Reopening economies, increasing vaccination levels, and stronger economic conditions are all expected to be tailwinds to global poultry markets in 2022, Rabobank’s senior animal protein analyst Nan-Dirk Mulder said in the bank’s Poultry Quarterly Q1 2022 report.
“This improving global market context will be a bumpy road, though, with ups and downs following Covid-19 developments,” the report said in its overview. “The industry will need to be ready to adjust sales channels in response to government measures. The operational side will also see challenges, as feed and other input costs, like freight and energy, are expected to stay high. The availability and cost of labor has become a big issue in many countries, restricting production in some markets. Logistics has become more complex, on limited reefer availability and high costs. High steel costs, expensive labor, and worries about higher interest rates are slowing greenfield investment and will reduce supply growth. The combination of stronger demand and these supply challenges will create an environment of stronger prices, which will push producers to focus on yields, procurement, and efficiency in the value chain to reduce feed and labor use. It will also lead to new food security efforts to reduce inflation and keep poultry affordable, especially in emerging markets.”
Rabobank went on to set an expectation of a five percent increase in feed commodity costs in 1H 2022, including both feed and feed additive prices. Demand is expected to remain strong and stock levels low, and inflation is expected to make its impact on feed prices as well.
“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, including high shipping costs and energy and fertilizer prices, as well as by labor shortages in many countries.”
Avian influenza pressure in Europe, Asia, and Africa will also present challenges for poultry production, which will mean “operating with flexible supply chains and with a strong emphasis on cost reductions and efficiency.
Global poultry trade will track global macroeconomic conditions, with global trade hitting a record in 2021.
As far as the U.S. supply outlook, Mulder said, “Our outlook reflects modest expansion in the breeding flock [in the U.S.], some improvement in hatchability, and gradual stabilization and growth in weekly chick placements vs. the prior year.”
The report goes on to analyze global markets, including Mexico, Brazil, Europe, Russia, South Africa, India, China, Japan, and Thailand.
Rabobank’s RaboResearch Food & Agribusiness Animal Protein Global Sector Team produced the report, which, in addition to Nan-Dirk Mulder, includes Justin Sherrard, Chenjun Pan, Christine McCracken, Matz Beuchel, Shiva Mudgil, Wagner Yanaguizawa, Angus Gidley-Baird, Don Close, Eva Gocsik, Gorjan Nikolik, Genevieve Steven, and Novel Sharma.
