2022 was a year marked by uncertainty and difficulties for the poultry sector in Catalonia. Catalan companies producing poultry and eggs had to face a large number of externalities such as the volatility of energy prices and the general increase in production costs, which was very important in prices of animal feed due to the shortage of grain and other raw materials for the production of feed, resulting from the war in Ukraine. Added to this situation was the difficulty of transferring the increases in costs to the next links in the supply chain, which was also influenced by the social pressure on the rise in prices due to the widespread inflation that has been experienced in recent months.
The rise in feed prices is particularly relevant for poultry companies, as bird feed accounts for approximately 70% of production costs. Specifically, broiler feed prices increased an average of 31.2% in 2022 from 2021 and accumulated an average increase of 61.5% over two years. Feed for laying hens became more expensive by 27.3% compared to 2021 and also by 60.6% on average compared to 2020.
In this context, the efforts of companies in the sector during the last year have focused on cost control, readjustment of production to adapt it to demand and negotiation of sales prices, in order to maintain the activity
In the meat poultry sector, companies that maintain contracts with distribution according to which they supply the product at fixed prices, have suffered many difficulties when transferring the sharp increase in production costs to selling prices. The review of the terms of these contracts has required very long negotiations and new agreements have taken time to reach, which is why the companies were able to save the year mainly thanks to internal control of costs and also of production volumes.
It has also been a difficult year for the egg sector, since despite the increase in sales prices it has not sufficiently covered the costs of feed, energy and packaging prices, among others. On the other hand, this activity has been affected worldwide by factors such as the high incidence of highly pathogenic avian influenza, which has led to a decrease in the global supply; due to the closure of farms that have not been able to cope with the increase in costs and due to the progressive migration that egg producers are making on a global scale towards alternative production systems to cage rearing, which necessarily lead to a decrease in the census of laying hens. Together, these factors have generated an imbalance between demand and supply in the world egg market, which has also been felt in the Catalan market.
High temperatures
Last summer’s abnormally high temperatures, which persisted for many weeks, influenced growth and production levels on farms, which decline during periods of high temperatures. In the case of poultry fattening, this factor contributed in part to regulating production, while in the egg sector it was one of the causes of the reduction in supply and the decompensation with respect to demand .