The U.S. poultry industry has an exceptional opportunity as the North American swine production declines as a result of widespread porcine epidemic diarrhea (PED) virus cases, according to a recent report published by Rabobank. In the report, Rabobank states that the PED virus has to date impacted about 60 percent of the U.S. breeding herd, 28 percent of the Mexican herd, and is beginning to develop in Canada.
PED virus, which was first discovered in the U.S. in 2013 and has no known cure, is expected to lead to a North American pork production decline of 6-7 percent, according to Rabobank. The decline in pork production that is expected to continue through 2015, combined with decreased beef production in the U.S. as a result of the 2012 drought, presents a tremendous opportunity for U.S. poultry producers as more pork and beef consumers will look to poultry as an alternative.
However, in order for the U.S poultry industry to fully capitalize on the potential increased demand for chicken, production would have to rise by 8 to 9 percent to offset the shortfall from beef and pork. A limited U.S. breeder flock and continued high demand for fertilized eggs from Mexico will keep supply growth restrained, the report suggests. As a result, Rabobank expects chicken prices and margins to climb during the spring and summer of 2014, yielding a very favorable year for the U.S. chicken industry.