Poultry Price Forecasts

As one of the most consumed proteins worldwide, poultry plays a critical role in global food supply chains. Fluctuations in poultry prices can have far-reaching effects, influencing everything from production costs to consumer prices. Accurate poultry price forecasts are essential for industry participants—including buyers, sellers, and traders—who rely on precise data to make informed decisions, manage costs, and optimize their market strategies. In this article, we’ll explore the importance of poultry price forecasts, key factors that impact pricing, the accuracy of AI-driven forecasts, and the influence of seasonal and geopolitical events.

Why Are Poultry Price Forecasts Important?

Poultry price forecasts are critical for various market participants, including buyers, sellers, and traders. Given the global demand for poultry products, particularly chicken, accurate price forecasts help stakeholders make informed decisions, optimize procurement strategies, and manage risks.

Let’s consider the example of broiler chicken from Spain, as shown in the price forecast generated by Vesper’s AI-driven model below.

This forecast provides both historical prices and projected trends, giving market participants the ability to:

Buyers: Optimizing Procurement Strategies

For buyers, such as grocery stores or food manufacturers, poultry price forecasts are essential for planning purchasing decisions. If the forecast shows that broiler chicken prices are expected to rise, buyers can secure contracts or purchase larger quantities now, locking in lower prices before an increase.

For example, a restaurant chain may observe the upward trend in broiler chicken prices for Spain in 2024, as predicted by Vesper’s model. To avoid higher costs, the chain could decide to buy more chicken in advance or negotiate contracts at current prices, ensuring cost savings.

Sellers: Timing for Maximum Profit

For sellers, such as chicken producers or distributors, price forecasts help determine the best time to sell their inventory. If prices are forecasted to rise in the coming months, producers may choose to hold off on selling until they can secure higher prices.

For instance, a poultry producer in Spain might use the forecast to predict a future price increase for broiler chickens. By waiting for the price to peak, they could maximize their revenue.

Traders: Identifying Arbitrage Opportunities

For traders, accurate forecasts provide insights into price trends across different markets, helping them capitalize on arbitrage opportunities. Traders may buy broiler chickens at the current lower price and sell them later when prices increase, as predicted by the Vesper model.

What Are the Most Important Factors That Need to Be Considered in Poultry Price Forecasts?

Several key factors must be taken into account when generating accurate poultry price forecasts. These include:

• Feed Costs: Feed is the largest component of poultry production costs, especially for broiler chickens. Fluctuations in feed prices, particularly for grains like corn and soybeans, have a direct impact on poultry prices. If feed costs rise, production expenses increase, leading to higher poultry prices.
• Production Levels: The availability of broiler chickens and other poultry products is a critical factor. Production levels can be affected by factors such as farm management practices, breeding cycles, and disease outbreaks. A surplus in production may lower prices, while a supply shortage can lead to price spikes.
• Weather Conditions: Weather can have an indirect but significant effect on poultry prices. Adverse weather conditions, such as droughts, may reduce feed availability, driving up feed costs. Extreme temperatures can also impact the health and productivity of poultry, reducing supply and raising prices.
• Global Demand: Changes in consumer demand, particularly for poultry, can significantly affect prices. As poultry is seen as a healthier and more affordable protein option compared to red meat, demand surges can put upward pressure on prices, especially in emerging markets.
• Geopolitical Events and Trade Policies: Government regulations, tariffs, and trade policies play a significant role in poultry prices. Any disruption in the global poultry trade due to sanctions, tariffs, or import/export restrictions can lead to supply chain bottlenecks, impacting prices in both producing and consuming countries.

How Accurate Are Poultry Price Forecasts?

The accuracy of poultry price forecasts, such as those for broiler chickens, depends on various factors, including the quality of data and the forecasting model used. Traditional price forecasts often rely on fundamental indicators such as feed costs, production levels, and global demand. While these methods provide valuable insights, they may not fully capture the complexity of global poultry markets.

