iffa-2025

The global poultry market outlook is positive, but concerns for Europe and Southeast Asia are rising

rabobankRabobank’s latest poultry report indicates market conditions for the global poultry industry have significantly improved. Most major regions are performing at breakeven levels or enjoying profitable conditions. The reopening of economies in Europe and the Americas has helped the market to recover significantly and supported global trade.

The big exception is Southeast Asia, where the Delta strain is challenging the local situation. In Europe, supply is rising again, along with increasing oversupply concerns.

The outlook for global poultry markets remains strong, with ongoing strong demand and restricted supply, relatively flat – but high – feed prices, and further increases in trade volumes driven by recovering foodservice. However, in some countries, this has created food inflation concerns. “The wild card for the outlook remains Covid-19. Depending on how it develops, Covid-19 could shake up markets and supply discipline in some more fragile places, like Europe and Southeast Asia,” according to Nan-Dirk Mulder, Senior Analyst – Animal Protein at Rabobank.

Global trade improved, but trade issues remain a concern

Global trade saw a strong recovery in Q2 2021, with trade volumes at historical highs. Brazil and the US have benefited the most from strong trade, while exports from Europe, Russia, and Ukraine have dropped due to avian influenza (AI) and a slowdown in Chinese imports. Global trade issues, however, remain a key concern, as AI is still disrupting trade flows.

“In terms of market outlook, we expect strong demand for the remainder of 2021, despite these trade issues. Most markets are operating under tight supply conditions with improved foodservice demand. This will maintain strong trade flows,” says Mulder. The key wild cards, besides the trade issues, are AI, Covid-19 developments, labor, and container availability. “The container availability issue could potentially restrict poultry trade volumes later in the year. If so, it will be an upward factor for prices,” explains Mulder.

Ongoing supply issues will challenge the industry

Global poultry supply is expected to stay relatively restricted in many regions by labor availability issues, which are especially affecting production in the US, Europe, and Asia. There are significant challenges with labor availability at plants all over the world due to tight Covid-19 health requirements and immigrant laborers returning home. Solving this issue will be a key topic for many producers. Furthermore, ongoing AI risks and high feed prices are impacting supply worldwide.

Feed prices are expected to remain high

Feed prices are expected to stay relatively flat, with some increase in wheat prices due to weaker availability from the EU and Russia. Soymeal prices have been dropping due to rationalizing of demand and a more oil-focused approach among crushers.

Going forward, the return of wet weather – after a year of dryness – in main producer Brazil will be key, as September should see the start of soybean plantings. A possible return of La Niña conditions in Q4 could mean further dryness ahead. Meanwhile, in the US, investors are eagerly awaiting soy and corn harvest results. www.rabobank.com