Challenging Times for the Poultry Value Chain?

The global poultry industry is facing a convergence of challenges and opportunities in 2024. While the poultry market is expected to grow from $361.89 billion in 2024 to $386.76 billion by 2029, the growth rate has slowed to a modest CAGR of 1.34%. This represents a significant shift from the faster growth seen in previous years, as rising costs, supply chain disruptions, and changing consumer preferences reshape the value chain. 

With frozen poultry remaining the largest segment by form, holding 48.05% of the market share, and Asia-Pacific dominating as the largest region with 46.83% of the value share in 2023, the industry must innovate and adapt to a fast-changing global landscape. Moreover, rising poultry consumption in emerging markets such as Africa and the continued dominance of market leaders like Tyson Foods, which holds 6.29% of the global market, highlight the mixed outlook for the sector. 

2024: A Year of Cost Challenges 

One of the most pressing issues for the poultry industry in 2024 is the surge in feed prices, which has had a profound impact on production costs. Corn and soybean prices, key components of poultry feed, remain high, exerting significant pressure on poultry producers worldwide. As a result, poultry prices have increased by 11.31% from 2017 to 2022, and this upward trend continues into 2024. 

For instance, in Brazil, a leading poultry producer and exporter, the wholesale price for frozen chicken reached $2.12 per kilogram in 2023, more than double its 10-year average. This reflects the broader global trend, where feed price inflation, coupled with rising energy costs, has raised production expenses across the board. 

At the same time, the poultry industry is grappling with disruptions caused by diseases like highly pathogenic avian influenza (HPAI). Europe has faced significant outbreaks, leading to restricted production and higher costs. The European Union, which has been working towards sustainable animal farming practices, is particularly impacted, with production growth slowed by energy costs, regulatory pressures, and disease control measures. 

Supply Chain Disruptions and Labor Challenges 

The poultry value chain is also facing logistical and labor-related challenges in 2024. Tyson Foods, one of the largest global players, has responded to these challenges by expanding its global footprint, with new production facilities announced in China and Thailand in November 2023. This expansion will add over 100,000 tonnes of fully cooked poultry capacity, along with 1,700 new jobs, underscoring the need for strategic growth in key markets. 

In addition to labor shortages, transportation bottlenecks have also impacted the industry. As poultry is a perishable product, efficient distribution is critical to maintaining product quality and reducing waste. Rising costs of shipping and logistical inefficiencies, especially for international trade, have added to the cost burdens for producers and distributors alike. 

Changing Consumer Preferences: Frozen and Processed Poultry on the Rise 

Consumer behavior in 2024 shows a strong preference for frozen and processed poultry. Frozen products, which accounted for 48.05% of market share in 2023, are particularly popular due to their extended shelf life and convenience. The demand for frozen chicken wings, nuggets, and other easy-to-prepare products is rising, particularly in urban centers where consumers are seeking affordable, convenient, and nutritious meal options. 

Processed poultry is another growth driver, expected to expand at a CAGR of 2.04% from 2024 to 2029. As consumers prioritize convenience and health, demand for processed options like pre-seasoned chicken and ready-to-cook meals continues to grow. This trend is fueled by a shift toward more home-cooked meals and a rising interest in protein-rich diets, especially in markets like the United States and Europe. 

Regional Market Dynamics: Asia-Pacific and Africa Lead the Way 

Asia-Pacific, which held 46.83% of the global poultry market in 2023, continues to lead the way in terms of consumption and production. Countries like China are ramping up the production of white-feathered chickens, preferred for their leaner meat, to meet growing domestic demand. In this region, poultry remains an affordable source of protein, and urbanization is further driving consumption. 

Africa is expected to be the fastest-growing region for poultry consumption, with a projected CAGR of 3.15% from 2024 to 2029. Government initiatives, like Ghana’s $541 million investment into its poultry industry, highlight the region’s efforts to reduce import reliance and boost local production. As urban populations grow and incomes rise, poultry is becoming more accessible, and the quick-service restaurant sector is expanding, further boosting demand. 

The Future of the Poultry Industry: 2025 and Beyond 

Looking ahead to 2025, the poultry industry is poised for significant transformation. While the short-term outlook remains challenging due to cost pressures and supply chain vulnerabilities, the industry is actively embracing innovations that promise to reshape its future. 

• Sustainability and Consumer Demands: By 2025, sustainability will have become a central concern for both consumers and producers. The rise of eco-conscious consumers is already prompting companies to invest in more sustainable farming and production practices. Expect to see an increase in regenerative farming techniques, biosecurity improvements, and alternative feed sources to reduce reliance on traditional feedstocks like corn and soybeans. Companies that can reduce their carbon footprints and adopt circular economy principles will be better positioned to succeed in the long term. 

• Technological Innovations: Automation, AI-driven supply chain management, and precision agriculture are set to redefine poultry production by 2025. Tyson Foods and other market leaders are already experimenting with cyber-physical systems that enhance processing efficiency and material yield. The integration of real-time data and predictive analytics will optimize production, lower operational costs, and improve food safety standards. With labor shortages continuing to challenge the industry, robotics and automation will play a larger role in farming and processing facilities.  

• Market Expansion: In 2025, expect to see continued market expansion, particularly in emerging economies. Africa, with its rapidly growing urban population, is likely to become a critical growth market for poultry, driven by both domestic production and imports. Meanwhile, Latin America, particularly Brazil, will continue to be a major exporter, capitalizing on both regional demand and growing global trade opportunities. 

• Alternative Proteins: While poultry will remain a key protein source, the rise of plant-based and lab-grown alternatives will gain momentum by 2025. These innovations, while still in early stages, are expected to grow alongside traditional poultry, providing consumers with more options and potentially reshaping market dynamics. Companies investing in both conventional poultry and alternative proteins will be better equipped to navigate changing consumer preferences. 

• Geopolitical and Trade Shifts: Global trade dynamics will continue to influence the poultry market in 2025. Post-Brexit trade arrangements, the recovery of foodservice industries post-pandemic, and trade relations between major poultry exporters like Brazil and importing countries in the Middle East and Europe will shape the competitive landscape. Companies that can navigate these geopolitical shifts will be better positioned to capture new market opportunities.   

A Pivotal Moment for the Poultry Value Chain 

The poultry industry in 2024 is at a critical inflection point, facing unprecedented pressures from rising costs, labor shortages, and evolving consumer demands. However, it is precisely these challenges that offer the greatest opportunities for transformation. Companies that can innovate—whether through sustainable practices, technology integration, or market diversification—will not only survive but thrive. 

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