April 15, 2020
Global poultry output forecast to rise in 2020
Due to a larger breeder flock, global poultry production is projected to increase in 2020 from some of the world's largest producers—the US and Brazil.
The increase in supply will put downward pressure in poultry prices and an increase in cold storage inventories. Poultry meat production has increased during the first three months of 2020. The increase in production has led to a decrease in poultry prices in the US and Brazil.
The US is projected to produce approximately 46 million pounds of broiler meat, a 4% increase compared to 2019's production, turkey production is also projected to increase to 5.92 million pounds as on-year poult placement increased, thus leading to an increase in the hatchery as well. Brazil's chicken meat production is projected to increase to 14.1 million tonnes. An increase of 3.2% compared to last year's production.
Broiler meat production in the US is projected to increase by 4% to 46 million pounds from 43.905 million pounds in 2019. Broiler production in Q1 of 2020 was approximately 11.250 million pounds, an increase of 6.6% compared to Q1 in 2019.
January broiler production was estimated at nearly four billion pounds, a 6.5% increase on-year. The increase in broiler production is mainly attributed to a rise in slaughter and heavier bird weights which increased by 3.9% and 2.6%, respectively and China lifting the ban on importing US poultry due to the ASF crisis.
In February, broiler layer flock had reached approximately 61 million birds, 3% higher compared to the same period in 2019. Wholesale broiler prices in March were approximately US$1.802 per pound, down from US$1.876 last month and down 12.90% compared to 2019 prices.
Brazil's poultry meat production is also projected to set a record in 2020, despite uncertainties revolving around the COVID-19 outbreak, according to recent data released by the USDA. Brazil's chicken meat production is projected to increase by 3.2% to 14.1 million tonnes compared to last year's production figure which was approximately 13.69 million tonnes.
The increase in projected production is mainly attributed to a couple of factors. First, steady demand for chicken meat from Asia due to the effects the ASF had on swineherd and the avian influenza that affected poultry output, thus Brazil had to step up poultry and pork production to cater to the rise in demand. Second, domestic demand from Brazil also led to an increase in projected production due to the increase in disposable income and the decrease in unemployment rates.
Other factors that have led to the projected increase include higher production capacity of day-old chicks as a result of increased investment from Brazilian packers and finally, stability in feed costs. Brazilian wholesale chicken prices have reduced to BRL4.14/kg, a decrease of 22% since the beginning of January where prices traded above BRL5/kg.
Brazil's chicken meat exports grew 59% in the first semester, despite the COVID-19 and its effects. According to the Brazilian Association of Animal Protein (ABPA), approximately 348,000 tonnes of chicken meats were shipped during February this year, an increase of 10% compared to the same shipments in 2019 which stood at approximately 316,000 tonnes. Both January and February shipments totalled 672,000 tonnes, a 12.3% increase compared to the same shipments in 2019, which were approximately 598,000 tonnes. Brazil also recorded an increase in revenue as a result of the increase in exports, where revenue totalled US$1.082 billion, a 10% increase compared to the revenue received for shipments during the same period in 2019.
Indicators point out that poultry farmers in the US will not reduce production beyond the first quarter. In January, more than 85 million pullets were placed for hatchery, a 14% increase on-year. US broiler production forecast for Q2 stands at approximately 11.525 million pounds, Q3 projections stand at approximately 11.8 million pounds, and Q4 projections stand at approximately 11.5 million pounds.
