The revival of poultry production is facilitated by its very high profitability, which encourages producers to increase their production capacity and increase the number of chickens. It is worth noting that the increase in profitability is observed despite the reduction in purchase prices, which is more than compensated by falling feed prices, according to analysts from Credit Agricole.
In recent quarters, a decline in poultry purchase prices has been observed, although they remain at a relatively high historical level, as analysts from Credit Agricole emphasize in the latest AGROmapa.
An increasingly strong recovery in poultry production in the EU
In the opinion of the authors of the report, the increase in poultry production among its main EU producers, in particular in Poland, contributes to lower prices. At the same time, the growing production of poultry in Spain is noteworthy, as it strengthens its position as the second largest poultry producer in the EU (after Poland).
“The revival of poultry production is supported by its very high profitability, which encourages producers to increase their production capacity and increase the number of chickens. It is worth noting that the increase in profitability is observed despite the reduction in purchase prices, which is more than compensated by falling feed prices,” analysts point out. “In the coming quarters, we expect an acceleration in the reconstruction of poultry production in the EU, which will support a downward trend in its prices. At the end of this year The factor that will slow down the price decline will be the expected recovery in demand,” they add.
Falling feed prices keep poultry production profitable
According to data presented by the bank, in the period from January to December 2023, the value of Polish poultry exports (meat, processed products and live poultry) decreased by 2.2%. y/y compared to an increase of 55.3%. in the same period of 2022, which, according to analysts, resulted from lower prices obtained by exporters, while the sales volume increased.
Improving production profitability on an annual basis
Analysts point to an improvement in the profitability of poultry production on an annual basis.
“The purchase price of poultry in January was PLN 5.10/kg (-18.1% y/y), and the price of poultry feed was PLN 1.69/kg (-26.2% y/y). ). As a result, the livestock/feed price ratio amounted to 3.02 in January compared to 2.72 a year ago, indicating an improvement in production profitability on an annual basis,” say analysts from Credit Agricole.
Taking into account the situation on the global and domestic poultry market, the authors of the report forecast that the purchase price of poultry at the end of 2024 will be approximately PLN 4.40/kg and approximately PLN 4.70/kg at the end of 2025.
Limited supply of eggs on the EU market
In recent months, the decline in egg prices has slowed down. As indicated in the agromap, this is due to the still limited supply of eggs on the EU market. In the following quarters, analysts from Credit Agricole expect production to revive in response to its high profitability, which will support a downward trend in egg purchase prices.
The following months will bring a decline in egg purchase prices
According to the data presented in the agromap, in the period from January to December 2023, the value of Polish egg exports increased by 13.4%. y/y compared to an increase of 99.0%. in the same period of 2022, which was the result of higher prices obtained by exporters, while the sales volume decreased.
Slight improvement in egg production profitability
The authors of the report noted that the purchase price of class M eggs in January was PLN 53.61/100 pieces (-22.4% y/y), and the price of feed for laying hens was PLN 1.47/kg (-25%). .2% y/y). As a result, in January the price ratio for 100 eggs/feed was 36.45 compared to 35.09 a year earlier, indicating a slight improvement in the profitability of egg production on an annual basis.
“Taking into account the prospects for the situation on the EU and domestic egg markets, we forecast that the purchase price of class M eggs at the end of 2024 will be approximately PLN 49/100 pieces and approximately PLN 52/100 pieces at the end of 2025. The main risk factors for our scenario poultry and egg prices is the course of bird flu in the next season in Europe (currently, the pressure from bird flu in Poland remains relatively low), as well as the pace of rebuilding the production base among the largest producers of poultry meat and eggs,” the analysts emphasize.
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