“The industry is currently benefiting from improved market conditions after avian influenza (AI) pressure has reduced significantly, following the northern hemisphere winter months, even though it has not moved away fully,” according to Nan-Dirk Mulder, senior analyst - Animal Protein. “Relatively tight supply in the aftermath of the 1H 2017 perfect storm, caused by AI and the Brazilian ‘weak flesh’ meat scandal, is another positive for the global poultry industry. On the other hand, demand is recovering as AI has faded from the headlines.”
The US has done well this year with chicken prices positive since the beginning of the save the month of January. Domestic consumption and exports have pushed prices up over the three year average due to breast price increases through the summer. US production continues to increase due to slaughter numbers being up 1.6 percent year-over-year and production is on track to meet the expectation of a 1.7 percent increase over 2016.
China’s recovery from the 1H AI crisis was quick, but cases of human AI are still occurring albeit at a slower pace. This in addition to demand recovery and tight supply due to import restrictions and environmental regulations has affected the market and raised process.
The meat scandal in Brazil caused a large impact and exports dropped significantly (down 9 percent) in the second quarter of the year. Brazil did gain market share and its latest export figures match last year’s record levels.
Global meat trade has been hit hard (down 5 percent YOY) by the 1H 2017 perfect storm. The big winners have been Thailand and the US, which gained market share against Brazil, the EU, and China, due to the meat scandal (Brazil) and AI-related trade restrictions (EU and China).