“Poultry industry fundamentals are facing meaningful headwinds with stronger than expected feed prices due to a strong US dollar, increased competition from falling pork prices and restrictions on trade,” said Nan-Dirk Mulder, Rabobank animal protein analyst. “Prices for whole chicken, leg quarters and chicken feet are declining further, while breast meat prices remain relatively strong.”
Rabobank analysts said they believe a global approach to dealing with avian flu is more important than ever. This includes developing strict biosecurity standards and adjusted industry business models to deal with the new market reality.
According to the report, the regional outlook for the poultry industry is as follows:
European Union: Slight margin recovery. Improved trade position due to weak euro and possible lifting of avian flu related trade restrictions.
US: Wave of HPAI outbreaks, but broiler sector less impacted. Margins still strong on robust local market demand.
Brazil: Competitive position in global trade. Weak real and avian flu bans for competitors.
Russia: Less bullish market, with ongoing higher feed costs and removal wheat export tax.
China: Fewer avian flu cases, but still big impact. Margins to lowest level in five years.
Thailand: Oversupply despite strong exports.
South Africa: Improved margins, but outlook more clouded on likely return of EU exporters.
The report can be accessed here.