Digital edition of WATT 2015 Poultry Trends available now

Find out what you’ve been missing in the digital edition of the 2015 WATT Executive Guide to World Poultry Trends, which is available online now.
Global poultry market grows despite avian influenza
Learn why poultry meat production worldwide grew slowly during 2015 due to global production challenges and trade restrictions. Read more…
10-year poultry market outlook positive
The Food and Agriculture Organization of the United Nations (FAO) projects that total poultry meat production will reach approximately 133 million metric tons by 2024. Read more…
Poultry production outlook positive but with slowing growth
Discover why poultry production will account for more than half of the world’s additional total meat output during the next decade. Read more…
World egg output grows despite disease impact
Despite the impact of avian influenza on many major egg-producing countries in 2015, egg production is still on track for continued growth. Read more…
Poultry meat trade influenced by disease, trade agreements
Diversifying diets around the world will help keep poultry import demand strong, but the effects of trade agreements, economic sanctions and avian influenza remain to be seen. Read more…
Global egg consumption to rise worldwide through 2024
Learn how increasing protein consumption and rising incomes are expected to cause global egg consumption to rise worldwide through 2024. Read more…

Poultry news developments for the week ending October 8

The global poultry industry had a busy week with one acquisition finalized, another planned, and a planned expansion for another company. A recall, a lawsuit and further concerns about avian influenza also made the headlines.
Here are 10 of the top poultry news items and blogs from WATTAgNet for the week ending October 8:

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US Labor Department accuses Pilgrim's of discrimination

The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has filed a lawsuit against Pilgrim's, alleging the poultry company systematically discriminated against qualified African-American applicants seeking entry-level jobs as laborers and operatives at its plant in Marshville, North Carolina.

Aviagen completes expansion at Oklahoma hatchery

A $9.5 million expansion project at Aviagen's hatchery in Sallisaw, Oklahoma, has been completed.  

Post Holdings completes Willamette Egg Farms acquisition

Post Holdings has completed its purchase of Willamette Egg Farms.  

Salmonella worries prompt Koch Foods chicken recall

Aspen Foods, a division of Koch Foods, is recalling about 561,000 pounds of frozen, raw stuffed and breaded chicken products over Salmonella concerns.

 

Countries reach Trans-Pacific Partnership agreement

Negotiators from 12 countries reached an agreement on October 5 on the Trans-Pacific Partnership (TPP), resulting in a trade pact that vows to cut trade barriers as well as set labor and environmental standards.  

Long run of US broiler profits to end in 2016

Gary Thornton: U.S. broiler margins have been profitable for all but three quarters over the last four years, but they are projected to turn to losses beginning in the fourth quarter of 2015 and through 2016. 

Activists say alternative animal agriculture is bad

Terrence O'Keefe: I've never liked the term 'factory farm' and, according to comments made by speakers at the 2015 Animal Rights National Conference, in Alexandria, Virginia, some animal rights activists have soured on the term as well. 

BRF plans aquisition to grow presence in Argentina

Brazilian meat, poultry and food company BRF has plans to expand its presence in Argentina with the proposed acquisition of the Vienissima, GoodMark, Manty, Delicia, Hamond, Tres Cruces and Wilson brands.

Avian flu cases continue in Taiwan, Vietnam and Nigeria

The World Organisation for Animal Health (OIE) has received reports about a number of new outbreaks of highly pathogenic avian influenza in Taiwan, Vietnam and Nigeria over the last two weeks.

 

HKSCan to build new poultry facility in western Finland

Nordic meat and poultry company HKScan is investing EUR80 million in a new poultry production facility in the western Finland city of Rauma.

Global poultry trade to remain under pressure to year end

Global poultry trade and poultry prices are expected to remain under pressure for the remainder of this year due to the challenges posed by avian influenza. The long-term impact may be significant due to several trade bans on breeding stock in importing countries.
“Poultry industry fundamentals are facing meaningful headwinds with stronger than expected feed prices due to a strong US dollar, increased competition from falling pork prices and restrictions on trade,” says Rabobank animal protein analyst Nan-Dirk Mulder. “Prices for whole chicken, leg quarters and chicken feet are declining further, while breast meat prices remain relatively strong.”
Many countries in Asia, including China, which have implemented restrictions on trade in breeding stock, might be affected by low chicken meat supply next year due the expected future shortages in local breeding value chains.
However, the bank predicts that producers in countries with balanced markets will continue to enjoy healthy markets. Supply growth discipline is important under such worsening conditions, Rabobank continues. This has been proven by countries with healthy market balances in their markets, such as the US, Brazil, South Africa and Japan, where the industry is still making good margins.


