Market Trends of europe poultry meat Industry
Higher production costs and various disease outbreaks are hindering the poultry production
- In 2022, the region experienced a decline of 1.88% in production compared to 2021. Europe is a major importer and exporter of poultry meat, and it is in the process of becoming a major trading partner in the global poultry meat market. Establishing new trade deals is key to expanding the industry and boosting the European economy. An estimated 98% of all EU chicken production consists of broiler meat. The remaining 2% is derived from laying hens and cocks. The poultry production in Russia retrieved after a fall of 0.64% in 2021. In 2022, the market grew by 0.89% compared to 2021. The Russian poultry industry is impacted by several factors, including a sharp rise in production costs. The price for some feed additives in the Russian market increased by 260% in a Y-o-Y comparison. As a result, the Russian government approved a USD 15 million subsidy to the poultry industry to halt the unprecedented drop in production.
- The German poultry production industry is famous for the short distances between farms and slaughterhouses. The poultry is processed under strict hygienic conditions. The processing is also subject to supervision by a vet. Poland is also a major producer in the region. A major share of Polish chicken meat production is exported primarily to the food service industry. Polish poultry production was expected to face significant challenges with higher feed and energy costs in 2023. The industry operates on a short 2–3-month production cycle, which is very reactive to outside events. According to the European Food Safety Authority (EFSA), as of June 2022, there had been 2,398 outbreaks of highly pathogenic avian influenza (HPAI) in 36 European countries, leading to the culling of 46 million birds. The impacts were most severe in ducks, turkeys, and laying hens.
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Higher production costs and supply disruptions due to the Russia-Ukraine conflict are leading to price growth
- The prices of poultry in the region grew by 11.53% from 2017 to 2022. The poultry price hike in the region has resulted in a combination of strong demand, tight supply, high input costs, and overall inflation. In 2022, imports of poultry into the EU largely remained constant. Additional imports from the United Kingdom, Brazil, Thailand, and China compensated for the loss of imports brought on by Russia's military aggression on Ukraine in 2022. As the foodservice industry returned to normalcy with ease in restrictions, the price of poultry meat increased in 2022, with a projected 1.5% rise in the total European poultry imports.
- Higher local poultry prices in the EU are helping competitors, such as Brazil, to gain more EU market share. Brazil was also expected to export around 35% more poultry to the EU in 2023. Ukraine, which benefitted from a suspension of duties due to the ongoing war with Russia, was exporting to the EU at higher volumes in 2022 than in 2021.
- The cost of poultry feed is also driving the price of chicken. The costs of corn and soybeans have been higher than in previous years, boosting the price of chicken once it reaches a restaurant or grocery store. Animal feed accounts for up to 55% of the farm gate value of poultry. Therefore, higher-priced poultry may disproportionately impact lower-income families during the forecast period. The broiler prices in the EU during the first half of 2023 varied from USD 1.85/kg of carcass to USD 4.27/kg. The average prices of broilers in the EU grew by 3% in the first half of 2023 compared to the previous year. In June 2023, the Netherlands recorded the lowest price of USD 1.81/kg for carcasses, and Denmark had the highest price of USD 4.45/kg for carcasses.
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