EU’s poultry producers expect modest expansion in 2022

The ongoing effects of COVID-19 and outbreaks of avian influenza harmed broiler producers in the European union this year but better times are forecast for 2022.

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lumenetumbra | iStock.com
lumenetumbra | iStock.com

With lasting impacts from avian influenza (AI) and subdued foodservice demand, the European Union’s poultry producers have had a difficult 2021 but, according to "EU agricultural markets short-term outlook — autumn 2021," published in October, production should rise slightly in 2022.

The outlook notes that AI has had the greatest direct impact on duck, turkey and egg farms, and has been particularly difficult for small poultry producers.

However, the effects of subdued demand from foodservice due to COVID-19 restrictions and high feed prices have been felt across the industry and, as a consequence, poultry producers have a adopted a more disciplined production strategy.

First half difficulties

As 2020 ended the European market was in oversupply. With production still rising and consumption contracting, this put pressure on prices.

During the first six months of 2021, output contracted by 4.7% compared with the first half of 2020, and prices rose.

All of the EU’s major poultry-producing countries reported a contraction, with, for example, the Netherlands down by 17%, Poland down by 8.6%, Spain reported output to be 5.7% lower and France and Germany seeing falls of 4.9% and 3.4%, respectively.

For the second half of 2021, a degree of recovery is expected to be recorded, bringing the overall rate of decline to 0.9% for the year as a whole.

Broiler prices in the bloc peaked in mid-June but subsequently declined. Nevertheless, prices remained significantly above the 2016-2020 average.

Provided that demand from countries for foodservice returns to normal and the impacts of AI continue to decrease, EU production could grow by 1% next year, DG Agri, author of the outlook, believes. However, as Europe now heads into winter, much will also depend on whether there is a resurgence in COVID-19 cases and how European governments respond.

Exports down, but recovery predicted

Exports have been harmed by countrywide or regional AI-related import bans on EU products. More positive for Europe’s producers, however, has been the UK decision to postpone the implementation of its sanitary and phytosanitary controls on EU exports from October this year to July of next.

The EU’s poultry meat exports were down by 13% over the first half of this year.

Sales to the Philippines, for example, contracted by 61%, while those to Hong Kong were down by 68%, but the sector’s performance was not universally negative. Shipments to Ghana rose by 26% while those to Ukraine were up by 26%, however, these increases were not enough to compensate for where European sales declined and exports are expected to end the year 5% lower than in 2020.

Imports of poultry meat into the EU fell by 13% during the first half, primarily due to subdued activity in the foodservice sector

Looking ahead, assuming that AI bans are lifted, EU poultry meat exports next year are expected to be flat, DG Agri believes.

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