Weekly Product Updates

W40: Chicken Update

Frozen Whole Chicken
Published Oct 13, 2023

In W40 in the chicken landscape, Tridge’s analysis indicates that global chicken prices have demonstrated a consistently bullish trend so far in 2023, primarily driven by inflationary pressures and the avian influenza outbreak. The avian influenza pandemic severely disrupted the poultry industry, particularly impacting the United States (US) and the European Union (EU), leading to a substantial supply shortage. This situation initially caused price surges. However, chicken quotations declined in Jun-23 and Jul-23, prompting speculation of a sustained shift.

Nonetheless, a strong demand, notably in major regions like the US and South Asia, propelled prices to historic highs in Aug-23 and Sep-23. The average price of fresh whole chicken in the US reached a record USD 1.96 per pound (lb) in Aug-23, a 3.7% month-on-month (MoM) increase. US consumers, grappling with inflation, favored chicken over beef and pork. This dynamic interplay between production decisions and market pricing showcased the industry's adaptability to supply and demand shifts.

In South Asia, poultry prices recently rebounded as well, driven by the conclusion of Hindu religious periods, Shravan and Adhik Maas. The region also expected increases in soya prices, a key feed component. In India, farm gate chicken prices reached USD 0.66/lb in Sep-23, a significant 22% rise from Jul-23 and Aug-23, while retail prices grew to USD 1.42/lb, a remarkable 23.8% jump over the same period.

Tridge expects the US and South Asia to maintain bullish chicken prices due to continued consumer demand and favorable pricing dynamics in the meat market. US consumers will likely persist in choosing chicken over other meats amid a beef supply shortage, sustaining high prices. Similarly, South Asia's demand for chicken is anticipated to rise, driven by its affordability compared to other meats, especially during the upcoming festive season.

Rabobank anticipates a modest 1% year-on-year (YoY) growth in the global poultry market for 2023, with more favorable conditions expected in Q4-23 and early 2024. Slow consumption, driven by elevated prices due to rising costs, is projected to rebound as food expenses decline, particularly in chicken products. Rabobank predicts positive developments for key markets such as the US, Mexico, Japan, South Africa, Indonesia, and China, although challenges may persist in Indonesia and China.

The EU market remains stable but faces pressure from increased imports of chilled chicken. Brazil and Thailand need to manage surplus to stay afloat. Rabobank warns that government interventions, geopolitical factors, and avian influenza could continue to add volatility to the market. As a result, producers should prioritize cost efficiency and adaptability to changing demand and market conditions.

Lastly, the average export price for Brazil’s fresh chicken meat was USD 1,775.72 per metric ton (mt) in Sep-23. This export price represents a drop of 1.97% compared to the USD 1,811.47/mt in Aug-23 and a significant 14.2% decrease compared to the USD 2,069.51/mt in Sep-22. This marks the first time that the average export price has dipped below USD 1,800/mt since Mar-22. Chicken prices were steadily rising then and reached a historic high of USD 2,223.03/mt in Jul-22 after recovering from the COVID-19 pandemic lows in 2020. However, Brazil’s chicken export prices have fallen sharply by more than 20% over the past year from their peak in Jul-22. Experts anticipate Brazilian chicken export prices to continue declining, potentially dropping below the 10-year average of USD 1,694.90/mt.

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