Industry report: Positive outlook for global ...
Industry report

Positive outlook for global poultry industry

Imago / Andia
Rabobank analysts state that being disciplined in supply will be vital to preventing major supply and demand volatility.
Rabobank analysts state that being disciplined in supply will be vital to preventing major supply and demand volatility.

THE NETHERLANDS, Utrecht. Rabobank published its 2023 outlook for the global poultry industry. The financial services provider for the food & agribusiness sector expects strong market conditions. Still, producers are likely to face intensifying operational challenges.

According to a Rabobank press release, the outlook for 2023 is positive. Rabobank analysts expect the demand for poultry to stay strong while supply will remain limited. Due to the effect of an economic downturn on market conditions and consumer spending, the demand for chicken, eggs, and cheaper cuts and conventional chicken products typically increases.

Although a rising number of countries are risking oversupply, the analysts expect global markets to stay strong in 2023, with global poultry demand expected to benefit from trading down. However, in many countries, tight supply will restrict demand growth, leading to ongoing high prices. Although chicken is the best-positioned protein in terms of affordability, it raises the question of what price consumers are prepared to pay. This could lead to demand destruction, especially among low-income consumers. This is happening globally, especially in emerging markets in Asia, Africa, and Latin America.

In addition to these market changes, producers will face key challenges on the operational side, namely feed and energy prices, labour cost and availability, avian influenza (AI), and trade. Although feed prices will be slightly lower than in 2H 2022, feed and other input costs, such as energy, DOC, and labour, are all expected to stay high.

According to Rabobank analysts, key themes in 2023 include AI, government interventions, and supply discipline among producers. Government interventions during ongoing periods of high food prices, weak economic conditions, and pressured consumer spending power could include measures such as an opening of imports or restrictions on exports.

Avian influenza will be a crucial factor affecting many markets worldwide. The potential spread of AI in South America is particularly important, especially a move into Brazil, which could shake up global markets, particularly in key production areas in the South or Center-West regions. Optimal biosecurity, monitoring, and compensation programs will be critical, and further discussions about the adaptation of vaccination as a tool will become more relevant.

Source: Rabobank

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