UTRECHT, NETHERLANDS — The global poultry outlook is improving, according to the latest animal protein report from Rabobank, which credits growth in poultry consumption as the driving force behind this positive forecast. After four years of highly disruptive conditions, global poultry markets are finally moving toward more “normal” market conditions, the Dutch banking company said.

Despite a 2% jump in global chicken prices, chicken remains a competitively priced protein option, considering prices of pork and beef have increased by 4% and 5%, respectively. Rabobank noted that demand for value-added poultry products is improving as spending power gradually rises and costs decline.

“Most of this global growth has been driven by strong local market conditions rather than trade,” said Nan-Dirk Mulder, senior analyst of animal protein at Rabobank. “This is particularly true for emerging markets in Southeast and South Asia, Africa and Latin America. Lower feed prices have made chicken more affordable, supporting demand recovery.”

Feed prices reached their lowest value after declining for two years. However, they increased for the first time in two years by 1% due to weaker-than-expected harvest predictions in Brazil, North America and Europe.

Market conditions in the United States and the European Union are strong this year with relatively high demand, controlled production growth and rising prices. China and Japan are the main exceptions to the well-performing market environment. The industry experienced overly ambitious growth rates above 3% in China and Japan, negatively impacting profitability. Likewise, Brazil has been heading toward an oversupply. To help balance the markets, Brazil is making production cuts.

The report predicted added competition in global trade compared to the past two years due to shifts in trade flow.

China’s lower import volumes, for one, will shake up global trade, increasing competition. In the first quarter of 2024, global poultry trade fell by 5% year-over-year, with a 40% reduction in Chinese imports being a notable cause.

“The weak and oversupplied domestic chicken market in China was the primary driver behind this significant drop in trade,” Mulder said. “Key exporters to China — Brazil, the US and Russia — have all felt this decline. We expect that these countries will seek alternative markets to offset the impact of reduced Chinese trade, particularly affecting chicken feet and leg markets.”

Furthermore, the new EU import quota for Ukraine will impact global trade in breast meat and whole chicken, particularly as Ukraine looks for alternative markets.

Ongoing avian influenza outbreaks continue to pose a critical concern for the global poultry industry. Biosecurity requirements and mitigation efforts are far from a thing of the past. Risks are currently shifting back into the Southern Hemisphere, with recent outbreaks in Australia and ongoing cases in South Africa and Latin America. These outbreaks could lead to sudden shifts in trade flows, Rabobank warned.

Pressure from avian influenza has led to interest in vaccination. Several Latin American and Asian countries have already started vaccination. France is the first exporting country and EU member state that has begun vaccinating.

“The experience looks promising so far, with a significant reduction in cases in high-risk areas in the Southern Hemisphere,” the report said. “This trend may encourage other EU countries to adopt vaccination as a valuable tool for veterinarians and farmers to mitigate AI risks.”