Rabobank: Poultry to lead 2024 despite market volatility

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Rabobank: Poultry to lead 2024 despite market volatility

Poultry being the most budget-friendly protein lends itself to being consumers’ top choice.

Rabobank has released its global poultry outlook for Q1 2024 which expects poultry to be the fastest-growing protein of the year despite the market volatility brought on by avian influenza and global conflicts.

Growth for the global poultry market is forecast at 1.5% to 2%, an improvement from 2023 which saw only 1.1%, but still lower than the long-term average of 2.5% per year.

The multinational agriculture research organization attributes global poultry market growth to declines in pork and beef markets and price-driven consumers drawn to the comparatively less expensive poultry and eggs.

But, “Price-driven markets will be an ongoing challenge for producers in 2024, as the industry will still face relatively high costs and potential volatility,” according to Rabobank. “Feed costs will move slightly lower, but global geopolitical issues like the Ukraine war, turmoil in the Middle East, and weather risks could affect feed costs, as well as oil and gas prices.”

Brazil

Brazil saw improved prices and increased exports in 2023, and Rabobank expects that to continue into 2024. However, El Niño is threatening the country’s crop production.

“Intense heat, combined with lower-than-expected rainfall, has impacted feed prices in the domestic market due to delays in soybean planting and, in some regions, replanting because of the lack of rain,” according to Rabobank’s report. “Higher prices in Chicago and the drop in soybean processing in Argentina have raised concerns, with local demand increasing due to the risks of higher prices.”

Soybean planting delays will also delay corn planting which will likely result in a smaller harvest.

US

In the U.S., Rabobank expects poultry production to drop in early 2024, but sales should go up, especially when competing against higher-cost proteins.

However, “New HPAI outbreaks in key growing regions and ongoing protectionist trade policies will likely weigh on 2024 trade,” according to Rabobank.

China

Rabobank reports that China is experiencing price volatility due to weak demand, short-term supply increases and slow pork prices, however the organization predicts demand to recover in 2024, subsequently increasing imports.

Decreasing feed prices should also help reduce production costs.

Europe

Poultry will still be the top protein choice for European consumers in 2024 since it is less expensive than the other proteins, but some of 2023’s challenges are carrying over into the new year.

“The biggest issue for the EU poultry market is a sharp rise in breast meat supply,” said Rabobank’s report. “We estimate Europe’s breast meat supply has risen by 220,000 metric tons in 2023, mainly due to increased imports, which represent 75% of growth, especially imports from Ukraine (+110,000 metric tons, or 50% of growth).”

Source: wattagnet.com