Based on information released in Rabobank’s latest forecast, Poultry Report for Q1 2023, lower feed costs are benefiting producers and consumers switch to cheaper protein options. The outlook for the global poultry trade in 2023 remains positive.
However, analysts at the financial services firm said the economic downturn would affect market conditions as persistently high inflation weighs on consumers’ purchasing power and operational issues continue to challenge producers.
Nan-Dirk Mulder, senior analyst for animal protein at Rabobank, explained in the report that many countries are at risk of oversupply. Global markets are expected to remain strong in 2023, with global demand for poultry expected to benefit as consumers switch to cheaper proteins. However, global economic growth is expected to slow and inflation is expected to remain high.
Producers will face operational challenges such as feed and energy prices, labor costs and availability and avian flu (AI).
Feed and other input costs such as energy, day-old chicks and labor are all expected to remain high, even if feed prices are slightly lower than in the second half of 2022.
The report said raw material prices could change rapidly due to global shortages of agricultural commodities, geopolitical changes and the ongoing La Niña phenomenon. Other input costs, such as gas, electricity, oil and transportation costs, are highly volatile and vary widely across regions.
The global poultry trade was exceptionally strong in 2022 and it is expected to stay strong in 2023 on the back of tight supply conditions. Still, artificial intelligence, government interventions and oversupply could create significant volume and price swings.
Rising food prices, deteriorating economic conditions and prolonged pressure on consumers’ purchasing power are also important factors, Mulder said, and government interventions, such as opening up imports and restricting exports in 2022, are also key factors.
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