October 19, 2011

Outlook remains neutral for EU broiler output

Higher demand for poultry meat albeit continued strong prices for feed and fuel present a rather neutral outlook for broiler producers in Europe over the next 12 months.

The Short Term Outlook for all commodities, covering 2011 and 2012, has been produced for the first time by EU Commission experts and will be compiled three times a year.

Overall, it suggests the macroeconomic situation in the EU and worldwide is improving slightly, with "steady, albeit fragile growth in GDP, a slow reduction in the unemployment rate and an increase in population".

This is expected to benefit demand meat - and chicken in particular - which would "remain on an upswing, while beef consumption is expected to decline further".

"After a 2.4% increase in 2010, EU poultry meat production is expected to remain at the same level in 2011 and increase again slightly in 2012, mainly triggered by a higher EU domestic demand," the report states.

"World demand for poultry meat is growing, which will benefit EU exports to three countries. It is expected that poultry meat exports will increase by 18.8% in 2011 and decrease by 1.6% in 2012.

"Chicken is expected to continue benefiting from its 'cheapest meat' image and, overall, EU poultry meat consumption is expected to increase slightly (by 0.8%) in 2012."

However, the report warns that prices for energy and protein feed components, and other essential feed ingredients, have been increasing since 2010 and are expected to remain at elevated levels.