COMMODITIES 2025: Global poultry markets shift as US prices climb, Brazilian production grows

This is part of the COMMODITIES 2025 series where our reporters bring to you key themes that will drive commodities markets in 2025.

US chicken prices are projected to climb in 2025 due to production challenges and bird flu pressures, while Brazil expects modest production growth. In North Asia, Japan's chicken market faces risks from bird flu, and the Middle East anticipates an increase in chicken consumption, reflecting strong regional demand.

US chicken prices and production challenges

According to sources, the US chicken industry in 2025 is expected to be bullish amid production challenges stemming from bird flu and potential impacts from the incoming Trump administration on the agricultural labor supply.

Poultry companies, including Pilgrim's Pride, Sanderson Farms and Tyson Foods, have scaled back hatchery operations due to bird flu and high feed costs. Similarly, the US US Department of Agriculture predicts broiler production to slow to 1.6% in 2025, down from 1.7% in 2024.

High mortality rates in hatching layers and broilers are worsening production issues and creating placement gaps, said Fabio Sandri, CEO of Pilgrim's Pride, during the Q3 2024 Pilgrim's Pride earnings call on Oct. 31.

As of Dec. 10, 117 bird flu outbreaks affected over 40 million birds, raising supply concerns, particularly in Oklahoma and Arkansas. The USDA projects 2025 broiler exports to reach 6.8 billion pounds, showing a marginal growth of 0.8% year over year.

Additionally, various agricultural groups are concerned about the high percentage of undocumented farmworkers, estimated at 50%-70%. They indicate that mass deportation initiatives, such as Trump's Project 2025, could create significant challenges for farmers in securing temporary labor for their operations.

Platts USCM, the benchmark price for US chicken leg quarters FCA Savannah, was assessed at an average of $1,175/mt in the first half of December, and sources expect a 5% increase during the first half of 2025, related to seasonal trends and the difficulties mentioned above.

Production and consumption in Brazil

The Brazilian Association of Animal Protein (ABPA) released forecasts for chicken production and trade in 2025. Production was expected to grow by 1.1% in 2024, reaching 15 million mt. Domestic per capita consumption is projected to increase by 1.1%, amounting to 45.6 kg/person.

This rise in consumption is attributed to higher beef prices, which have shifted demand toward more affordable options, such as chicken and eggs. For 2025, ABPA forecasts a further 2.7% increase in chicken production, with domestic consumption rising to 46.6 kg/capita, a 2.2% increase from 2024.

Export outlook and market challenges

According to ABPA, exports from Brazil are expected to slow from 3.1% in 2024 to just 1.9% in 2025. Industry participants express concerns about production expansion due to a global shortage of genetic resources, such as fertile eggs and day-old chicks, stemming from a reduced population of grandmother flocks.

Brazilian chicken demand is rising, fueled by the absence of bird flu outbreaks in the country, despite a case of Newcastle disease reported in August 2024. The depreciation of the Brazilian real against the US dollar further enhances export attractiveness. Notably, traditional importers are expected to increase their imports of Brazilian chicken in 2025 -- Mexico by 2%, Saudi Arabia by 2.5% and the UAE by 3.9%, according to USDA.

Headwinds in the CFR North Asia market

According to market sources, Japanese chicken meat production and consumption are projected to increase slightly or remain stable in 2025, but increasing bird flu cases may impact production volumes and consumption patterns.

According to an S&P Global Commodity Insights analyst, production is expected to rise by 1.9% from 2024, supported by a strong bird inventory and slaughter rate. Consumption is forecasted to increase by 2.3%, driven by anticipated GDP growth of 1.2% in 2025.

Japanese chicken imports in 2025 are expected to remain flat due to production growth and high ending stock inventories, reducing the need for additional imports, the analyst said.

Recent elevated inventory levels have pressured prices, prompting efforts to reduce stocks by March 2025, Japanese sources said.

Platts assessed that CFR North Asia chicken leg prices have declined since July, falling from $2,150/mt to $1,850/mt in December, reflecting a 14% drop to date, according to data from Commodity Insights.

Market monitors HPAI outbreaks

As of Dec. 16, Japan has reported 13 bird flu cases, which, according to the Ministry of Agriculture, Forestry and Fisheries, resulted in the culling of over 1.25 million birds, including 200,000 broilers. This marks an 80% decrease in broiler culls from 2022-23.

However, a source said rising domestic chicken prices due to increasing bird flu cases may lead consumers to opt for cheaper imported chicken.

In South Korea, imported chicken consumption is expected to grow next year due to increased exports of cooked Korean chicken products and local producers' need to utilize broiler meat for exports, a source said.

Similarly, the USDA's 2024-25 outlook predicts an 8% year-over-year increase in South Korea's chicken exports for 2025, driven by rising domestic production and expanded markets, while imports are projected to grow by 2% due to increasing domestic demand and lower production costs for processed chicken products.

Rising chicken consumption and market dynamics in the Middle East

According to the USDA, chicken consumption in the Middle East is forecast to rise by 4.6% in 2025, exceeding 5.8 million mt. Key drivers include Qatar (6.8%), the UAE (5.6%), and Saudi Arabia (2.2%) growth over 2024 levels, showing robust demand across the Persian Gulf region.

The UAE continues to play a pivotal role as an importer and re-exporter to Gulf markets. However, while 2023 saw quarterly volume increases, early 2024 experienced higher imports of frozen chicken cuts, followed by reduced volumes for the remainder of the year. Sources attribute this shift to elevated inventories and a slower-than-expected summer recovery.

Platts assessed prices for Brazilian chicken breast remained stable at $3,000/mt by year-end, indicating market caution. Sources said demand is likely to strengthen, driven by increased consumption as Ramadan approaches in late February 2025.

Saudi Arabia's self-sufficiency goals and global trade context

Saudi Arabia aims for 80% poultry self-sufficiency by 2025, backed by $4.5 billion in investments. By May 2024, it achieved 70% self-sufficiency, with February production hitting a record 100 million kg. These milestones underscore steady progress toward food security goals, potentially altering import dynamics and impacting regional suppliers.

Additionally, the renewal of Ukraine's duty-free poultry quota into the EU for the first half of 2025 is significant. The EU Directorate-General of Trade stated that from Jan. 1 to June 5, Ukraine can export poultry tariff-free under the Autonomous Trade Measures Regulation, but an emergency limit will be enforced if imports exceed 57,100 mt during this period.

This quota, which accounts for 42% of the previous half-year allocation, may drive traders to seek price-competitive markets like the Middle East once exhausted, intensifying regional competition.

In summary, the poultry market in 2025 will experience rising US prices, growing Brazilian exports, and increased consumption in the Middle East, reflecting complex global dynamics.