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European poultry markets in ‘fragile balance’

broiler chickens

EUROPE’S poultrymeat markets have shown some recovery in 2021 as closed sections of the economy reopen and production remains relatively low.

But risks remain and supply discipline will be key to profitability, according to Rabobank’s latest Poultry Quarterly update.

See also: Broiler chick placings continue to drop

Production has been lower because of weak demand, avian influenza outbreaks and a move to slow-grown chicken in some western European countries – as well as labour issues.

Across the EU, production in Q1 was down 3.7% on last year and 4.3% in Q2.

UK production was ‘stable’ across the year, the report says, despite strong demand for British produce and the lifting of covid restrictions.

Labour shortages

“This is very much linked to labour shortages forcing plants to run at a lower capacity and reduced supply and closures in foodservice,” the report says.

Production in Poland was down -9% in Q2 because of avian influenza, and in the same period in the Netherlands, production dropped -15% because of moves to slower-grown breeds.

With strong demand and lower production, profitability and prices have increased – but as eastern Europe begins to place more birds, that dynamic could change and “challenge the market’s currently fragile balance”.

The report warns that this production growth could offset cuts in the Netherlands and UK and hamper prices.

Global markets have “significantly improved”, the report suggests, with most regions performing at breakeven or in profit.

Labour problems are not just apparent in the UK – worldwide covid restrictions and migrant workers returning home are creating challenges, particularly in developed nations.

And feed costs are expected to remain high, the report suggests.