Positive outlook for poultry markets in 2024

The global poultry industry consolidated during 2023, despite weak global economic growth and higher consumer prices.

The decline in feed prices helped boost output as the year progressed, while global demand improved as consumer pricing showed signs of tapering off.

However, major operational challenges related to relatively high costs and the impacts of Avian Influenza (AI) are keeping production growth relatively low (Rabobank, 2023).

The global transition towards white meat protein continues to gain momentum. In 2023, global poultrymeat consumption reached 132m tonnes compared to 103m tonnes back in 2012 (Gira, 2023).

In recent years, global demand for poultrymeat has benefited from consumers down trading to the category. This reflects a deterioration in consumer confidence globally following the fallout of COVID-19, especially in China and other key Asian economies.

The impact of the Ukrainian invasion last year continues to affect consumer confidence, with living costs remaining at elevated levels and higher interest rates negatively influencing consumer behaviour.

AI remains a global threat that will curtail production growth. In some markets where there is not a strong export trade, countries are looking at the possibility of vaccinating their poultry stock against the risks of AI.

In Europe, due to longer life cycles and less modern housing facilities, turkey and duck production have been more exposed to outbreaks in recent years.

Production growth in EU

In the EU, the industry has benefitted from high broiler prices and lower feed costs during the year. Production growth in Europe continues to be driven by Poland.

However, EU poultrymeat imports have also increased during the year, with imports from Ukraine rising by 78% for the year to July (IHS Markit, 2023).

Local demand in Ukraine has fallen by 17% on the back of higher emigration (6 million people) and local community displacement (5 million people impacted).

In addition, unemployment rates are running at 19% compared to 10% prior to the invasion. In response to these developments, the EU introduced zero-duty on Ukrainian poultrymeat imports, which is set to continue until mid-2024.

One of the largest global net exporters of poultrymeat is Brazil, as it benefits from its accessibility to plentiful grain supplies, and whilst the Brazilian Real has strengthened in recent times, the currency is still relatively weak, which has helped underpin their export activity.

Brazilian poultrymeat output increased by 3% during 2023.

On the back of higher raw material availability, Brazilian exports to the EU region rose by 14% during the year. However, the Brazilian industry is highly susceptible to the risks of AI, where 145 cases have been detected in wild birds up until the start of December; no cases have yet been reported in commercial flocks.

If this happened, it would have major implications for global meat trade flows during 2024.

Russian policy

The policy to expand Russia’s food production footprint continues to grow.

Abundant grain harvests are helping to supply local food sectors with cheap raw materials after a record 135m tonne harvest in 2023, as local demand is impacted by inflationary pressure.

Poultry exports from this region are continuing to grow and have been in growth since 2019. Whilst AI is a significant challenge in Russia, China accepts AI regionalisation from Russia and is the main outlet for Russian suppliers, followed by Saudi Arabia.

In the Middle East and North Africa (MENA), import demand fell due to higher inflationary pressure. The main poultrymeat supplier to this region remains Brazil.

In the US, the popularity of poultrymeat with consumers remains extremely strong. Around 16% of output is exported, with Mexico the key partner market.

Most of their exports revolve around leg quarters that are not consumed domestically. AI remains a huge challenge for the industry, with most of the risk lying within the laying hen and turkey subcategory.

Irish poultry production increases

The Irish poultry industry during 2023 benefitted from firm demand, combined with lower disease pressure in the sector.

Poultry throughput levels up to the end of October were running 4% higher at 95 million head compared to prior year levels.

For the main subcategory, chicken output increased by almost 3% to 85 million head (Department of Agriculture, 2023). This reflects firm demand, with more dark chicken being sold on the Irish market as price-sensitive consumers continue to seek value.

According to Kantar Worldpanel, Irish consumer spend on dark chicken meat rose by 36% to €45m during the 52-week period ending 29 October 2023 (Kantar Ireland, 2023).

Whilst poultrymeat is the most competitively positioned meat protein, there has been significant price inflation in this category.

According to Kantar’s data, Irish poultry retail prices increased by almost 12% for the latest 52-week period (Kantar Ireland, 2023).

The outlook for the global poultry industry will be helped by improving demand and lower costs in 2024.

Global poultry production is expected to increase by almost 2% to 135 million tonnes. Europe’s market conditions look positive, but the industry faces pressure from rising imports, especially increased chicken imports from Ukraine.

Against a backdrop of Ukraine potentially joining the EU, which could happen as soon 2026, approximately 63% of accession goals to the EU have been reached. This will increase competition within the EU poultrymeat industry.

European consumer spending is expected to come under further pressure, and this squeeze on spending is likely to cause further switching into the chicken category, with pork pricing expected to remain at elevated levels (Rabobank, 2023).

In MENA, with poultrymeat being the most affordable meat in the region, government support is expected to underpin 4% output growth, with Turkey and Saudi Arabia expected to show the greatest growth.

Import demand is expected to increase in the region, reflecting a strong recovery in consumption.

AI remains a concern for the global poultry industry, and now that the virus has spread to most regions, increased global risk for production and trade will be evident (USDA, 2023).

If commercial flocks in any of the three key Brazilian producing regions are impacted, then the effect on global markets could be significant for the animal protein sector.

In China, import demand is expected to fall by 9% to 1.75 million tonnes, as sluggish consumption, especially within the food service channel, is expected to remain challenged.

The US is still expected to be the main supplier to this region.