Transitioning into 2022 in the poultry industry
[00:00] So welcome everyone. This is MTech AGcelerate. My name is Nikolai Shchetikhin. And I have Jim Johnston with me. How you doing? Jim? Nick? I’m doing good man. Are you? Yeah, doing really well, really? Well, you know, it’s the end of the year. So that’s why, you know, we’re doing something interesting something special today. So, we’re going live on LinkedIn. And we’re trying to stay closer to our audience. So everybody who joined us today on this live session, thank you very much. Thumbs up. And let’s see, let’s see what we can get going. Yeah.
[00:36] Yeah, absolutely. What sort of stats are we got on our AGcelerate podcasts over the last 12 months? Nick, remind me.
[00:50] You know, we are getting to more exotic places to record our episodes of AGcelerate, and now we are in Abu Dhabi.
[00:45] Yeah, so I looked at the stats, and we have released 15 episodes, starting late January this year, with the season two, and we had six guests on all those episodes. So it was pretty, pretty busy. So we really appreciate those guests. Thank you very much for joining us on our AGcelerate episodes. You know, guests are always making the episode is more alive and better and more informative. That’s what it’s important.
[01:20] Yeah, thanks to the guests. We like talking to people about chickens always so that was good. Thank you all very much. And it’s been a busy year, I guess, you know, the first half of the year maybe wasn’t as busy as we would have liked, thanks to the COVID pandemic, which kind of shut us down a bit over the first half of the year. But really, from July, we’ve been out there and visited quite a number of countries between us.
[01:46] Yeah, it’s been, it’s been quite a good half of the year we’ve been on the road been visiting plenty of places we went to Germany, Sweden, Denmark, UAE, Netherlands, France, Egypt, so quite a wide geography. And we met quite a lot of different people starting from farmers to integrators to our business partners and customers. And we met them on different venues, right. So, it’s not necessarily just direct visit, but we also started visiting shows this year. And it was also pretty nice experience.
[02:25] Yeah, I really enjoyed that. And so the second half, from my point of view, meeting more people, but also because the first time that I’ve ever attended SPACE, in France, in Wren, which was a really good experience. In fact, that was where we first recorded was our first episode outside the studio. So that was good, fun. We met lots of nice people very interesting show and then we went on more recently to visit Middle Eastern and Africa, which was a really, really good event, I thought it went really well. well attended. Considering the COVID situation. We’re still live and active. But these were two really good shows.
[03:10] Yeah, I agree. And they were quite different, right. So the format is always more or less the same there: exhibitors, the visitors, and everybody’s just walking around making connections and trying to do business. But the shows felt very different because there were different main topics, different main themes that are going around because, in SPACE, there was quite a lot of technology-driven solar panels, all of that. And in Viv Mia, what I noticed was more about breeding more about health, different types of vaccine equipment. So quite different. At least this is what I felt.
[03:57] Yeah, I think you’re right. You know, there was some really good stuff on renewable energy, how you use solar technology, new technology and spicing up. That was very, very evident in the walk around the exhibition. And yeah, I mean, the Middle East and Africa event was really cool, but I agree, different Ghana, different trades, different messaging going there. Lots of pharmaceutical businesses selling our wares. But lots of lots of smaller farmers interested in technology at viv mea as well, which was quite interesting. So they kept us on our toes for the full three days of that exhibition.
[04:35] Yeah, absolutely. Absolutely. It was a busy show. Definitely. Both of them were busy. I’m more surprised with SPACE being very busy because it was at this first half of the second half of the year if you know what I mean. So it was when the conditions about travel and COVID We’re still not very certain some countries we’re still trying to get out of quarantines and lockdowns. So, but the attendance was great. So, I mean, it’s a good sign that maybe you know, next year will be even easier.
[05:12] Fingers crossed. But there’s a kind of demand to get back to meeting people are thinking that’s what we saw at SPACE & viv mea as well, people want to get back out to meeting people face to face. But if you look at the year overall, I guess for the industry, it was a real challenging year, some big issues that were having to be wrestled with. Across the year, we had highs of soybean pricing and raw materials. Generally, we have maize or wheat, we’re strong pricing stronger than we’ve seen for quite for many, many years, we had energy prices that have just gone through the roof again. And more recently, as we’ve come into the northern hemisphere winter, it’s really impacting the industry. As we move into the worst of the winter weather in terms of prices for gas and fuel generally. And we, we looked at massive changes in product mix as a result of COVID, you know, shut down large parts of the restaurant and fast food service chains in the first half of the year. And a lot of that product was then diverted if you like through into retail outlets. So huge change in terms of product mix for poultry producers and processing plants to deal with. And I guess all of that’s been shaking out in the second half of the year and reorganizing itself. So that’s been quite a challenge for lots of people we’ve been speaking to over the last year. And the other the other key element here, certainly in the northern hemisphere is avian influenza, which has picked up really bad earlier than normal this year, this winter, kind of first kicking off in late October, early November in Europe. And we’ve seen record numbers of outbreaks in commercial flocks. I think a UK is sitting somewhere around 60 outbreaks in commercial poultry flocks since the late, of late October. And that is the largest episode that we’ve ever had, I think in this country so far on avian influenza, so quite an aggressive strain there. That’s creating all sorts of problems and headaches for the industry right now as we speak.
