The global poultry sector is getting ready for a promising third quarter after the recent reports released by Rabobank and the USDA. Both conclude that lower feed prices across poultry value chains are driving this recovery, while growing trade is a key factor in the global poultry outlook.
According to Rabobank’s report for the third quarter of 2023, the outlook for the global poultry industry is expected to be stronger than in the first quarter. The bank’s experts explain that the drop in feed prices has been a determining factor for this optimistic forecast. The turning point from high to lower feed cost levels noted by Rabobank, usually marks a period of rising margins for the industry.
The drop in input costs is partly due to relative supply shortages in regions such as Europe, Mexico, Russia, the Philippines, and Malaysia. Meanwhile, the supply balance is improving in countries like the United States, Japan, and Thailand. Additionally, rising prices for competing meats, like pork and beef, further improve poultry’s relative competitiveness.
For the second half of 2023, Rabobank expects feed prices to continue to drop 10% to 15% below 2022’s historic levels. Although costs will remain high, they will be significantly below recent peak levels. Record corn and soybean harvests in Brazil, and optimistic projections for US corn and soybean and European wheat harvests are behind the expected lower feed prices.
Rabobank also highlights an increase in global trade during the first quarter of 2023, which signals an ongoing trend of increasing imports as governments are opening their markets to reduce price inflation in their domestic markets.
At the same time, the latest quarterly report from the United States Department of Agriculture (USDA) on global livestock and poultry markets and trade provides encouraging prospects for the poultry sector, particularly for chicken exports in 2023.
According to the report, global chicken production forecasts remain stable at 103.5 million tons, showing little changes from USDA’s April forecasts. However, it should be noted that the poultry sector has not been immune to the uncertainty and challenges posed by the global scenario.
For major chicken producers, such as Brazil, the European Union, and China, the USDA report indicates that there have been no significant downturns. This is due to the prospects for improved feed prices and the absence of major outbreaks of highly pathogenic avian influenza, which have allowed them to maintain relatively stable production levels.
One of the most interesting aspects of the report is the slight increase in expected chicken exports for 2023. A small but sustained increase of less than 1% from the April forecast is expected, reaching 13.8 million tons. Brazil leads the expansion with a 2% increase in shipments supported by the absence of Avian influenza in the commercial sector, competitive prices, and extensive product offerings fulfilling the needs of various markets.
However, the report also underscores the need to control Avian influenza in the poultry industry. Although sustained growth is expected in this market, it is key to keep a close eye on avian diseases and other factors that might impact trade flows.
The full reports are available here: