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Poultry sector outlook uncertain heading into 2018

Uncertainty was increasing in the poultry industry but the outlook for 2018 remained promising, according to Rabobank’s quarterly poultry outlook report


Alex   Black

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Alex   Black
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Poultry sector outlook uncertain

Nan-Dirk Mulder, senior analyst for animal protein at Rabobank, highlighted increasing demand in most markets, barring China, and lower feed prices expected in the first half of the year.

 

“But a disciplined supply growth strategy will be needed, especially as uncertainties are rising,” he warned.


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Global prices for chicken have remained strong, especially for whole chicken and breast meat, but dark meat prices had fallen. However, he warned competition from red meat would grow next year, amid rising supply and softening prices.

 

A return of avian influenza to the Northern Hemisphere was also a key concern, alongside exchange rate volatility and changes in traders’ procurement strategies in response to scandals.

 

While Brazilian exports have now recovered from the ‘weak flesh’ scandal, there was still a risk of Brazilian imports being substituted.

 

Europe

 

In the EU, the poultry industry was performing ‘relatively well’ due to a favourable supply and demand balance after avian influenza and environmental regulations had held back supply, despite rapid growth in eastern Europe.

 

The US poultry industry was expected to keep performing well, driven by ongoing strong local market conditions and improved exports, combined with a predicted record high US corn and soyabean harvest which would likely push feed prices down.

 

Southeast Asia was expected to ‘remain bullish’ next year, driven by strong local demand and Thailand’s leading role in global poultry trade.

 

However, supply was outstripping demand in China, which could have a negative impact on global prices.

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