Poultry Sector: Demand Recovery, Concerns about Supply

The year 2023 brought favorable conditions for the Dutch poultry sector, with feed margins surpassing the average. Limited supply, partly due to the transition to Better Life 1-star and the impact of avian influenza, led to higher meat prices. Although the market exhibited stability, prices have been declining since October due to increased availability in the European market, particularly of breast meat.

In Northwest Europe, chicken production is decreasing, especially in the Netherlands (-2.7%) due to the shift towards Better Life 1-star. Belgium shows a slight decline, while Germany and the United Kingdom are growing. It is anticipated that in 2024, the Netherlands, Belgium, and Germany will produce less, primarily due to the transition to new concepts involving slowly growing chicken meat.

Recovery of Disposable Income Stimulates the Growth of Chicken Concepts

Despite a 30% increase in chicken prices in supermarkets, the recovery of disposable income seems to make consumers less price-conscious. Changes in consumption patterns indicate a shift towards 'cheaper' meals and snacks. Outlooks for 2024 suggest a continuation of price-conscious shopping but with less emphasis than in 2023.

Stable Export of Chicken to Germany, Pressure on Other Export Destinations

The export of Dutch chicken gradually declined to 310,000 tons in the third quarter of 2023, mainly due to reduced supply and increased competition from Central and Eastern Europe. Export to Germany remains stable, but other markets such as the United Kingdom and France are under pressure. Further export decline is expected in 2024 due to the transition to Better Life 1-star.

Persistent Increase in Chicken Imports, Especially from Germany and Ukraine

Netherlands observes a rising import of chicken, particularly from Germany and Ukraine, with Ukraine dominating the European market with breast meat. This leads to price pressure in Europe. Import growth from Ukraine is expected to persist and exert pressure on breast meat prices.

Continuous (Slight) Decrease in Feed Prices

After a strong downward trend in feed prices between July 2022 and August 2023, a slight further decrease is predicted. Abundant global stocks of grains and oilseeds are expected to result in a gradual decline in feed prices in the 2023/2024 season.

2024: Balanced Market, but Pressure on Bulk Segment

Rabobank is cautiously optimistic about the 2024 poultry market, expecting demand recovery in the Netherlands and Germany. The European Chicken Commitment (ECC) is anticipated to double the supply of slowly growing chickens. Competition from Central and Eastern Europe persists, and avian influenza outbreaks in Europe create volatility in the market.

Rabobank.nl