year, high feed prices, AI and a shift to lower-density production in north-western Europe.

Imports down

Over the same period (Jan-Apr) there was a significant drop in imports, down -27% mainly due to lower imports from the UK (-40%), Ukraine (-54%), and, to a lesser extent, Brazil (-4%) and Thailand (-8%).

“The EU poultry industry has been heavily hit by Brexit, with EU exports to the UK down by 28% for the first four months of the year.

“This is a major reason why EU poultry exports dropped by 16%, to 683,000 metric tons, from January to April.

“Another factor is AI, which restricted trade to Asian and Middle Eastern countries.”

Despite this, Rabobank says that the outlook for the sector is more optimistic, with restrictions being lifted.

Production is expected to drop by 2%-3% in 2021 in Europe, with the UK expected to move towards higher self-sufficiency and shift its trade focus from the EU, the report added.