Rabobank: Poultry industry outlook won’t be hurt by Russian ban

Russia’s ban on poultry exports from the U.S., EU, Canada, Australia and Norway will not derail the bullish outlook for poultry meat prices, Rabobank stated in a report on the global poultry industry for the third quarter of 2014. Rabobank’s Food & Agribusiness Research and Advisory group published the report, stating that strong fundamentals will promote further margin improvements in nearly every region of the world.
“The global outlook for the poultry industry is bullish for the remainder of 2014,” said Nan-Dirk Mulder, a Rabobank analyst. “We expect strong fundamentals to keep white meat prices high, while dark meat prices may come under some pressure.”
Impact of restrictions on poultry trade by South Africa
Recently introduced restrictions on the global poultry trade by South Africa will have an impact. Brazil has been identified as the big winner from this action. Meanwhile, exporters in the U.S. and EU will have to compete to find alternative markets. While this will affect price levels, Rabobank believes it should not have a major impact on local poultry industries, as market fundamentals remain relatively strong.
United States outlook
In the United States, poultry prices continued their seasonal climb in the second quarter, driven by higher breast meat values. With well-balanced market conditions with measure supply growth, Rabobank expects hicken production in the U.S. to increase 3 percent in 2015.
European Union outlook
Rabobank says the outlook for the EU poultry market is bullish, with the chicken market continuing to be relatively strong because of high demand and a limited supply.
Asian outlook
Poultry marketers in China are showing signs of recovery as worries over avian influenza are fading and industry initiatives to reduce production capacity are taking effect. Since poultry and pork prices are correlated, a bullish outlook on pork prices will give poultry strong support in China in the coming months.
Japan’s poultry industry also has a bullish outlook for the second half of 2014, with ongoing low stock levels and limited expansion. A better Japanese demand is driving a recovery in Thailand. India’s poultry industry is experiencing a fragile recovery.
South American outlook
Exports currently drive a positive outlook in Brazil, though the domestic poultry market is currently being affected by a relatively weak domestic demand because of a reduction on consumer spending power.
In Argentina, the industry has been affected by a downturn because of weak domestic consumption and a slow economy.

Higher tariffs on poultry imports urged in Papua New Guinea

Papua New Guinea Prime Minister Peter O'Neill is being urged by Morobe Governor Kelly Naru to impose higher tariffs for poultry imports in an effort to aid the country's poultry industry. If higher tariffs are not an option, the government should look into giving subsidies to poultry producers in Papua New Guinea, Naru added.
The cheap import of poultry to Papua New Guinea has greatly affected the Papua New Guinea poultry industry, Naru said.
"The cheap importation of poultry products is affecting our farmers, our businesses, our two big poultry companies in Zenag Highlands and Tablebirds, as well as our small holder farmers because of the cheap overseas chickens and eggs," said Naru.
O'Neill is expected to direct relevant departments to look into the matter, according to the Solomon Star.

Poultry prices rebound in China thanks to easing of H7N9 fears, subsidies

Poultry prices in China have bounced back and purchases in the sector have increased in recent weeks, signaling an easing of worries about outbreaks of H7N9 avian influenza.
The price recovery followed the issuance of government subsidies to help the industry during its struggles. The price per kilo of dressed chicken hit $2.18 on May 15, which climbed from an annual low of $2.09, the People's Daily reported. The May 15 figure, however, was still 4.2 percent lower than what it was one year ago.
Since the scare hit in March, the industry has also seen an increase in purchases. According to data from the country's Ministry of Agriculture, the number of transactions increased 25.6 percent for the week of May 6 when compared to the equivalent week from April. The recovery still has a way to go, as the purchase numbers were still down 67.2 percent when compared to the early May figures of 2012. 

