Although prices have been somewhat under pressure in Q1 2023, in its most recent report, Rabobank analysts are still optimistic about the outlook for global poultry markets. At a time when eggs are reaching record-high prices globally and competing proteins like beef and pork are expected to remain expensive in most markets, demand for poultry meat, the cheapest animal protein, remains strong. Having said this, ongoing high prices at a time of weaker economic conditions are leading to some demand erosion in markets with sizable populations of low-income consumers. This is happening in Africa and Asia in particular, where consumers are returning to cheaper, traditional plant-based protein sources.

Currently, performance varies between regions. For example, the US, Brazil, India, and Indonesia operate under difficult conditions, while conditions in Mexico, Japan, China, the Philippines, Russia, and Saudi Arabia are strong. Nevertheless, in most regions, the focus in the coming period should again be on the operational side, given ongoing high and volatile feed and energy costs, limited availability of breeding stock, high construction costs, and major avian influenza (AI) risks.

Over the course of the year, Rabobank analysts expect soybean and corn prices to drop 5% to 10% compared to Q1 2023 levels, mainly driven by expectations of good harvests in Brazil and eastern Europe and improving US forecasts. This will provide some relief for producers, but will still mean historically high feed prices in most regions. Meanwhile, energy prices, which have been volatile, depend on developments in the Russia-Ukraine war and competition for liquefied natural gas in global markets, especially once China’s economy normalizes following the removal of Covid-19 measures.

Rabobank analysts expect global trade to stay strong this year. Major importing countries and regions like Europe, Japan, China, Singapore, the Philippines, Saudi Arabia, and the Gulf States are operating under relatively tight conditions, due partly to supply challenges and partly to AI. Import volumes will likely rise, and prices will be affected by availability in Brazil and the US, which looks relatively abundant for this year.

The development of avian influenza will be a the big wild card for trade and poses an ongoing global threat. Some countries have already adopted vaccination programs, while others are mulling it over. AI has continued to spread further into Latin America, getting closer to Brazil’s southern production states, which cover more than 60% of the country’s production. If AI hits some of these states, the potential impact on global trade could be big. Major importing countries may choose to change their sourcing, benefiting alternative exporters like the US, the EU, Ukraine, Russia, Turkey, Thailand, and China. This would result in higher prices, and for some submarkets, like breast and whole birds, there would be insufficient supply, which could have an additional bullish impact on prices.