EUROPE’S poultrymeat sector is recovering after a tumultuous 2020, but improved prices have not been enough to offset higher feed costs.
Chicken prices in early March were 5% above their levels a year ago, compared with average feed prices being 15% above 2020 levels.
See also: Record chicken output in 2020
According to Rabobank’s second quarterly poultry update, European poultry production across 2020 was consistently above 2019 levels, despite consumption dropping because of lockdowns.
And although retail sales have grown, total consumption is down.
“The recent, more disciplined supply strategy with lower production in December (in line with lower placements between October and January) is helpful, but not enough to return to profitability,” says the report’s author Nan-Dirk Mulder.
Breast meat prices have improved, but avian influenza-related export restrictions continue to depress dark meat value.
For Europe, Mr Mulder suggests a successful vaccine roll-out will be critical.
“The outlook for 2021 remains challenging, and the big hope of the industry is a successful Covid vaccination program with greater foodservice activity in summer.
“Demand from foodservice is key for industry recovery.”
Across the rest of the world, 35% of global poultry consumption is via foodservice.
“Key for producers in 1H 2021 will be to have a very disciplined supply growth, a focus on cost reduction via procurement, production efficiency, and feed formulation, as well as being prepared for big swings in demand driven by Covid-19-related government decisions,” added Mr Mulder.