Broiler meat prices hit record highs in India

Broiler prices in India have reached record levels of Rs 75 (US$1.37) per kilogram not seen since 2011, according to reports. The price levels were brought on by a strong demand, higher feed costs and the arrival of winter.
Broiler meat production registered an 8.97-percent rise to touch 3.1 million metric tons in 2012 and is likely to grow an additional 8.23 percent to touch 3.4 million metric tons in 2013, according to the U.S. Department of Agriculture.
Rising feed prices that account for one-third of the cost of production are considered a major reason for the steady rise in prices, as a 75-kilogram bag of broiler feed cost Rs 2,702.50 (US$49.38) in 2012, compared to RS 1,894 (US$34.61) in 2011.
Meanwhile, egg prices are also rising, owing to pick-up in retail demand. The National Egg Coordination Committee has increased the price of an egg by six paise to Rs 3.40 (US$0.06).
Pick-up in consumption due to winter and a growth in demand from confectioners are attributed to the rise in prices, according to the industry. The committee has dropped layer rates for birds of 1.3 kilograms to Rs 35 US$0.64) to boost consumption, as it is a perishable product.

Pakistan poultry prices up 40 percent on insufficient stock

Pakistan poultry products have increased in price by 30–40 percent in less than a week due to insufficient domestic supplies, according to a recent survey.
Chicken meat has increased to Rs 166 (US$1.70) per kilogram from Rs 110 (US$1.13) per kilogram since December 13 in the wholesale and retail market. Live chicken is currently being sold at Rs 250–260 US$2.57–US$2.67) against the previous week's rate of Rs 200 (US$2.05). Egg prices have increased from Rs 110 to Rs 130 (US$1.33) per dozen in the open market.
Minimum poultry rates had previously been fixed due to a stock surplus six months ago. "We have been forced to quit business as a number of poultry farms closed down due to facing immense financial losses," said Haji Jhangariz, a wholesaler and owner of a local poultry farm. He said that dealers have had to sell chicken at the prices fixed by the district administration for the last three to four months, and that because of those restrictions 50 percent of poultry farms have been closed down due to growing financial losses to the owners. "The closure of a large number of farms causes huge shortages of poultry products in wholesale and open markets," said Jhangariz.
High poultry feed prices and overall production costs have also made it difficult to lower prices and compete with other markets, according to farmers.

Qatar chicken prices up on global production challenges

Qatar's imported chicken prices have gone up since mid-September, anywhere from 15 percent to 40 percent according to retailers, with production shortfalls in Brazil and Saudi Arabia contributing largely to the problem.
The prices of brands like Sadia and Al Wataniya have increased considerably in the local market, said retailers. Sadia, imported from Brazil, costs QR12.50 (US$3.44) per kilogram, while Al Wataniya from Saudi Arabia traded on October 28 for between QR13.25 (US$3.65) and 13.75 (US$3.78) per kilogram. The prices of such brands as Doux (QR11.50/US$3.16), Asafa (QR12.30/US$3.38) and Delicia (QR10.50/US$2.89) have also grown from their previous levels by at least 15 percent to 30 percent since September, said a trader. Hilal, another brand from Brazil, was sold for QR10.50 per kilogram.
A significant fall in production at the global level, an increase in overheads and the increasing price of poultry feed across the world have all contributed to the latest price hike. There is also an increase in poultry demand in Saudi Arabia due to the current festival season. “Even though the main festival period is over, our experience with the suppliers in Saudi Arabia is that the demand will continue to be high there at least for the next fortnight,” said the representative of a major supplier in the local market. Saudi Arabia is meeting only 45–50 percent of its demand from local supply, and during the one-month period before and after the festival an acute shortage is felt throughout the kingdom. According to the industry, there has been a nearly 40 percent jump in poultry feed prices in Saudi Arabia in the last three months.

Turkey poultry exports rise on Iran demand

Iran's demand for Turkish poultry increased in July as western sanctions on Iran doubled the cost of poultry there, according to Sait Koca, the chairman of Turkey’s white meat association and the CEO of poultry company Beypilic.
Turkey exported $231 million in poultry in the first six months of 2012, up 40 percent compared to 2011 numbers. This increase was mainly due to higher demand from Iran and Iraq, according to Koca.

