ATLANTA – Rabobank Senior Analyst Christine McCracken discussed market shifts that have drastically improved the outlook for global poultry production during the 2024 International Production & Processing Expo (IPPE).

In its “Global poultry quarterly Q1 2024: Outlook 2024,” Rabobank forecasted poultry to be the fastest-growing protein in the global animal protein market. Lower feed costs, which should drive a decline in prices, are expected to generate 1.5% to 2% growth, according to the report. These and other developments have improved the outlook for poultry production and consumption.

MEAT+POULTRY: Since December, has anything changed in the poultry market dynamics? Are you seeing any kind of subtle changes or significant shifts?

McCracken: Well, USDA came out with their early estimates, and they kept getting revised. And then Brazil, who was having some drought issues during planting, that's gotten a little better. China ended up with a much bigger crop on corn. So, there's been some shifts in the balance sheet that I think have drastically improved the outlook and that are a huge deal for poultry and pork.

Feed [price] has really been a challenge for them, and unfortunately the other costs haven't come down – you think about labor, interest. But in general, lower feed cost is a good thing for the poultry industry specifically.

M+P: HPAI was the big story last year and outbreaks continue. Where have the outbreaks left the industry?

McCracken: It’s obviously hit the layers more, but it continues to be a challenge from a trade perspective. We’re not able to get the same trade volumes into a few markets.

We’ve been successful, obviously with countries that hold up their end of the bargain when it comes to how they treat these outbreaks. China has been a struggle, as you may know, and we're hopeful that we'll continue to make progress there, but you know, with those states that are involved, it's been tough to get product exported to China, and that was a huge market for us last year.

For paws specifically — paw prices aren't horrible, but they're not where they were. And so that's hurt this year. And we still face a lot of competition from Brazil which hasn't had a commercial case of AI yet. So, they continue to absorb some of those markets and are very competitive on a price perspective.

M+P: Is discussion about HPAI vaccines making any waves in the industry?

McCracken: There's a lot of discussion, heated discussion, even within the US industry about how that will proceed. I think it's a discussion we'll continue to have. France obviously started using it and Germany is, I think, going to start from what I've heard.

M+P: So, for the global poultry market, does the outlook in the report from December remain moderately positive?

McCracken: I think we were expecting a pretty good year, and I think it will be a pretty good year. It won't be a, probably not an outstanding year, because there's still a lot we don't know.

M+P: Especially on the geopolitical side of things…What are the risks there?

McCracken: Our economist has been super vocal about the risks of disruption in the Red Sea because you've already got the Panama Canal with issues and then this. The biggest issue, as I understand it this week is, which I find fascinating, is if they are forced to ship around the Cape of Good Hope and land in Africa. There is not just a piracy risk, but apparently there are only so many ports. So, it's an infrastructure issue, and then it takes 10 to 14 days longer, so you're effectively reducing the number of ships available. You've seen rates go up.

It shouldn't impact anything we send to Mexico, obviously Canada, those are top markets for us. It doesn't really affect anything going through the West Coast. But when you think about Europe, that raises all kinds of challenges for them. And not just on the exporting of meat, but the feed side is really where they get hammered.