[07:39] Yeah, so overall, not very an easy year, you know, then I don’t I don’t really think that there are some easy days and times in poultry industry, because it’s always challenging to produce more, you know, to utilize the resources that you have. And like all of those additional things, just adding the complexity, adding the struggle. But like we discussed, I think today you said that where there are difficulties and issues, there are also a different opportunities and possibilities. And the market was still I wouldn’t say stable it was still going up and down. Throughout the year and many companies had to adjust their production. We saw cases of downsizing of poultry placement and again here in UK was a perfect example and all around the world. But some industries felt better, like egg industry was still doing quite well. And especially in many regions in North America. Egg market was growing. So it all differs, right? And especially with these things like with the like I mentioned the product mix that changed from foodservice to retail and then they will start switching back and we don’t know what is going to happen with it probably will never be the same as it was before. But there are plenty of trends that we saw this year. And one of them that was quite striking to me. And it’s not really poultry or industry related. Well it is related food industry related that many, many more people start doing deliveries before delivery was I would consider this to be like for rich people. Right? But now delivery like food groceries. Restaurant deliveries is something that is happening all the time. You see these guys are just going up and down the roads all the time delivering something and grocery deliveries just branching out into completely different area. So many companies popping up and all they do is just deliver food, deliver it fast, deliver it efficiently, so you don’t have to go to the shop. And it’s also affecting how customers are getting food on the table, and what kind of products they want for, for the table. And again, if this will be a continuing trend, many organizations that are producing food will have to readjust the supply chains. Because before COVID, everything was more or less balanced. It was working it was sometimes there were some disruptions, but it was working and everything was working out. But then COVID happened and everything had to switch quickly to the retail, because all the restaurants were closed, then the restaurant start opening up and everything says that to redo it again. But what happened? I don’t know what happened next. That’s, one of the things that I really noticed. And the other thing that I noticed, throughout the year, you see on the news that many companies that are posting big posts and you know, press releases about their carbon goals. Everybody is trying to be carbon, neutral or negative. And they have quite ambitious goals on that. And I think we discussed about this in one of our previous episodes. So what are the trends you saw this year?
[11:32] Well, I think I agree with you both the items you’ve mentioned are key. And the first one that you did talk about was the home delivery aspect because that gives producers an opportunity to deal directly with the customer directly with the end user or consumer of the product. And there have been a number of poultry businesses globally that have looked at internet sales directly to the consumer, which I think is really interesting, they tend to be maybe more niche producers, top end quality, organic, etc. But gives that opportunity again to build on that. The other things I guess in that same vein in terms of looking at the more premium products would be the ongoing free range and organic and these types of products that have continued to be there and, grow. In a place like the UK, they’re not a massive part of the poultry industry at the moment. But they’re there maybe four or 5% or so in terms of chicken meat, or the total poultry produced, but it’s growing slowly. And the other interesting thing this year has been the kind of flew over from the Netherlands, into France and other European countries, and now into the UK to an extent of this better chicken commitment. So where retailers and food service companies determine that they want birds to be grown less in terms of stocking density, they want the birds to be of a different genetic material, grow slower, and apparently more welfare friendly as a result. So that drive has come out of largely the Netherlands and retail in the Netherlands, and it’s pushing around to other European countries. And I think that that, you know we will continue to grow again in terms of these premium products. extent in the UK that it is in the Netherlands, where it’s 60% of the chicken through retail, but it’s certainly going to be something the industry needs to think about and cater for in most Western countries. And I did notice there was a bit last week publishing is a gap in terms of their standards. In the US we’re starting to think about the same thing too. So that’s something that’s really started to get some traction around the world this year. The other thing I noticed we spoke we did a bit of a discussion really on insect Protein A while back and, and one of the podcasts and of course in recent months that’s been formally adopted and approved by the EU to be fed to livestock, poultry or swine. So again, the all-insect protein alternative protein thing has been quite a running theme through this year. That is getting people looking at alternatives to soybean and shipping soybean from the Americas across here to Europe. So that will continue I’m sure. Yeah, yeah, yes. Anything else you spotting Nik?
[14:33] Well, I mean, I just wanted to add on this animal protein or insect protein into the fields because it started quite several years ago, but it was not getting major developed. And companies started building facilities. And using that protein mostly for, you know, producing food products, but it was not allowed to go into the animal feed. But now we’ll see how this will develop once this regulation is approved, and it can go, maybe there will be a boom of the animal protein production. But we’ll see. Also, one other thing, I noticed when we’ve been talking to multiple people that are just all over the world. And when we saw that, all of them requiring some kind of remote access to their facilities, especially that was quite obvious when the lockdown start happening. And people got stuck in some country that is quite far away from where they produce or where their offices were. And it was obvious that there is a need immediate need right now to get some kind of tools that will allow users and people and managers and accountants and farmers to get data on their mobile devices or on their computers, at home or in their home offices that are far away from the plants, farms, and facilities.