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European poultrymeat market tightens under exceptional pressure

graphic of chicken meat

SHARPLY rising feed costs, war in Ukraine, avian influenza and covid-19 are leading to extremely tight poultrymeat market conditions in Europe.

Across the continent, production has dropped ‘significantly’, with broiler chick placings 3% below 2019 levels in January this year, according to Rabobank’s latest analysis.

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This decline, driven by avian influenza, has continued through the spring despite fewer covid-19 restrictions stimulating demand.

As a result, prices in Europe have been rising, with whole bird and breastmeat prices 20% above Q1 2021 levels this year and leg prices up 25% over the same period.

“The high leg prices indicate the tightness of the market, as total exports dropped by 10% due to AI, while Ukraine chicken imports disappeared due to the war in Ukraine,” the report’s lead author Nan-Dirk Mulder said.

Ukraine

The war in Ukraine is having a significant impact on European poultry production, in particular the availability of grain and its price.

Corn and wheat prices are up 40% since the beginning of the crisis, and GM-free shipments are even more scarce. Reduced planting in the country could hit future supplies as well, Rabobank warns.

Before Russia’s invasion Ukraine was exporting close to 9,000t of chicken to Europe a month – that has now dropped to almost zero.

Outlook

The report says that the outlook for the European poultrymeat market is ‘moderately optimistic’.

That is because, in principle, shoppers “trade down” to poultry, a more economical protein, when budgets are constrained. The challenge will be in passing on higher prices to shoppers, the report concludes.

Globally, poultrymeat markets will remain tight, meaning prices should improve in regions where shoppers are able to afford the cost inflation.

The full outlook report is available from Rabobank.