RABOBANK has said that the UK’s poultrymeat market faces a ‘fragile’ outlook for 2024 as various factors challenge sector profitability.

The bank’s global animal protein outlook for next year makes a particular note of the UK’s poultrymeat sector.

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It says that production entered a “slower growth period” around the time of Brexit following several years of fast expansion.

Higher production, imports, feed costs and labour challenges were blamed for the lower expansion, with the sector “currently focused on restoring profitability by optimising its footprint and rationalising some capacity”.

Growth in 2023 was 0.3%, according to the report.

Trade

Another challenge to profitability is the sharp drop in exports to Europe with no corresponding reduction in imports.

“This highlights the need to improve competitiveness, and potentially for new investment in lower-cost capacity.”

It concludes that the UK’s outlook remains fragile with a predicted growth in 2024 of 0.5%, adding that European prices are likely to decrease because of improved supply and non-EU imports of poultrymeat into the UK are likely to increase (by an estimated 3%-4%).

Europe

By contrast, European poultrymeat markets “rediscovered growth momentum” in 2023, with production up 3% in 2023.

This is mainly put down to Poland, where producers are once again running at full capacity.

The report also suggests that countries such as France and Italy will recover production following extensive avian influenza outbreaks.

However, this expansion and continued tariff-free imports from Ukraine will lead to price pressure.

“More supply discipline will be needed to rebalance EU poultry markets as long as big volumes of chicken enter European markets from Ukraine and affect the European wholesale chicken market,” it adds.