This ‘bullishness’ is driven by relative price support from high beef and pork prices alongside demand recovery, and a more balanced supply and demand situation in most regions of the world. This is expected to lead to an improvement in profitability for the global poultry industry.
“Under improved global market conditions, led by the North American region, a slight increase in global chicken prices is expected,” said Rabobank analyst Nan-Dirk Mulder. “We see an increasingly balanced market, where supply discipline is more the order of the day and improving margins will be the likely result. However, markets remain volatile and any change in fundamentals, especially from the supply and feed side, will impact global prices. Suppliers should look to keep production growth disciplined.”
Global feed prices are expected to decline in Q3 and Q4 based on current fundamentals and a good crop outlook for wheat and soybeans.
Despite this positive outlook, the possible return of volatility in feed prices remains a threat to the poultry industries in all regions as stock levels remain low.
Global grains and oilseeds prices have recently increased and old crop grain markets are currently tighter than expected.
In addition, ongoing concerns about the situation in Ukraine and the potential threat of an El Nino event are creating some market volatility. Animal disease outbreaks also remain a concern.
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