Keeping chicken affordable in times of major cost and supply challenges

Its latest poultry report said the outlook for the global poultry industry in Q4 2022 and early 2023 remained strong, despite the big challenges across global poultry and some recent setbacks in North America.   

However, with current major cost inflation and supply chain disruptions, the industry should try to keep offering affordable solutions to consumers to reduce the risk of major demand liquidation.  

‘Profitability setbacks' ​

“Some setback in profitability has been seen in the bullish North American markets due to rising supply. European prices have stayed high due to production remaining below 2019 levels,”​ explained Nan-Dirk Mulder, Senior Analyst – Animal Protein at Rabobank. 

The most pressing challenges for the industry stem from higher input costs across feed, distribution and labour – energy costs also remain a major concern.  

“Especially in Europe, the industry should prepare for high cost-impact on production and storage, and potential disruption of availability of inputs like packaging material and CO2 for gas stunning in case of a shut off. Other regions, especially in the Southern Hemisphere, will be less impacted,” ​read the report. 

Uncertain cost factors ​

“These rising and uncertain cost factors, ongoing avian influenza cases and associated trade impacts, together with ongoing high construction costs, will continue to constrain supply. Most markets are therefore expected to stay above breakeven, with especially strong conditions in the EU, Southeast Asia, and Latin America.” ​

The report suggested the focus for the global poultry industry should be on excellence in operations and highlighted that being efficient in times of inflation, major supply challenges, and disruptions can make the difference between good and weak performance. 

Meanwhile, self proclaimed chicken king and 2 Sisters Food Group owner Ranjit Singh Boparan warned the UK faces a food security crisis​​ while consumers are ‘held hostage’ by further price rises as the cost of supplies of CO2 skyrocket.  

The warning followed the announcement that a key supplier of CO2 to his poultry processing operations had hiked prices up to 20 times their current levels.