Rabobank made a positive outlook for the global poultry market

Rabobank's latest Poultry Report shows that market conditions for the global poultry industry have improved significantly, with major regions operating at break-even or enjoying favorable terms.

According to the report, the reopening of the economy in Europe and America helped the market recover significantly and supported global trade. The big exception is Southeast Asia, where the Delta strain is challenging the local situation. In Europe, supply is on the rise again, along with growing concerns about oversupply.

Looking to the future, Rabobank notes that the outlook for global poultry MEAT markets remains strong, with continued strong demand and limited supply, relatively stable but high feed prices, and a further increase in trade volumes due to a recovery in the catering sector. However, in some countries this may cause food prices to rise.

“The situation with covid-19 remains unpredictable. If the COVID-19 situation worsens again, it could shake up markets and disrupt supply chains in some more vulnerable places such as Europe and Southeast Asia,” said Nan-Dirk Mulder, senior analyst at Animal Protein at Rabobank.

Global trade has improved, but trade issues remain a concern

The agency said global trade rebounded significantly in the second quarter of 2021, with trade volumes reaching historic highs. Brazil and the US have benefited the most from strong trade, while exports from Europe, RUSSIA and Ukraine have been lowered by bird flu and a slowdown in Chinese imports. However, global trade issues remain a key issue as avian influenza continues to disrupt trade flows.

“In terms of the market outlook, we expect strong demand through the end of 2021 despite these trade challenges. Most markets operate in a tight supply environment with increased demand for catering services. This will support strong trade flows,” Mulder said.

Key issues that could negatively affect the global poultry trade are avian influenza, COVID-19, labor shortages and container availability.

“The issue of container availability could potentially limit poultry trade volumes at the end of the year. If that happens, it will cause prices to go up,” Mulder explained.

 Current supply issues will challenge the industry

The global supply of poultry meat is expected to remain relatively tight in many regions due to problems with labor availability, which particularly affects production in the US, Europe and Asia, the report notes. There are serious labor availability issues in businesses around the world due to stringent HEALTH requirements due to COVID-19 and immigrant workers returning home. Addressing this issue will be a key issue for many poultry producers. In addition, the ongoing risk of bird flu outbreaks and high feed prices are impacting supply around the world.

Feed prices expected to remain high

According to Rabobank experts, feed prices will not rise much. Only a slight increase in wheat prices is expected due to weaker supply from the EU and Russia. However, soybean meal prices are falling due to rationalization of demand and a more oil -oriented approach by processors.

Looking ahead, Rabobank said that the return of wet weather - after a year of drought - in Brazil would again make the country a key producer as soybean planting is due to begin in September. However, a possible return of La Niña conditions in the fourth quarter could lead to another drought.

Meanwhile, in the US, investors are looking forward to the results of the soybean and corn crops.