November 16, 2012

EU poultry industry profit plummets to historic lows

EU's poultry industry profit margins are at historic low levels.

This is according to Rabobank's Nan-Dirk Mulder who has told those attending the recent Poultry and Egg Conference.

Mulder is an associate director of Rabobank's Animal Protein, Food and Agribusiness advisory and research section. He said, "The new reality facing the global poultry market is putting increased pressure on performance in traditional production countries. Increasing globalisation in the poultry market means that companies from emerging markets are taking the lead, with Europe taking a back seat.

"There will be on-going growth in the market but with regional differences and a changing competitive landscape, with import competition remaining fierce."

The Irish poultry industry is estimated to be worth EUR154 million (US$197 million) annually at farm gate level, with poultry meat exports amounting to EUR210 million (US$268 million) in 2011. Ireland is in line to share in overall market growth, but imports will increasingly challenge domestic suppliers, according to Rabobank.

Ireland needs to focus on the 'Irish Brand', and focus on fresh poultry products and added value, said Mulder. In Ireland, poultry is gradually becoming the number one type of protein consumed, although overall meat consumption is declining very slightly.

Increasing imports will challenge domestic suppliers. The future of the Irish poultry market looks relatively good. Ireland will benefit from market growth in general but will need to focus on retail access and look to benefit from UK market access and valuable by-products. In industry terms, Ireland should increase consolidation, adjust its industry to the volatility and improve efficiency in farming and processing.