Rising feed prices in 2022, continued inflation around the world and widespread cases of highly pathogenic avian influenza (HPAI) are expected to reduce global poultry growth in the fourth quarter of this year and the first quarter of 2023.

The outlook is bright compared to other protein markets. The affordability of chicken is attractive to most consumers, according to Rabobank’s fourth-quarter report.

“Chicken will be the protein of choice at a time when low prices are squeezing consumers’ purchasing power,” the report said. Due to the turmoil, the industry should look to continue offering affordable solutions to consumers to mitigate the risk of liquidation of key demand.”

After a difficult first half of 2022, China’s poultry market is recovering, even considering COVID-19 restrictions ongoing in the country, with some meat supplies and promising demand trends .

Meanwhile, demand is outstripping supply in Japan, and high prices and limited inventories are making it difficult for producers to keep up.

Global breeding supplies are hampered by COVID restrictions and AI precautions in Africa, Latin America and the Middle East.

“Southeast Asian countries such as Vietnam, Malaysia, Bangladesh and Indonesia are facing soaring local prices, prompting government intervention to restrict exports in Malaysia and others,” the report said.

However, Brazil was an anomaly, where higher prices and lower feed costs were not enough to offset lackluster local market conditions amid increased supplies.

With economies in coping mode in the face of global inflation, the lure of offering the best value for money favors poultry compared to other proteins. We haven’t ruled out another disruption of COVID-19 that could make us start eating more at home.

“However, the strong North American market is seeing lower profitability due to increased supply. European prices remain high as production is below 2019 levels,” said Rabobank’s Senior Animal Sex. explains protein analyst Nan-Dirk Mulder.

Factors that may pose challenges to the meat and poultry sector in the future include energy, labor, transportation and feed costs. Imminent shortages of resources such as packaging materials and carbon dioxide can further increase production and storage costs.

The limited supply of poultry is expected to be a result of the ongoing AI outbreak and its impact on trade, as well as overall cost increases expected to favor poultry companies.

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Source: Rabobank

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