Dutch broilers take a step down in price

The tightness in the Dutch poultry meat market is easing somewhat. As a result, both the average slaughter prices and the prices on the Barneveld quotation have fallen. Slaughterhouses seem to be having less trouble meeting their need for broilers. However, there is still no sign of ample supply. In the Dutch poultry market, supply and demand are coming a little closer together again after a somewhat tighter phase. Sales of chicken remain reasonably steady, but have not proved strong enough to keep prices up. As a result, slaughterhouses no longer need to look as actively for additional flocks to fill gaps in their planning. In part, this is the result of the summer holiday period. We are currently in the phase in which all regions in both the Netherlands and Germany are on holiday. As a result, sales in this phase of the year shift to Southern Europe. This is reflected in the VCN quotation. The contract price is falling this week from €1.05 to €1.04 per kilo. This means that last week's increase is not fully holding. Before that, the quotation had stood at €1.03 per kilo for a long time since the end of May. On the free market, tightness is also easing somewhat. The Barneveld quotation is falling from €1.12 to €1.10 per kilo. The price had remained at the higher level for the previous two weeks. The decline indicates that there is less demand for freely available slaughter chickens. Over the past few weeks, extra chickens were purchased on the free market to make up for shortages in supply. That need now seems to be easing somewhat. Slaughterhouses are still actively looking for chickens, but no longer need to pay ever higher prices for them. The difference between the contract price and the free market remains visible, but is narrowing. At €1.10 per kilo, the Barneveld quotation is still 6 cents above the VCN quotation of €1.04 per kilo. Last week the difference was still 7 cents. Supply no longer ampleThe lower quotations do not mean that supply is very ample. Supply remains relatively limited, but is better aligned with current demand. The market is thus shifting from slightly tight to more balanced. A sharp decline is therefore not immediately likely. Domestic supply is still not ample enough for that. The fact that supply is no longer as tight is the result of strong imports. There is still ample supply of poultry meat on the European market. Cheaper meat from among others Poland and Ukraine means that Dutch slaughterhouses find it difficult to pass on higher purchasing prices for live chickens to their customers. As long as sufficient cheaper poultry meat is available, slaughterhouses have little incentive to pay more structurally for Dutch chickens. A situation in which slaughterhouses try to outbid each other with higher prices is therefore unlikely.