Regional performance
The EU is expected to see a slight margin recovery over the rest of this year. Its trading position will improve due to the weak euro and possible lifting of avian influenza related trade restrictions.
The U.S. will continue to experience a wave of highly pathogenic avian influenza outbreaks. Margins, however, will remain strong, on robust home market demand.
Brazil, the bank predicts, will continue to maintain its competitive position this year, boosted by the weak real and avian influenza bans placed on its competitors.
Russia has a less bullish outlook, with ongoing higher feed costs and the removal of the wheat export tax.
China is expected to experience fewer avian influenza cases as the year progresses, yet they will continue to have a significant impact on the poultry industry, and margins are expected to be the lowest for five years.
Thailand is expected to face oversupply, despite strong exports, while in South Africa, margins will improve, but the outlook there is cloudy due to the likely return of EU exports.

United Arab Emirates poultry production to drop before rebounding in 2013

Poultry meat production in the United Arab Emirates is unofficially expected to drop to 37,000 tons in 2012 before rebounding to 41,000 tons in 2013, according to the U.S. Department of Agriculture.
Poultry meat production was constrained due to outbreaks of diseases which resulted in some plants either closing or scaling down their operations, and the increasing prices of feed and high operational cost have added to the problems of poultry producers. A newly constructed farm in Abu Dhabi is expected to start production in 2013, and according to industry sources, early this year Saudi Arabia stopped exports of poultry meat. This development has encouraged UAE producers to increase their production, said the USDA.
Five large-sized farms produce about 75 percent of the local poultry production, half of which is produced by a single farm in Dubai; two medium-sized farms produce nearly 10 percent of the total, while the balance is filled by several small operations. Major poultry operations are fully integrated, including on-farm slaughtering facilities. They also have their marketing, sales and distribution staff and some even retail directly. Domestically produced poultry is generally marketed fresh/chilled. Summer heat causes both production and marketing problems when demand for poultry meat drops, as many UAE residents travel abroad fleeing the high temperature, according to the USDA. During the summer months major operations will freeze some production. In an effort to expand market share, some producers are producing limited amounts of chilled boneless or bone-in parts.

In 2011, almost 96 percent of the total poultry imported by UAE were frozen chicken, 50 percent of which were frozen meat and edible offal of chicken not cut in pieces, and 46 percent frozen cuts and offal parts. Similarly, 98 percent of total exports were frozen chicken, 64 percent of which were frozen cuts and edible offal, and 34 percent frozen meat and edible offal not cut in pieces, and almost 94 percent of reexports were frozen chicken, 53 percent frozen cuts and edible offal and 41 percent frozen meat and edible offal not cut in pieces.

Venezuela poultry production, consumption to continue expanding through 2012

The average monthly production of Venezuelan chicken in 2011 was about 80,000 metric tons, and it should increase to 86,400 metric tons in 2012, according to the Venezuelan Poultry Federation, FENAVI (Federación Venezolana de Avicultura). The average production of eggs for human consumption during 2011 was 1.18 million boxes of 360 units and it is estimated to increase about four percent in 2012.
The total per-capita consumption of all meat in Venezuela is approximately 73.5 kg. About 53 percent of this amount is provided by the chicken sector (38.96 kg per capita per year). Poultry consumption is increasing faster than that of beef and pork because poultry remains relatively inexpensive compared to other sources of animal protein, according to FENAVI.
All poultry imports are carried out by the government of Venezuela, largely from Brazil. Imports of poultry meat were reported at 226,181 tons during 2011 and are estimated to increase in 2012. January to June imports reached 117,475 tons.
Domestic eggs and poultry remain under a price control policy, though according to industry sources, the controlled retail price for poultry products does not fully compensate for increasing costs of production. The poultry sector represents 30 percent of Venezuela’s total agricultural gross domestic product and over 48 percent of its animal production. Poultry production is the most important component of Venezuela’s agricultural production by value, with 24 percent of the total. The government continues to play an active role as a poultry supplier and importer through its state-owned food distribution networks.

Poland poultry producer expanding into Asia

Polish poultry producer Konspol is expanding into the Asian poultry market, having already invested in China and Indonesia and recently begun collaborations with companies in Japan, according to reports. Konspol has opened poultry factories in the Chinese and Indonesian markets as well as Argentina, according to the company. It is now working with Japanese firms that wish to break into the European market. 

