The second quarter is expected to close with higher poultry prices, according to Rabobank.
Bullishness has been driven by relative prices support from high beef and pork prices, alongside recovering demand and more balance in supply and demand in most regions of the world. This is expected to lead to an improvement in profitability for the global poultry industry.
“Under improved global market conditions, led by the North American regions, a slight increase in global chicken prices is expected,” commented Rabobank analyst Nan-Dirk Mulder.
“We see an increasingly balanced market, where supply discipline is more the order of the day and improving margins will be the likely result. However, markets remain volatile and any change in fundamentals, especially from the supply and feed side, will impact global prices. Suppliers should look to keep production growth disciplined.”
Feed price outlook
Global feed prices are expected to decline in the third and fourth quarters based on current fundamentals and a good crop outlook for wheat and soybeans. Despite this positive outlook, the possible return of volatility in feed prices remains a threat to the poultry industry industries in all regions as stock levels remain low.
Global grains and oilseads prices have recently increased and old crop grain markets are tighter than expected. Ongoing concerns about the situation in Ukraine and the potential threat of an El Nino event are creating some market volatility, and animal disease outbreaks also remain a concern.
United States
The U.S. is on track to perform better this year than last - which was one of the most profitable years of the past decade. The poultry industry will benefit from lower beef and pork production, a limited breeder flock, increasing exports, and favorable feed costs.
European Union
Margins in the EU poultry industry are quite strong. Markets are reasonably well balanced. There was a reduction in production during the first quarter in comparison with the first three months of 2013, and relatively strong demand.
China
Avian influenza outbreaks have decreased, coinciding with warmer weather during the second quarter. The negative effects of the disease on consumption is diminishing and the market is showing signs of recovery. Prices at retail level and for live birds are higher.
Brazil
Poultry meat prices in Brazil are thought to have held firm during the second quarter as a consequence of the high prices of competing animal proteins, as well as in response to high demand on the home market and from overseas.
