Short-term prospects for the development of poultry farming in the EU in the framework of the Ukrainian crisis

Imports of some agricultural products to the EU from Ukraine increased significantly last year and put pressure on regional markets such as poultry meat and coarse grains. Last year, EU imports grew by about 15% (+105,000 tons) due to increased supplies from Ukraine. This year, this figure may be lower due to the uncertainty with production in Ukraine . At the same time, exports from the EU fell by about 9%. 

The European Commission's latest Short-Term Agriculture Outlook says that EU poultry meat production fell by around 1.7% last year compared to 2021. This was driven by a decline in major producing countries such as France (-12%) and Italy (-9%).

Impact of bird flu

The report notes the continued spread of highly pathogenic avian influenza (HPAI) and says its longevity means it is now treated as a year-round threat rather than a seasonal problem. While its direct impact on poultry production is limited, as production could recover quickly, the damage to EU exports caused by related bans from third countries is more significant.

Recovery of production?

Due to limited supply and good demand, broiler prices in the EU have continued to rise and have reached high levels in recent months, partly helping to shift high feed and energy costs down the chain. Prices have stabilized since the beginning of the year and as feed and energy costs are now starting to come down from the very high levels seen last year, there could be some recovery in production this year.

The European Commission estimates that EU poultry meat production is likely to grow by around 1.1%, with poultry demand benefiting from a lower consumer price compared to beef and pork. This could support growth in EU poultry consumption up to 2.5% this year.

Trade Competitiveness

But the deterioration in the competitiveness of exports from the EU will continue, the report says, due to the increase in imports from Brazil. Brazil is more competitive in terms of feed and energy, so it continues to trade poultry meat at a lower price. Overall, EU imports are expected to rise by another 7% in 2023 to meet additional growth in EU demand.

And, despite the observed downward trend in prices in the EU, it is likely that some other markets, especially Brazil, may remain more competitive, and therefore exports from the EU could fall by another 5%, the report says.