March 18, 2015

 

Global poultry sector: 'Upbeat despite bird flu'

 

 

Pressure on the poultry industry from avian influenza is further spreading across the globe, as new outbreaks were reported in Asia, Europe and North America, the latest Rabobank report said.

 

The first quarterly report of the agricultural lender looked at the impact of avian influenza, or bird flu, outbreaks across the global poultry industry.

 

"Avian flu is further spreading across the globe and could affect global trade streams, especially as the virus has moved further in Europe to Hungary, and in the US to central states like Minnesota, Missouri and Arkansas", said Rabobank animal protein analyst Nan-Dirk Mulder.

 

"Joint global approaches, optimal biosecurity, and strong monitoring and compensation systems are necessary to stop the spread of the disease", he added.

 

Despite the pressure from the bird flu outbreaks on global trade, the report said the margin outlook for the global poultry industry remains upbeat due to continuing bullish drivers like high beef prices, lower feed costs and relatively strong demand in most regions.

 

But the exchange rate volatility and turmoil in some regions including the Middle East and Eastern Europe are leading to lower trade volumes, prices and shifts in trade streams, Rabobank said.

 

Following are summaries of the report in selected countries:

 

US

Poultry sector has favourable outlook, but some uncertainties remain. Margins are expected to remain high in 2015. The biggest unknown in 2015 is industry expansion.

 

Brazil

Market had bullish start in 2015 despite export challenges. The lower oil price will hit the Middle East demand. Still, exports are expected to be strong in 2015, mostly driven by Asia. Margins will be supported by reduction of feed costs as well.

 

Europe

The industry shows some recovery. Although supply is currently tight, the outlook is threatened by ongoing avian flu concerns and still closed export markets.

 

China

There's oversupply due to avian flu and food safety issues. As a consequence of human avian flu cases reported, live bird markets were shut down. During the seasonal peak month, poultry retail prices remained flat.

 

Russia

Market remains very bullish on low supply. The outlook remains strong, with expected ongoing tight market conditions due to expensive, limited imported volumes and restrictions on growth.

 

Other regions

Mexico has ongoing bird flu issues, and lower pork prices will soften poultry meat consumption growth.

 

Japan's poultry industry remains bullish despite ongoing bird flu outbreaks. 

 

In Thailand, exporters are supported by a strong Thai baht.