The egg and poultry market has seen structural changes in the past. The poultry market witnessed a growth in global production at a CAGR of 2.6% from 2012 to 2017 and the global consumption grew at a CAGR of 2.3%. In 2017, the global poultry market size and egg market were 90.45 MMT and 64.25 MMT respectively. During the same year, the consumption of poultry and egg market was 88.41 MMT and 62.12 MMT respectively. In 2018, the global production of poultry increased by 5 MMT to 95.5 MMT while the global egg production increased by over 10 MMT to 70.4 MMT. The global consumption of poultry and egg increased to 93.6 MMT and 62.12 MMT in 2018 respectively.
The key consuming country of poultry and egg is the US as the consumption of poultry is 17.7% and egg consumption is 9.2%. More than 90% of the households in the US consume eggs and most of the food providers have egg products in their menu. The key poultry importing country is China which imports 5.9%. The US is the key egg importing country as it imports 12.3%. The key producing countries are the US and China as the US produces 20.55% of poultry while China produces 39.2% of eggs. The key exporting countries are Brazil and the US. Brazil exports 38.55% of poultry and the US exports 5.4% of egg.
The main cost drivers of poultry prices depend on four factors. 60% of the cost comes from a feed, 20% of the cost comes from equipment and housing, 10% of the cost comes from operating costs such as labor, 5% of the cost comes from logistics, and the rest of the 5% comes from other costs such as taxes. The weather conditions determine the cost of the poultry too because the weight of the chicken is likely to change. Spring and summer is the time when the prices of poultry and eggs are higher because this is the period when fast-food sales are higher compared to other times of the year. In winter, the egg and chicken prices are lower.
According to the 2020 market intelligence report by Beroe, the egg market is expected to continue to grow at a CAGR of 2% taking into account both global production and consumption in 2020. Developing regions, mainly India and China, saw growth in egg production of more than 15% in the past decade. This growth is likely to continue pushing the production higher because the production cost is low in these regions. The poultry market analysis shows a similar growth expectation whereby the production and consumption will increase globally. Poultry consumption saw growth too and this trend is going to continue.
The reason why production can be easily boosted in this market is that the production cycle is quite short. Moreover, there is a lower risk involved while the profit margins are high. The global supply of poultry and egg market is high and will continue to be that way because of advancements. These include better feeding practices and better genetics among other factors. There is a higher supply of poultry than demand. Beroe’s experts predict that this imbalance in supply and demand for poultry is likely to continue into the future because production is easy and many suppliers are increasing capacities.
The egg production and consumption are likely to increase in developed and developing regions because of many reasons. As populations have increased and continue to increase, there is a higher demand for poultry and egg products. People, especially in developing countries, have higher disposable incomes which have led to an increase in consumption of eggs and poultry compared to previous years. Lower prices of eggs and poultry are the other reason why consumption has gone up. Since eggs provide nutrients such as protein, people prefer consuming these rather than other products which are on the more expensive side.
The poultry and egg market is not a complex market because there isn’t much variation in it. The market is a predictable market unless there are any outbreaks like the avian flu which affected the US poultry industry in the past. Trade wars can impact the global market. An example is the US-China trade war which took place during the last half of the year 2018. This affected the poultry sector and other meat sectors. The demand for the market of egg and poultry looks good as it is expected to increase. However, an increase in demand for cage-free poultry and egg will have an impact on the production and supply in the future.