Rabobank's positive outlook, despite the bumpy road

How will the global poultry market develop in 2022?

Nan Dirk Mulder Presenting

According to Nan-Dirk Mulder, senior analyst animal protein at Rabobank, we're experiencing very challenging and interesting times, with much market change and volatility, more than ever before. Many disruptive factors in the poultry industry, just to mention Covid-19, feed prices, avian influenza, African swine fever, all have a big impact on the global business. How will the market develop in 2022? Once again, the poultry industry seems to be resilient to disruptions.

The global poultry market will begin to settle in 2022. But it won't be calm, as drivers of change – higher input costs, transition to more sustainable protein, biosecurity and Covid-19 – will remain.


The ongoing Covid-19 pandemic has a big impact on the poultry industry globally. In the first disruption stage, with high levels of Covid-19, restrictions and lockdowns, the production side suffered severely. Besides the channel shifting from food retail to foodservice, there were many issues with wet markets, trade difficulties and disruptions in the supply chain.
Nan-Dirk Mulder talks about the market effects of Covid-19 in the near future, "There's a road of recovery ahead. Economies are reopening via a bumpy road, with ups and downs in retail and foodservice, closures and openings, but going upwards in the end."

Costs and inflation

Feed prices largely influence the global prices for meat; they are the main cost driver for the poultry industry. The feed price development since Q3 2020 shows a steep increase. But cost price inflation is not just about feed, it's also about labor cost, energy prices, freight cost and logistical issues.
Such rising costs create pressure along the entire poultry supply chain. Will food price inflation compensate for rising production costs? It is hard to predict if most cost pressures will be materially alleviated in 2022. There will be important regional variations.

On the cost side, Nan-Dirk Mulder has some good advice for the poultry industry, "The rising costs of labor, freight, energy and feed will continue to challenge the animal protein supply chain. So you have to keep control of the cost side at the moment. If you have an efficient business model in your operations, in your farms, in your processing plants, it will pay off eventually. In times of high cost and inflation, the most efficient ones will always benefit more than others."

Rising costs and inflation are deterring consumers too, with a higher impact for foodservice than retail. Consumers are still uncomfortable with on-premises dining, resulting in commercial restaurant traffic remaining down. Therefore, the foodservice sector, although recovering, will keep facing several headwinds.

people dining restaurant chicken


Labor availability continues to be worrisome for the poultry industry everywhere around the globe, aggravated by tight Covid-19 requirements. Many poultry companies have difficulties finding labor, not only in western markets, but also in emerging markets. Due to travel restrictions of workers and immigrant laborers staying at home, labor is in short supply. In the UK, for example, the combination of Covid-19 and Brexit has led to a range of ongoing issues, including a shortage of delivery drivers and lack of staff in poultry processing plants.


Nan-Dirk Mulder continues, "Most regions are performing at breakeven levels or enjoy profitable conditions, with the reopening of economies in Europe and the Americas helping the market recover and boost global trade.
Performance-wise, especially the Americas, part of Middle East and Northern Africa, are doing relatively well. Covid-19 will continue to shake up markets and supply in places such as Europe and Southeast Asia in 2022, resulting in mixed performance. Overall, there will be some improvement, again within the context of all mentioned challenges in the business."


For the 2022 global outlook, we can be moderately optimistic with recovery and more reopening economies expected, albeit via a bumpy road.

Nan Dirk Mulder

Nan-Dirk Mulder
Senior analyst animal protein Rabobank

A positive outlook

In 2022, many drivers of change – higher input costs, transition to more sustainable protein, biosecurity, Avian Influenza and Covid-19 – will remain. Ongoing movements such as cost issues, labor shortage and supply chain disruptions will continue to impact the business in 2022.
In spite of these disruptive factors, there is room for optimism. An improvement is expected for the economic outlook, with ongoing strong demand. Nan-Dirk Mulder adds, "The combination of stronger demand and supply challenges will create an environment of stronger chicken prices. The restricted supply and high input costs will, in our view, lead to relatively high global chicken prices until well into 2022 in most regions."
So the global poultry protein market will begin to settle in 2022. The latest forecast of IMF shows a relatively fast rebound in the global economy. For 2021, 5.9% growth is expected and it's quite evenly divided around the globe. So better economic conditions can be expected, albeit via a bumpy road, with ups and downs.
"The good news is that the way is up. That also will support meat demand, after two years in a row with lower meat consumption. Already in 2021, meat demand and consumption will be back on track," concludes Nan-Dirk Mulder.

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