UTRECHT, THE NETHERLANDS – Improving economic conditions driven by increasing vaccination levels and reopening economies will deliver strong prices for poultry – and volatility due to supply challenges, Rabobank said in its Poultry Quarterly Q1 2022 report.
Global demand for poultry will be strong. Rabobank expects global growth to reach 2% as general economic conditions improve throughout the world. However, supplies of poultry are expected to remain tight in 2022 on high input prices, and labor and logistics challenges.
“In 2022, it is highly unlikely that food prices will go back to their five-year averages, as commodity prices are now supported by inflation in the general economy, low global stock levels, and labor shortages in many countries,” said Nan-Dirk Mulder, senior analyst – Animal Protein at Rabobank. “These high input prices will push producers to focus on yields, procurement, and efficiency in the value chain.”
Rabobank expects feed prices in particular to stay high and volatile, with a 5% increase in feed commodity costs in the first half of 2022. Rabobank’s outlook for the US poultry industry is strong profitability with a 2.4% increase in production while supplies of other proteins tighten. In Brazil, producers can expect stronger export demand as domestic markets for poultry weaken. Stronger prices and tight supplies of poultry is the outlook for Europe, where headwinds include avian influenza outbreaks in the EU and UK, labor challenges and high costs.
“A big challenge for producers in 2022 will be managing volatility in demand in a context of supply chain challenges,” Mulder said. “At the same time, we see fast growth in online food distribution and home delivery in many markets.”