The global poultry market is set for a decline in the first quarter of the year in most regions, except for the United States, a new report by financial services provider Rabobank has said. The market has been hit by a series of factors that are predicted to affect performance in the first quarter and margins in the second quarter of the year.
According to Rabobank's Poultry Quarterly 1, the market is already feeling the impact of a sharp hike in feed prices, which currently exceed earlier projections by up to 15 percent. Other factors to play a role include avian influenza in China and an overall slowdown in the Asian economy, Rabobank said.
Nan-Dirk Mulder, analyst at Rabobank, explained that international trade will be affected by a decline in global trade volumes and falling product prices, particularly for leg quarters. These will also contribute to a shift in trade streams, with Thailand experiencing a positive development thanks to resuming trade with Japan recently, whereas Brazil is expected to take the heaviest blow.
The United States is also predicted to see a rise in profits, since the poultry industry is likely to benefit from the problems affecting the domestic pork and beef industries. The porcine epidemic diarrhea virus that kills young pigs, and a shrinking US beef supply, are likely to pave the way for a successful year for the poultry industry, the report concludes.