Vesper’s AI-driven models, however, provide a more sophisticated approach to forecasting. These models analyze vast datasets, including historical prices, market conditions, and external factors, to deliver highly accurate predictions. In the figure below, we can see the accuracy rates of various chicken price forecasts: chicken ddwt (breast) shows an impressive accuracy rate of 99%, while chicken ddwt (broiler) also exhibits a strong accuracy rate of 98%. This highlights the reliability of Vesper’s forecasting models for the poultry market, providing valuable insights for market participants to make well-informed decisions based on these highly accurate predictions.

Despite the overall high accuracy, forecasting results can still vary. Continue reading to learn more about the factors that contribute to these variations in accuracy.

AI-Driven Forecasts and Variability in Accuracy

Despite the high accuracy of Vesper’s models, some variability may still occur due to several factors:

• Unforeseen Events: Unexpected events such as disease outbreaks (e.g., avian flu) or natural disasters can disrupt poultry supply chains, leading to price fluctuations that were not anticipated in the forecast.
• Feed Price Volatility: Sudden increases in the price of feed ingredients, such as corn or soy, may cause poultry prices to rise more quickly than forecasted. Similarly, a decrease in feed prices could lower poultry prices beyond the predicted range.
• Geopolitical Factors: Trade restrictions or tariffs can influence poultry prices by altering global supply and demand dynamics. For example, a new tariff on poultry exports from Spain could reduce international demand, driving prices down unexpectedly.

Vesper’s AI models are continuously updated with real-time data, allowing them to adjust to these changes and provide users with reliable forecasts. By leveraging advanced machine learning, Vesper’s forecasts offer market participants the accuracy needed to make informed decisions.

How Do Seasonal Fluctuations Impact Poultry Price Forecasts?

Seasonal fluctuations can have a noticeable impact on poultry prices, particularly in the broiler chicken market. These fluctuations are primarily driven by changes in demand and production cycles throughout the year:

• Increased Demand During Holidays and Festive Seasons: Demand for poultry products often spikes during holiday seasons or special occasions, such as Christmas, Easter, or summer barbecue season. During these periods, consumers tend to buy more chicken, leading to temporary price increases.
• Production Cycles: Broiler chickens are raised in short cycles, and production levels can vary depending on the time of year. While chicken is available year-round, colder weather conditions can sometimes reduce productivity on farms, leading to a seasonal decrease in supply and higher prices.
• Feed Availability: Since poultry feed is primarily composed of grains like corn and soybeans, any seasonal disruptions in grain production (e.g., due to drought or poor weather during planting or harvest) can impact feed costs, which, in turn, affects poultry prices.

Where Can I Find Poultry Price Forecasts?

In addition to Vesper’s AI-driven platform, which provides highly accurate price forecasts for poultry products like broiler chickens, there are several other reliable sources where you can access poultry price forecasts:

• USDA (United States Department of Agriculture): The USDA provides extensive reports on poultry prices, production, and market trends. Their Livestock, Dairy, and Poultry Outlook reports offer valuable insights into global poultry markets, including forecasts for broiler chickens and other poultry products.
• FAO (Food and Agriculture Organization of the United Nations): FAO tracks global poultry market trends and publishes comprehensive reports that include price forecasts. Their Meat Market Review and Food Price Index offer valuable insights into poultry prices, production levels, and demand.
• World Bank Commodity Markets: The World Bank regularly publishes commodity market reports, including forecasts for poultry and other livestock products. These reports focus on global price trends, supply and demand dynamics, and geopolitical influences on markets.
• Reuters and Bloomberg: Both Reuters and Bloomberg provide news coverage and market analysis for poultry commodities, offering up-to-date information on poultry prices, industry trends, and forecasts based on current market conditions.

By combining these sources with Vesper’s AI-driven forecasts, market participants can gain a comprehensive view of poultry price trends, helping them make well-informed decisions regarding procurement, sales, and trading.