GLOBAL demand for poultry will be strong in the second half of 2022 as shoppers look for more economical food choices – but the sector will be challenged by increasing operational difficulties.
As most countries adopt a ‘living with covid’ strategy, the foodservice sector continues its recovery and inflation-hit shoppers are seeking out poultrymeat as the lowest price meat protein – driving demand.
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And this is certainly the case in European markets, where strong demand has seen prices for chicken soar in the first six months of the year, according to Rabobank’s most recent poultry market report.
Supply was scaled down over the course of the pandemic as demand dropped, with avian influenza and soaring feed costs also hitting production.
European markets
As Europe’s market responds to growing demand, prices have tightened significantly.
Polish live bird prices were up 50% year-on-year in June, for example, and Rabobank’s pricing putting European breastmeat up 35% Y-O-Y in May 2022 and legs up 40%.
These higher prices are helping to offset higher feed costs, with most able to pass price rises on to customers.
Trade
Trade in Europe has also changed in the first half of this year, as a response to the tightening market and AI-related restrictions.
In the first six months of the year, EU exports dropped 8% while imports were up 9%.
The UK’s imports from the EU rose by 30% to 140,000 metric tonnes in the first quarter of the year, while exports from the UK to Europe also increased by 50%, to 50,000 metric tonnes.
Challenging market
For the remainder of 2022, feed prices look to remain high but more stable, Rabobank said, though labour availability and energy costs would continue to present challenges.
A major potential threat to the market would be the permanent lifting of restrictions on Ukraine imports, which would increase supply, Rabobank added.
“In this challenging market context, there will be a significant gap between winners and losers, the report concludes.
“Companies with strong market power, strong biosecurity, and strong operations – with high efficiency and solid procurement – will likely outpace the market.”