Poultry, eggs central to Northern Ireland agricultural output

Poultry meat and eggs contribute some 18% to Northern Ireland’s gross agricultural output and consume one-third of the compound feed trade there. With an estimated turnover of GBP 629 million (US$1 billion), the poultry meat industry provides 17% of the gross turnover of the food and drinks processing sector and more than 5,500 full- and part-time jobs.
In 2010, 105 million chickens were processed in Northern Ireland, along with 1.5 million turkeys, according to Agriculture and Rural Development Minister Michelle O'Neill. Current production of hatching eggs stands at 4 million per week, of which 1.2 million are exported. “Primary production of poultry meat and eggs is an important contributor to income on a significant number of farms across the province, nearly all of which are family businesses," said O'Neill at a recent Poultry Industry Education Trust conference. "They form the basis of our efforts to ensure a sustainable and profitable industry.” 

Argentina aims to raise broiler exports by 2017

Argentina exports 18% of its total broiler meat production and aims to increase this share to 25% by 2017, according to reports.
Of the 60 countries Argentina currently exports to, Venezuela is its top destination, receiving 60,000 metric tons of meat, while Chile comes in second at 30,000 metric tons of meat annually. Argentina also expects its domestic consumption of chicken meat to grow from the current 39 kilograms per head per year to 45 kilograms by 2017. In 2003, that number was just 21 kilograms. “Argentina only recently entered the world poultry market, but its low cost structure and favorable sanitary status make it a key player to meet growing global demand, providing it continues to invest in expansion," said a spokesperson for Dutch-based agro-investment bank Rabobank. “Although Argentina’s poultry industry is relatively concentrated, opportunities remain for consolidation by large domestic companies or foreign players entering the market.”
Argentina currently has roughly 40 poultry companies throughout the country, producing a total of 1.7 million tons of meat.

Pakistan poultry industry wants government export help

The Pakistan poultry industry is calling for government support in getting the country approved as a meat exporter in Halal food-importing countries, saying that there is significant potential for the export of chicken products to the European Union and Gulf Cooperation Council countries, as well as North America.
According to producers, no significant exports can take place without government support. Pakistan should provide incentives to poultry exporters and freight services from Karachi, Lahore and Islamabad at preferential lower rates to help boost exports of perishable commodities such as hatching eggs and day-old chicks, said the poultry producers. In addition, import duties on such products, which have been lowered, should be raised ­— or the imports banned — to protect the domestic market.

World’s Top Poultry Companies--producers continue to invest, merge, expand, and respond to consumer demand

The October issue of Poultry International returns to our exclusive compilation of World’s Top Poultry Companies.

In this issue (view digital edition of this issue), you will find key data on the major players around the world. You can see, for example, what they produce and how much each year. World’s Top Poultry Companies, however, offers much more than this, and for the full version you will need to go to the online database.

We have redesigned the Top Companies online database, making it bigger and better; with more than 450 companies and growing. We’ve also simplified it, making it easier to search by region, country or company name. Individual company records contain details of area of activity, output, facilities and number of employees, along with overviews, addresses and website details.

More good news
Poultry is a sector that continues to grow and so, despite the political and economic turmoil of recent months, there is still some good news.
In the US, output of poultry meat increased last year, with 22 companies in the WATT PoultryUSA’s 2011 rankings reporting increases in ready-to-cook chicken production. Of the top 10 producers, eight posted increases in RTC chicken production on an average weekly basis in 2010. There are companies planning investment for the future, although some producers have cut back.
The World's Top Poultry Companies database features more than 450 companies and continues to grow.
In Europe, the climate remains difficult. While Europe’s economies are either shrinking or growing sluggishly at best, consumers remain cautious about spending, and producers not only have to contend with this but also with competition from overseas. Despite this, Europe’s producers continue to adapt and innovate, and cope with an ever-heavier regulatory framework.

The database provides a listing of major producers by region, with each entry providing a link to detailed data.

While Asian economies may be outperforming their European and North American counterparts, growth is now slowing in China. Despite higher growth rates than most, the trend is now weakening.
Latin America may offer some cheer, but Brazil in particular is hampered by a strong economy.

