Outlook for Broiler Production and Consumption
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1 Outlook for Broiler Production and Consumption David E. Williams Vice President July 17, 2017
2 Time Changes Everything 2
3 Time Changes Everything 3
4 Time Changes Everything 4
5 Time Changes Everything 5
6 Time Changes Everything 6
7 Time Changes Everything 7
8 Broiler 8
9 International Trade The ERS branch of the USDA released trade data for April at the beginning of last week. Contents revealed that April was a bit of a struggle for broiler exporters as just under 520 million pounds of broiler meat was exported during the month. This was 4.5% lower than the amount of broiler meat exported during the same month a year earlier and 15% lower than was exported in March Among other trade volume limiters, IEG is citing the stronger presence of US pork availability and attractive prices as the middle class expands and the two proteins compete for space internationally. 9
10 Mexico The world s largest importer of US broiler meat, Mexico, imported just 98 million pounds of US broiler meat during the month, down from 110 million during March, and market the first month since April 2012 that the country imported less than 100 million pounds of US broiler meat. Short run, the absence of a strong export program is bearish to domestic prices, especially for dark meat. Leg quarters have been neutral since gaining about a dime during March. 10
11 Asia Both supply and demand for broiler meat have been largely affected in Asian markets. Earlier this year, South Korea was dealing with it s largest outbreak of Highly Pathogenic Avian Influenza, which still appears to be an issue. China has not gone unscathed. It continues to battle HPAI, which has not only hindered domestic consumption there, but also destabilized the demand for broilers as the strain they are dealing with has caused a record amount of human deaths. China has recently gotten the go ahead to ship frozen fully-cooked broiler meat to the US. This is not necessarily bearish to US domestic programs, as the agreement penned between the two governing bodies was designed to open trade routes and reduce China s trade deficit. More than likely, we will see direct access to Chinese markets for US broiler meat producers become the next point to the topic, which at one time represented a $750 million/year industry. Broiler consumption in India is expected to be on the rise as a counter effect to the government outlawing beef consumption. 11
12 Brazil A favorable feed environment has returned viability to growth in Brazil s poultry industry after a very difficult year in However, recent scandals with the largest producer of broiler meat in Brazil has caused some clearance issues as importers of Brazilian broiler meat were alerted to instances of oversight with respect to food safety measures from the country. 12
13 Dark Meat Domestic consumption of dark meat increased in 2016 in the absence of stable export business, the continued strength has provided a boost to domestic wholesale values some 8-10 cents higher during the first 5 months of the year. With exports trailing off, however, the advent of slightly lower product values is likely to return. 13
14 Bird Sizes (They are actually smaller YTD compared to 2016) Instances of Woody Breast Syndrome are assumed to be the main contributing factor to lower broiler bird weights on average through the first four months of the year. This is a buck in the historical trend towards year-over-year growth in average bird weights and is drawing down expectations for ready-to-cook broiler meat production this year. 14
15 Broiler 15
16 Broiler 16
17 Broiler 17
18 Broiler 18
19 Broiler 19
20 Broiler 20
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