Poultry Quarterly Q2 2021: The Bumpy Road to Recovery

The outlook for the global poultry industry is gradually improving, but big differences remain between countries, and global poultry trade is still very competitive. The industry is facing major challenges due to Covid-19-related market disruption, very high and volatile feed prices, avian influenza (AI) in the northern hemisphere, and volatility coming from a bumpy recovery in countries affected by African swine fever (ASF). Key for producers will be to have a very disciplined supply growth, a focus on cost reduction via procurement, production efficiency, and feed formulation, as well as being prepared for big swings in demand driven by Covid-19-related government decisions.

Report summary

As countries reopen foodservice, and while their control of Covid-19 improves, the poultry industry will start to recover. On average, 35% of global poultry consumption is via foodservice. “In countries where several of these disruptive factors come together, broiler prices have risen to high levels. Some governments have started to intervene to protect their economies against price inflation,” according to Nan-Dirk Mulder, Senior Analyst – Animal Protein. This sort of situation could occur more often in 2021, driven by Covid-19, AI-related disruption of breeding stock, and high feed prices.

Some highlights from this report include:

- The best performing industries are the US, Mexico, Japan, and Russia, while the EU, South Africa, and Thailand are still suffering from oversupply.

- AI has impacted production in Russia, East Asia, and Europe. It has also disrupted trade flows of hatching eggs, DOCs, and poultry from Europe. ASF recovery could lead to an oversupply of poultry in China and Vietnam.

- Feed prices are expected to stay high due to the combination of strong Asian demand for feed grains, La Niña’s impact on production, and market speculation. This will keep feed prices high and volatile.

- Global trade is still highly competitive, with trade levels still down (-4%) and low prices. This market will recover slowly due to its high dependence on foodservice and the still high stock levels in import markets.

  • Nan-Dirk Mulder

    Senior Analyst - Animal Protein
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  • Justin Sherrard

    Global Strategist - Animal Protein
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  • Matz Beuchel

    Data Analyst — Animal Protein
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  • Andrick Payen

    Analyst
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  • Angus Gidley-Baird

    Senior Analyst - Animal Protein
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  • Ben Santoso

    Senior Analyst - Animal Protein
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  • Beyhan de Jong

    Analyst – Animal Protein
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  • Blake Holgate

    Analyst - Animal Protein, Sustainability
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  • Christine McCracken

    Senior Analyst – Animal Protein
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  • Chenjun Pan

    Senior Analyst - Animal Protein
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  • Dennis Voznesenski

    Analyst - Grains & Oilseeds, Animal Protein
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  • Don Close

    Senior Analyst - Animal Protein
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  • Dustin Aherin

    Analyst - Animal Protein
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  • Eva Gocsik

    Analyst - Animal Protein
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  • Gorjan Nikolik

    Senior Analyst - Seafood
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  • Shiva Mudgil

    Analyst - Dairy, F&A Supply Chains
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  • Wagner Yanaguizawa

    Analyst - Animal Protein
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