But despite concerns about the spread of highly pathogenic strains of bird flu, Rabobank said the outlook for the global poultry industry remains upbeat. Tailwinds for the sector include high beef prices, lower feed costs and relatively strong demand in most regions.
“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 US 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.”
Additional factors impacting the global poultry trade include exchange rate volatility and political turmoil in regions such as the Middle East and Eastern Europe. These factors are driving lower trade volumes, prices and shifts in trade streams, Rabobank said.
On a regional basis, Rabobank analysts maintain a positive outlook for the United States' poultry industry. But uncertainties remain because of AI outbreaks in the central US. Margins are expected to remain high in 2015, but the biggest variable is industry expansion.
Ongoing AI issues and lower pork prices will soften demand for poultry meat and growth in Mexico.
Meanwhile, Brazil beat back export challenges to begin 2015 on a bullish footing. Lower oil prices will impact the Middle East, but exports are expected to remain strong on demand from Asia, analysts said. Lower feed costs also are supportive of margins.
The European Union poultry sector is recovering, but supplies currently are tight. Ongoing avian flu concerns and closed export markets threaten the EU's poultry market outlook, according to Rabobank.
Avian influenza and food-safety issues have landed China with an oversupply of poultry entering the first quarter of 2015, Rabobank reported. Cases of humans infected with avian influenza have forced shutdowns of live poultry markets, while retail prices for poultry remained flat during peak periods.
Japan’s poultry industry is still bullish despite ongoing avian influenza outbreaks. A strong Thai baht has been supportive of exports, according to analysts.
Rabobank said its outlook for the Russian market remains very bullish on low supplies of poultry. Expect tight market conditions to continue on expensive, limited imported volumes and restrictions on growth, analysts said.