October 2, 2013

Buoyed by its slowly growing domestic demand, the EU-28 broiler sector is expected to continue to grow in 2013 and 2014.

Poultry is less affected than other meats by the economic recession because it is cheaper and more convenient.

The overall EU-28 production in 2013 encompass various situations, but the broiler meat production is foreseen to increase from 2012 in all major EU producing countries, including UK, Benelux, Spain, Poland, Germany Italy and France.

Broiler production costs were directly affected by the hike in global grain prices in 2012 as it did in 2010, but data shows that producers were able to pass most of the increase to their domestic customer, thus keeping their operational margins or only lowering them marginally. The significant decrease of grain prices in the EU-28 since the spring of 2013 will certainly increase operating margins, even if retail prices decrease, which is yet to be seen.

In light of slightly decreasing imports and stable or slightly increasing exports, the EU-28 broiler trade surplus is expected to increase in 2013 and 2014. Brazil and Thailand remain the largest suppliers of broiler meat to the EU-28. The opening of the EU-28 market to Thai uncooked broiler meat on July 1, 2012 led to a significant increase of export of Thai salted and frozen broiler cuts and parts to the EU-28 to the detriment of Brazil exports. It has been reported that the quality of Thai broiler meat exports better suits EU importers' need.

Mainly due to the suspension in July 2013 of all EU-28 poultry meat export restitutions which is going to negatively impact French exports of frozen whole broilers to the Middle-East region, especially to Yemen and United Arab Emirates, EU-28 broiler meat exports are now expected to remain stable in 2013. The Saudi market seems to be more flexible to the end of export subsidies, capable of absorbing higher prices without visible impact on trade volumes. On the other hand, exports of low-priced cuts and mechanically deboned meat (MDM) to Sub-Sahara Africa, especially South Africa and Ghana will continue to grow. South Africa is now becoming the largest customer of EU-28 broiler meat, close to Saudi Arabia. Since lower production costs due to lower grain prices should increase EU-28 broiler price competitiveness, exports are expected to resume their growth in 2014.

While total meat consumption in the EU-28 has been negatively impacted by the economic recession, poultry meat, which is the cheapest source of protein, was less affected. Its consumption per capita is stable or slightly increasing. In the EU-28, sales of cheaper broiler cuts also increased faster than sales of more expensive parts, such as breasts or sales of whole birds.

After a temporary surge, due to production hikes in the UK, EU-28 turkey production is now expected to fall in 2013 and 2014. Turkey meat imports should remain stable in 2013 and 2014 under import quota control. French turkey exports to Africa are expected to remain stable as well as German and Dutch exports to Russia. After stabilisation in 2012, due to in-store promotions in UK, overall turkey meat consumption in the EU-28 is expected to resume its decrease in 2013 and 2014.