Poultry production going strong but challenges lie ahead

The outlook for the global poultry market is good, but challenges will influence the picture in the short term, according to a market analyst.

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Dr. Andrick Payén, Rabobank | Benjamín Ruiz
Dr. Andrick Payén, Rabobank | Benjamín Ruiz

The outlook for the global poultry market is good, but challenges will influence the picture in the short term, according to a market analyst.

At the Latin American Poultry Summit, Dr. Andrick Payén, an analyst with Rabobank, presented a wide panorama of the state of the global poultry industry and what can be expected, considering the current challenges of the market circumstances and the changes in the economy and political climate. He spoke Feb. 11, 2019, at the event in Atlanta presented by the U.S. Poultry and Egg Association and WATT Global Media.

In general, the perspective looking toward 2027 is one of constant growth toward a production of more than 140 million tons. Nevertheless, upon separately analyzing all animal proteins, stronger variations can be seen. At a regional level, Latin America maintains growing production as well as consumption.

There are three factors which can have an impact on the outlook for poultry production: the strengthening global economy, international commerce and biosecurity.

At a global level, economies are decelerating along with consumer confidence, but that’s actually good news for chicken consumption. The United States presents a market with record production of protein, but with the application of trade barriers from other countries, it’s looking for new export markets.

Brazil maintains its position in poultry exportation but its situation, which is complicated, is correlated with the production of soy and corn as well as the state of its neighboring country Argentina. That country has been dealing with the impacts of the current prices of commodities. Nevertheless, it's accommodating to the exportation of finished products. Facing the close of markets for Brazilian chicken, producers are looking for other export markets such as Mexico and Asian countries.

The situation with the trade war between China and the U.S. – currently under a tenuous truce – is pressuring other markets. Moreover, the presence of African swine fever (ASF) is further complicating the outlook.

Payén also spoke about the factors like urbanization, which are bringing new challenges along with innovation and opportunities: The growth of the middle class, and its new class of consumers; new channels of communication and new forms of marketing products to consumers.

Finally, speaking of the long term, Payén said the outlook for production is favorable and demand for poultry will continue to grow. In the short term, volatility and trade wars will distort the outlook and change the flow of global commerce. Additionally, ASF will have an indirect impact on other proteins.

The analyst also called attention to how the consumer is in the process of changing, and the poultry producer will need to change too in order to suit their tastes and should use technology to their favor.

Video: Exporting guidance for US poultry companies

Susan Kintanar of the Export-Import Bank of the U.S. Government, explains how the government can help U.S. poultry companies discover new markets for chicken exports at the 2019 International Production & Processing Expo.

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