September 20, 2012

Thailand's broiler industry is facing pressure from a sharp reduction in prices for products across the board as well as rising production costs due to escalating world prices for main feed ingredients like soymeal and corn.

Thailand's chicken meat production in 2012 is estimated to grow sharply by 15% to 1.55 million tonnes from 1.35 million tonnes.

Consequently, most of the Thai broiler processors are likely to scale down their broiler meat production in the last quarter of 2012 and most of 2013. This will likely reduce broiler meat production by 6% in 2013.

Skyrocketing prices for feed ingredients have severely affected production costs among broiler integrators in the second half of 2012. However, the impact of higher feed prices was offset sharply by reduced chick prices for the first half of 2012.

As a result, average live broiler production costs in the first seven months in 2012 mirrored those during the same period of 2011.

Integrated broiler processors are concerned that the drought in the US may further push feed prices higher for the remainder of 2012.

Domestic consumption of broiler meat continues to grow primarily because quick service restaurants (QSR) and ready-to-eat markets have expanded and chicken meat is less costly than other meats.

Thailand's broiler meat exports are estimated to grow 15% in 2012 and grow another 7% in 2013 mainly because the EU and several other countries lifted their bans on uncooked chicken meat imports from Thailand. A supply glut in 2012 forced Thai packers to reduce their export prices, especially in the EU market.