Poultry's consistently increasing efficiency and productivity is what makes it continue to lead the growth of meat production worldwide. However, in 2023, the major supply challenges for the poultry industry will remain input costs, feed and energy prices, distribution, labor costs and availability as well as avian flu.
According to Rabobank analyst Nan-Dirk Mulder, the demand for poultry is expected to remain strong but likely to exceed the available, limited supply. Especially in times of more price-driven consumer behavior, poultry is the preferred protein source. Economic downturns tend to impact market conditions and consumer spending, typically leading to an increased demand for affordable chicken, eggs, cheaper cuts and conventional poultry products.
Especially with high feed prices, poultry will be the fastest-growing animal protein due to its price competitiveness. In 2023 however, growth in the poultry industry will come relatively slow, with Asia and Latam being some of the faster-growing markets. Asia, in particular, will be the leading global market in the long term, with 65% of global growth, which means ongoing opportunities for investments.
In 2022, like in previous years, Asia made up almost 40% of the global poultry production, according to FAO. North America’s 19% share will remain a large contributor, followed by South America and Europe. According to the US Department of Agriculture (USDA), the production share of the world's top five meat producers (China, USA, EU, Brazil and Russia) is expected to gradually decline from its current level in the coming years, due to a decrease in production from the EU and an increasing number of global producers. India is predicted to take Russia's spot in the top five by 2031.
Over the next decade, poultry meat production is expected to expand due to increasing demand from growing populations and rising incomes in developing countries. Poultry meat will also become more accessible worldwide due to decreased production costs and improvements in meat yields and feed conversion ratios (FCR). The poultry industry is constantly improving efficiency and productivity, which is the reason why this source of protein will continue to lead the world’s meat production growth.
However, poultry processors should keep a focus on efficiency and sustainability to be key in times of high costs, rising food demand and limited resources. Poultry processors should also be aware that consumers with more money to spend will ask for more modern distribution and digital, smart value chains, such as e-commerce. To meet these challenges, the poultry sector will shift further to a more consolidated, global, multispecies industry with a higher level of integration.
Especially in times of more price-driven consumer behavior, poultry is the preferred protein source.
Nan-Dirk Mulder
Rabobank animal protein analyst
From a sustainability standpoint, producing poultry meat requires a smaller inventory of animals or capital. Poultry has the advantage that its feed conversion ratio is low compared to other animals and decreasing, which means less additional feed is needed. In addition, poultry’s short production cycle, along with its price point compared to other protein sources will allow producers to react quickly to market shifts.
During times of limited grain supplies, as we’re experiencing now due to the war in Ukraine, these efficient characteristics make the poultry industry more resilient. The high efficiency and sustainability of poultry is expected to continue benefiting the industry in the coming decade.
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