The picture is not all doom and gloom, however. In an industry that remains fragmented, there are still opportunities for the bold. In Europe, for example, where the top three poultry companies account for the less than 15% of the market, HKScan’s purchase of Rose Poultry creates a major new player in the Northern European market.

Consumption to continue rising

While almost all sectors may currently be facing difficulties, one thing is for sure, consumption of meat will continue to rise. The OECD-FAO Agricultural Outlook predicts that, over the years to 2020, meat production will increase by 1.8% per annum and that this increase will be driven by poultry and pig production. The growth in demand over the period will largely stem from Asia, Latin America and oil exporting countries.

World meat exports are forecast to rise. At 1.7% annually, the rate may be lower than we are accustomed to, but remains, nevertheless positive. Again, poultry is predicted to be one of the two driving forces behind this increase, meaning that there are opportunities ahead. This more sluggish growth has been attributed to Russia’s policy of import substitution.
But do not think that the road ahead will be problem-free the sector. Volatility in feed prices is set to continue over the decade and the industry will be forced to look increasingly at improving feed efficiency. Alongside this, patterns of trade are shifting, as is consumer preference. While the world as a whole may be demanding more poultry meat, what people want and how people want it is constantly changing, offering both opportunities and challenges. Additionally, increasing numbers of countries are tightening their environmental legislation, which again, could benefit those companies agile enough to react but could cause problems for those that do not. 

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.

Philippines poultry, egg production grow first half 2011

Growth in the Philippines poultry sector showed a 3.6% increase in the first half of 2011, according to the country's Bureau of Agricultural Statistics. Poultry's contribution to the country's total agricultural production was 13.35%.
Chicken production grew by 3.8% and chicken egg production went up by 3.48%. The total gross for poultry was PHP 77.8 billion (US$1.83 billion), 0.16% higher than 2010 numbers.
Overall, agriculture in the Philippines posted a 5.48% growth in the first six months of 2011.

China poultry, egg prices up in August

China's poultry prices increased 29.3% year-on-year, contributing 1.89 percentage points to the rise in the country's consumer price index for August, according to the National Bureau of Statistics.
Egg prices rose 16.3%, contributing 0.14 percentage points to the CPI. Overall, China's CPI grew 6.2% year-on-year in August, a slight decrease from July's 6.5% increase, according to the NBS.

India poultry industry suffering from low prices, high production costs

Indian farmers are currently losing about 65 paise (US$0.01) per egg produced and up to Rs 8–10 (US$0.18–$0.23) per kilogram per live bird.

A three-month trend of falling prices and rising production costs for poultry products is causing problems for India, as farmers lose about 65 paise (US$0.01) per egg produced and up to Rs 8–10 (US$0.18–$0.23) per kilogram per live bird.
Typically, about 180.3 million eggs are produced every day across the country, according to records. The selling price now is about 60 paise less than the cost of production of Rs 2.50 (US$0.06) per egg. “The poultry industry is losing about Rs 90 million (US$2.03 million) a day due to under recovery,” said Kohinoor Hatcheries’ Dr. Raghava Rao.
The cost of production of broilers is also up, to about Rs 58 (US$1.31) per kilogram live body weight, and farmers on average get prices of Rs 50 (US$1.13) per kilogram. About 7 million broilers are produced in the country, and the industry is currently losing about Rs 700,000 (US$15,770) per day from broilers. “Chicken prices have crashed to nearly half from Rs 84 (US$1.89) per kilogram of live bird on March 24 to Rs 43 (US$0.97) per kilogram on April 14,” said Rao, adding that the price fall in summer is cyclical but the fall is steep this year.
Increased feed costs, mainly of maize, are pushing up the cost of poultry production, according to the industry. Maize is now selling for about Rs 1,350 (US$30.41) per quintal (100 pounds) compared with Rs 700 (US$15.77) to 800 (US$18.02) per quintal two years ago. Another ingredient, soya, which was Rs 900 (US$20.28) per quintal, is now priced between Rs 2,400 (US$54.07) and Rs 2,600 (US$58.57) per quintal.
India's poultry industry needs 14 million metric tons of maize per year and is growing by 20% annually. The maize production in 2010–11 is estimated to be 20.23 million metric tons across the country. High domestic demand, reduced acreage due to drought, farmers shifting to cotton and a good export market are keeping the prices of maize high, said Dr. G. Ranjith of SR Hatcheries. India's Andhra Pradesh Poultry Federation is calling for the government to relax the 15% duty on maize imports while panning maize and soya exports to help reduce feed and production costs.