October 31, 2005

 

Philippine 2006 poultry output to fall 7 percent

 

 

Philippine poultry production will continue to decline next year as the threat of the dreaded avian flu virus and a general slowdown in the domestic economy could further damp consumer demand, an industry official said Friday.

 

Broiler chicken output this year is expected to total 470 million kilograms, about 7 percent lower from output in the previous year, Gregorio San Diego, president of the United Broilers Association of the Philippines said in an interview.

 

Poor demand as evidenced by low farm-gate prices has compelled most poultry raisers to reduce output this year, San Diego said.

 

This is bad news for feed producers and wholesalers who have already seen a decline in feed demand in Southeast Asia following the spread of the epidemic.

 

According to the USDA, the Philippines consumes around 5.30 million tonnes of corn and 2.75 million tonnes of wheat annually and most of it goes into feed production since milled rice is a staple food of the country.

 

USDA estimates also show that the Philippine feed industry will consume around 300,000 tonnes of copra meal and 1.4 million tonnes of soymeal in 2005.

 

San Diego estimates poultry production next year will likely fall by another 7 percent from this year's output estimate.

 

Farm-gate prices this year have fallen to as low as 43 pesos a kilogram, live weight, from around 68 peso/kg at the start of last year. Such low prices are way below prevailing production cost of 54-56 peso/kg, he noted.

 

As late as two weeks ago, farm-gate prices were hovering around 46 peso/kg, an indication that even the approaching Christmas and New Year holidays season isn't likely to dramatically perk up demand, San Diego said.

 

Traditionally, prices of meat products soar to their highest level in the last quarter of the year on burgeoning demand for the Yuletide break.

 

Producers are sure to substantially reduce output next year if farm-gate prices do not improve to a level that would allow producers to recover their losses, he said.

 

He added that producers have already reduced output for 2005 to arrest a declining trend in farm-gate prices that began last year.

 

Poor demand in 2006 to further reduce output Sluggish demand, however, is likely to persist next year because of an expected slowdown in the Philippine economy, San Diego said.

 

According to him, the introduction of an expanded value added tax, or EVAT, from Nov 1, covering more products and services could further put pressure on an already weak purchasing power of consumers.

 

"Producers are taking it easy. We want to be cautious on our production plans or we could lose more money," he said.

 

He said the threat of dreaded highly pathogenic avian influenza, or HPAI, could spell enormous trouble for the industry.

 

"We know that once we get infected locally, then it will really hit us hard. So, producers are being conservative," he said.

 

The Philippines has managed to remain free of the dreaded HPAI, which has killed more than 60 people in Asia since late 2003 and has recently infected parts of Europe.

 

To bar the entry of the dreaded disease, the Philippine Department of Agriculture this week adopted new measures such as blocking the country's duck population from entering swampy areas frequented by migratory birds.

 

Implementation of this measure, according to Bureau of Animal Industry Director Davinio Catbagan, started this month and will be applied up to March next year.

 

Migratory birds that cruise along the East Asia-Australia flyway are most visible in the Philippines between October to February, Catbagan said, adding that ducks are most susceptible to an infection coming from migratory birds since ducks prefer marshy areas. Chicken farms, on the other hand, are usually situated in dryland areas, he said.

 

Among other bio-security measures, the department has also imposed a ban on all poultry and poultry products, including pet birds, coming from avian-infected countries.