15.12.2017

The outlook for the global poultry industry for 2018 is promising. This promising outlook includes ongoing demand growth in most markets, except China, and lower feed prices in the first half of 2018, if not longer.
The main concerns for 2018 are avian influenza returning during the Northern Hemisphere winter and increasingly competitive market conditions due to a growing red meat supply (pork and beef).
Global prices for chicken have remained strong, especially for whole chicken and breast meat, but dark meat prices have fallen. Competition from red meat will grow next year amid rising supplies and softening prices, the report noted.
According to the report, China’s industry is struggling, with winter rapidly approaching and many wet markets yet to be closed. This situation could negatively affect prices and global trade. The industry needs to further reduce supply in order to rebalance supply and demand.
In Brazil, Rabobank said the industry is recovering from the "Operation Weak Flesh" meat scandal, and exports have returned to 2016 levels after significant drops in the second and third quarters. However, the risk remains that Brazil's imports will be substituted by new suppliers.
The European Union's poultry industry, on the hand, is performing relatively well, which the report said is based on a favorable supply/demand balance in the European market (given restricted production growth in the aftermath of avian influenza earlier in 2017), along with constrained growth in northwestern Europe due to environmental regulations that restrict expansion. Eastern Europe - especially Poland - will keep growing fast, becoming a major trade hub.
The fastest-growing global regions are currently Southeast Asia and Eastern Europe, according to the report.  Southeast Asia will remain very bullish next year, with ongoing growth of more than 5% in most countries like Indonesia, India, the Philippines and Thailand that's driven by strong local demand and Thailand’s clear leadership when it comes to global trade. However, the report pointed out that the recent industry expansion of 7% probably occurred a bit too fast, when taking into account the current margin pressure.
The U.S. poultry industry is expected to keep performing well, driven by ongoing strong local market conditions and improved exports. This, combined with predicted record-high U.S. corn and soybean harvests, will likely send feed prices lower.