Chicken price to not exceed RD$46 in Dominican Republic

On July 23, the Committee on Agriculture of the House of Deputies, representatives of the white meat industry and Pro Consumidor set a limit of RD$46 (US$1.18) per pound of chicken sold in stores in the Dominican Republic.
According to a source, the agreed-upon system establishes the following prices:

• Chicken producers will sell chicken at RD$28.50 (US$0.73) per pound
• Distributors 1 (individuals or companies that sell live and buy it directly from the farms) will sell chicken at RD$31.50 (US$0.81) per pound
• Distributors 2 (retailers) will sell chicken at RD$42.00 (US$1.07) per pound
• Distributors 3 (which includes grocery stores) will sell chicken at RD$46.00 (US$1.18) per pound
• Slaughterhouses will sell chicken at RD$50.50 (US$1.29) per pound
• Supermarkets will sell chicken at RD$55.60 (US$1.42) per pound

UK poultry farmers call for 20 percent price increases

UK poultry farmers are calling for supermarkets to raise the prices of eggs and poultry by as much as 20 percent, in order to offset the increase in chicken feed prices caused by the ongoing U.S. drought that has damaged corn and soybean crops, according to reports.
The cost of producing a chicken has grown by up to 25 percent since the beginning of 2012, said Peter Bradnock, chief executive of the British Poultry Council. "We need to pass the price increase on," he said. Feed makes up roughly 60 percent the cost of producing chicken. "There are more people [in the poultry industry] making losses than making profits at the moment," said Bradnock.
Feed increases are hurting farmers and making it difficult to profit, according to Duncan Priestner, chairman of the National Farmers' Union. “What the supermarkets are hoping is that the price of feed will come down again and that farmers will just have to grit their teeth and take this on the chin until prices come down,” said Priestner. “The problem is if these prices don’t come down then the supermarkets are going to have to react to that, otherwise farmers won’t be able to put the next stock of chickens in because they can’t afford it.”

Indonesia broiler sellers may strike over prices

West Java, Indonesia's 5,000 broiler chicken sellers in 38 markets in Bandung are threatening to strike over an increase in prices, saying that unless the government does something, they will stop selling the meat.
The price of broiler chicken meat has increased from Rp 26,000 (US$2.70) per kilogram to Rp 32,000 (US$3.38) per kilogram. According to sellers, an ideal price would be Rp 24,000 (US$2.54) to Rp 26,000 per kilogram. The price increase is irrational, and conditions are making it hard to sell the meat, said Yoyo Sutarya, head of the Bandung Chicken Seller Union. "Our purchasing power decreases and this has greatly affected our business," he said.
Increases have been going on since early June, according to West Java Industry and Trade Agency head Ferry Sofwan Arif, even though there is no shortage of stock. He said that the agency took a survey in five markets in Bandung and found that there was a 15 percent increase on broiler chicken meat. “We should assess the price increase by also taking into consideration the prices of other components, such as chicken food and production costs,” said Arif.
West Java sellers are calling for poultry breeders to not raise butchery or transportation costs, as it might increase the selling price of chicken meat further.

Chicken boycott planned in Dominican Republic due to high prices

Dominican Republic consumer rights group Pro Consumidor has chosen July 17 as a "day without chicken" in the country after producers, retailers and others involved in poultry selling could not come to an agreement on a price by July 4, according to reports. The boycott comes in spite of previous indications that an agreement might be reached.
On July 9, Pro Consumidor met with the House of Representatives’ Standing Committee on Agriculture, Ministry of Agriculture, and the producers and marketers of chicken.
The president of the Standing Committee on Agriculture, José Jáquez, announced the committee has scheduled the following meetings in order to agree on a price for chicken meat:

• July 16: The commission will meet with producers and distributors
• July 19: The commission will meet with slaughterhouse operators
• July 20: The commission will meet with supermarkets and retailers
• July 23: All above will meet again to define an appropriate price for poultry meat 

Jordan trade ministry investigating poultry price increases

Jordan's Ministry of Industry and Trade has opened an investigation into a recent increase in the price of local fresh chicken to determine whether it's a result of supply and demand issues or a rise in production costs, according to reports.
The country's Consumer Protection Society has rejected the increase, calling it "unjustified" and saying that merchants are "exploiting" consumers ahead of Ramadan. The Ministry said strict legal measures will be taken if evidence of manipulation is found.

