Rabobank has published a new report on the global poultry industry, looking at the impact of avian influenza outbreaks across the sector.
In the report, the bank’s Food & Agribusiness Research team says that pressure from the avian influenza (AI), or bird flu, is further spreading across the globe, with new outbreaks in Asia, Europe and North America.
“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 U.S. to central states like Minnesota, Missouri and Arkansas,” says 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.”
Global Outlook
The margin outlook for the global poultry industry remains upbeat, with continuing bullish drivers like high beef prices, lower feed costs and relatively strong demand in most regions. The global trade is under pressure from the AI outbreaks. The exchange rate volatility and turmoil in regions such as the Middle East and Eastern Europe, are leading to lower trade volumes, prices and shifts in trade streams.
United States
The poultry sector in the U.S. has a favourable outlook, but some uncertainties remain. The margins are expected to remain high in 2015. The biggest unknown in 2015 is industry expansion.
Brazil
The Brazilian poultry market began 2015 bullish despite of the 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 EU poultry industry shows some recovery and although supply is currently tight, the outlook is threatened by ongoing avian flu concerns and still closed export markets.
China
Entering Q1 2015, China has an ongoing struggle of oversupply due to AI and food safety issues. As a consequence of human AI cases reported, live bird markets were shut down. During the seasonal peak month, poultry retail prices remained flat.
Russia
The Russian 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 AI issues and lower pork prices will soften poultry meat consumption growth.
Japan’s poultry industry is still bullish despite ongoing AI outbreaks. In Thailand, the export position is supported by a strong Thai baht.
Source:ROBOBANK