W41: Chicken Update

In W41 in the chicken landscape, in September, the Food and Agriculture Organization (FAO) Meat Price Index faced its third consecutive monthly drop and fell 1% compared to August. This decrease was primarily driven by high chicken meat supply in Brazil. The chicken meat index fell 2.5% month-on-month to values that had not been recorded since Apr-22. The chicken index is down nearly 11.5% year-on-year (YoY) compared to Sep-22. Pork also contributed to the overall meat price index decrease, declining by 2.63% month-on-month (MoM) while beef countered the decreases with a 1.3% monthly gain.

According to information from the Federal Government's Foreign Trade Secretariat (Secex), released on Monday 9, Brazilian chicken meat exports so far in October totaled USD 181.37 million, 24.16% of the total collected in the entire month of October 2022, which was USD 750.67 million. The average daily revenue until October 9 was USD 36.27 million, 8.2% lower than that recorded in October 2022. Chicken export revenue increased 9.44% week-on-week (WoW).The export volume during the same period totaled 102.1 thousand metric tons (mt), 28.14% of the total registered in October last year which was 362,76 thousand mt. The tons per daily average until October 9 was 20.42 thousand mt, an increase of 6.9% compared to the same month in 2022. The export volume increased 9.38% WoW.

According to the Brazilian Animal Protein Association (ABPA), Brazilian chicken meat exports totaled 3.905 million metric tons (mmt) between Jan-23 and Sep-23, a 6.5% (YoY) increase compared to the 3.666 mmt achieved in the same period in 2022. Revenue increased by 2.8% to USD 7.578 billion in the first nine months of 2023, against USD 7.373 billion in the same period of 2022. In Sep-23 export shipments of chicken meat reached 397.1 thousand mt, 0.7% lower than the 400 thousand mt shipped in Sep-22. Total revenue recorded in Sep-23 reached USD 719.3 million, 13.3% lower than the USD 830.1 million achieved in Sep-22.

Europeans will continue to eat less meat. Overall, per capita meat consumption in the European Union (EU) is expected to decrease by 1.5% in 2023 due to price inflation and lower supply on the market. The decrease is most pronounced in the consumption of beef (-3.5%) and pork (-5.2%), while the consumption of poultry meat will grow by 4.3% according to European Commission estimates. Despite bird flu outbreaks in 2023, EU poultry production continues its rapid recovery. In the first half of 2023, slaughter in the EU increased by 3.1%. This is mainly due to increases in Italy (+15% or 87 thousand mt) and Spain (+5.5% or 45 thousand mt). EU poultry production is estimated to increase 3.3% in 2023 taking into account reduced feed and energy costs and improved margins.

Lastly, poultry prices in South Africa are rising due to the rapid spread of Avian Influenza, which led to the culling of over 5 million chickens. In W40, fresh poultry closed at USD 1.93 per kilogram (kg), representing a 6.31% week-on-week (WoW) increase compared to the W39's closing price of USD 1.82/kg. Further price increases are anticipated in the coming weeks.