Chicken prices lowered in Dominican Republic after boycott threat

Chicken in the Dominican Republic can be sold for no more than 43 pesos (US$1.10) per pound, and unfair commercial practices which jeopardize consumers will not be tolerated, according to Pro Consumidor Director Altagracia Paulino. Paulino threatened to call for a chicken boycott to force vendors, middlemen and farmers to lower their prices.
"A pound of chicken can be sold for 40, 38 or 42, but not more than 43 pesos," said Paulino. "We’ll enforce Article 419 of the Penal Code on merchants who sell it for more than 43 pesos, which establishes penalties for speculation." She did make an exception for supermarkets, which she said can sell chicken for 45 pesos (US$1.15) per pound due to their additional expenses.

Poultry industry experts examine competitiveness in global market

Top poultry professionals dissected the strengths and weaknesses of the U.S. poultry industry among its international competition during the Poultry Leadership Roundtable at the 2012 International Poultry Expo on January 23. 
Watch videos:
• Excess poultry production can drive down prices 
• US poultry industry recognizes importance of global trade
The event, sponsored by Pfizer Animal Health, included discussions on the effects of politics, the cost of labor, company consolidation and production rates on the global poultry market.
Gordon Butland, director of G&S Agri Consultants. Co. Ltd., said overproduction of poultry is a serious problem. The excess capacity in Brazil, Thailand and elsewhere is undermining profitability in the global poultry industry and while 2011 was difficult, 2012 may be even more difficult, said Butland.
Jim Sumner, president of the USA Poultry & Egg Export Council, talked about U.S. poultry industry executives changing their attitudes about exports with their recognition of the growing importance of international trade. With the U.S. fighting the necessary legal battles to reopen its trade access to China, Sumner said he believes the U.S. has a 99 percent chance of prevailing, with the assistance of the World Trade Organization, in its case against China.
You can also watch videos of Butland and Sumner discussing competition in the poultry industry. 

South Africa poultry prices may increase 20% in 2012

South Africa poultry prices are expected to rise by 10% in December due to demand and may jump by an additional 20% in the new year as poultry feed input costs continue to rise, according to the South Africa Poultry Association.
Imports of duck, turkey, guinea fowl, geese and special chicken cuts may help offset the holiday increases, but local producers continue to struggle, according to reports. “The real problem is that maize import prices are not determined by local production costs," said Kevin Lovell, chief executive of the SA Poultry Association. "They are determined by the U.S. Chicago Board of Trade. We are expected to run out of maize...and we will pay R1,000 per ton (US$117.77) more than export parity prices.” At least 143,000 tons of white maize and 60,000 tons of yellow maize will need to be imported this season, according to reports.

Industrias Bachoco reports net loss for third quarter 2011

Industrias Bachoco reported a net loss of Ps. 106.9 million (US$8.13 million) for the third quarter of 2011, compared to a gain of Ps. 635.1 million (US$48.3 million) in the third quarter of 2010, according to the company's latest financial report.
Chicken products sales in the third quarter grew 0.7% compared to the same time in 2010, which resulted from a 3.9% increase in sales volume, partially offset by a 3.1% decrease in chicken prices as industry supply for chicken products rose during the period. Sales of table eggs increased 8.8%, driven by a 16.3% increase in prices, partially offset by a 6.4% drop in sales volume.
“The third quarter’s results were sharply affected by several external conditions that lead the company to post negative net income in the quarter," said CEO Rodolfo Ramos. "Mainly, the continuous increase in the cost of grain and oversupply conditions within the Mexican poultry industry, which led to a reduction in our chicken prices while compared with the same quarter of 2010. On a positive note, total sales increased across the company’s main product lines, preserving positive EBITDA (earnings before interest, tax, depreciation, and amortization) for the quarter, while adequate administration of our financial instruments softened the impact of the peso’s depreciation when compared to the U.S. dollar."
According to the company, Bachoco’s aim for the next year will be to maintain strict cost and expense controls and productivity improvements while serving the relevant markets and maintaining a healthy financial position.

US broiler production expected to decline through end 2011

Broiler stocks will end the year at 660 million pounds.

U.S. broiler production is expected to decline at the end of the third quarter in 2011 and moving into the fourth quarter as reductions in the number of chicks placed for growout more than offset higher average weights, according to the U.S. Department of Agriculture.
Broiler cold storage holdings are expected to end 2011 at 660 million pounds, down considerably from 2010 numbers. Lower production and lower stock levels are expected to eventually place upward pressure on prices, but this effect will be partially offset by a sluggish domestic economy.
Turkey production was higher in August, but is expected to decline in the fourth quarter of 2011. Lower stock levels for whole turkeys have placed upward price pressure on whole birds. Wholesale whole-hen turkey prices have increased, with third-quarter prices averaging $1.06 per pound, up 9% from 2010 numbers.
For more broiler statistics, visit http://www.wattagnet.com/marketdata.html.

Pakistan poultry prices drop on improved supplies

Pakistan's poultry prices have started to drop after a month of sustained improved chicken meat supplies in the retail and wholesale markets, according to reports.
Prices had previously climbed to highs of Rs 300 (US$6.12) per kilogram, but are now at around Rs 240 (US$4.90) per kilogram. Poultry industry traders have attributed the drop in prices to increased supplies in Punjab. Many of the country's coastal areas were affected by widespread rains, which caused significant financial losses to the poultry industry — into the billions of rupees — that farmers are only now beginning to recover from. A resulting supply shortage drove prices out of the range that local consumers could afford, adding to the industry's difficulties. Farmers say they hope the price drop will help speed their recovery.

UAE poultry, egg producers suffering in tough market

The UAE poultry industry had been suffering heavy losses over the last 12 months, and there are fears that some producers could leave the industry.
The UAE does not produce any grains, and so is totally dependent on imports, making it particularly susceptible to increases in international prices of maize, soy and bean meal. Maize prices in the country currently stand at some US$425 per ton, and soy meal at US$502 per ton. The price of layer feed ranges from US$460 to US$485.
In addition to increasing feed prices, some emirates have raised their electricity tariffs and diesel prices. These increases have also fed through into other inputs used by the poultry industry.
Little relief on horizon
Despite input costs almost doubling, producers have not been able to pass this increase on to consumers, as poultry prices were capped in 2007 by the Department of Consumer Protection. Broiler producers have had some relief in the form of a 20% price increase that was granted earlier this year; however, no such change had been afforded to egg producers. Producing eggs now costs US$1.80 per dozen, yet at retail level, a dozen eggs sells for US$1.74, while a fresh chicken is priced at US$4.6 per kg and frozen chickens sell at US$2.75 per kg.
Although the emirate of Abu Dhabi has been supporting producers by supplying feed to its producers with a 30% price reduction, the region accounts for only 15% of total chicken and egg production. The poultry and egg industries are spread across all seven emirates and no support has been given by the other six governments. Poultry producers have been further squeezed by the continuous increase in the discounts and shelf-rentals charged by retailers. Poultry prices may be controlled and monitored, yet the rebates charged by retailers are not checked by the authorities.
Because of these difficulties, the poultry industry in the UAE has become increasingly vulnerable to cheap, subsidized imports, and this is deterring investment in the sector. Of particular concern is poultry meat from Saudi Arabia, where there is a 70% discount on the price of poultry feed, but there is also competition from Oman, Brazil, Argentina and Turkey.
There are fears that without either a drop in input prices or increases in selling prices, many producers may leave the market. 

New Delhi poultry prices rise on short supply

The wholesale price of live weight chicken in New Delhi has gone up from INR 72 (US$1.53) per kilogram to INR 93 (US$1.98) per kilogram in just over a month on short supplies, an increase of over 29%, according to the data released by the poultry federation of India.
Correspondingly, the retail price of dressed chicken has jumped by 50%, from INR 120 (US$2.56) per kilogram to INR 180 (US$3.83) per kilogram. A rise in humidity and a corresponding hike in power rates have also contributed to the gain in prices, according to the industry. Even wholesale egg prices have gone up, from INR 2.45 (US$0.05) per piece to INR 2.60 (US$0.06).
Wholesale broiler prices have remained relatively stable at between INR 62 (US$1.32) and INR 70 (US$1.49) per kilogram, depending on the area. Poultry feed prices have held steady at INR 19,600 (US$417.57) per metric ton.