What lies ahead for the major poultry-producing countries in 2015?

Late last year, Rabobank published its last Poultry Quarterly of 2014, offering its view of how the market will develop over the year ahead.

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Late last year, Rabobank published its last Poultry Quarterly of 2014, offering its view of how the market will develop over the year ahead. Rabobank believes that, worldwide, global margins will remain bullish, trade prices will remain stable, and pressure from avian influenza will become a global issue. The main winner as 2015 progresses will be Brazil.


In Argentina, Rabobank says, lower feed costs are expected to compensate for other rising domestic costs, such as labor and energy, this year, and production should show a stronger performance as a result.

Additionally, domestic demand for poultry in the country is likely to improve, as beef prices started to rise toward the end of 2014, and consumers will look for an alternative protein source.

In terms of exports, although the industry is making visits to China to certify more plants for export, the real change in the country’s export performance will come when, and if, there is a currency devaluation. This is expected to happen during the first quarter of the year.


2015 is forecast to be “dynamic” for Brazil.  This dynamism will come as a result of the reduction in feed costs, due to greater availability in grains on the domestic market, and a consequential drop in corn and soymeal prices. Rabobank expects that Brazil’s domestic production will grow by 3 percent in 2015, therefore, export performance will also be crucial to the development of the sector.

Trade opportunities, allied to the likely devaluation of the Brazilian real against the U.S. dollar, should favor Brazilian exports. Increased exports to Russia will probably represent an additional 150,000 tons in annual exports. However, the expected redirection U.S. exports may bring higher competition in other important export markets for Brazil.

On the home market, projected high prices for beef could encourage increased chicken consumption. However, the weak economic growth anticipated for the country in 2015 will not sustain strong expansion rates. Domestic poultry consumption is forecast to grow by about 2.5 percent, with faster growth rates for processed and ready-to-eat products. This will encourage the industry toward investments in industrial chicken processing plants.

The risks faced by the Brazilian industry in 2015 seem quite low, given lower feed costs and the expectation of further growth in exports, Rabobank says, which should create a positive scenario.


As 2014 drew to a close, outbreaks of avian influenza again became the center of attention in China, affecting not only birds but people, and many, although not all, live bird markets were closed.

China is likely to see a tight supply of parent stock this year, meaning that the price of DOCs is likely to rise, after the fall experienced toward the end of 2014.

The price of pork is expected to rise during the early months of 2015 and, given that poultry is the main substitute for pork in China, this will have an effect on poultry prices. Poultry prices should follow pork prices upward, assuming there is no setback due to further disease outbreaks.

European Union

In late 2014, the Northwest European industry was hit by a wave of H5N8 avian influenza outbreaks on commercial farms. These outbreaks, and how they may develop, make forecasting for 2015 difficult.

Rabobank believes, however, that they could lead to downward pressure on dark meat prices, as the Netherlands, Germany and the U.K. – the three countries hit by avian influenza – are by far the biggest exporters of dark meat.

This will also put downward pressure on EU broiler prices, particularly in directly affected countries. They account for almost 40 percent of the market in intra-EU trade. Any reduction in the Dutch supply will have an impact on prices.


2014 ended with the best profitability in years for India’s poultry producers, and improved demand and lower feed costs hold promising prospects for the industry in the near term. Price points for the broiler and feed commodities industries look set to achieve 8 percent growth in 2015.

However, in October last year, the World Trade Organization ruled that the Indian ban on imports of U.S. chicken was not justified and that it violated trade rules. The Indian industry is worried by the adverse impact that imports of U.S. chicken legs could have on the local market, and India is likely to appeal against the ruling.


The outlook for the Japanese poultry industry is bullish, Rabobank believes. All major fundamentals – a low yen, limited production growth, high competing meat prices and low stock levels – indicate strong margins over the first half of 2015.

Japan’s ongoing weak yen has made imports more expensive, so supporting local broiler prices, but it especially supports prices for competing meats.

Broiler production in Japan has been running at maximum capacity, yet the industry remains reluctant to increase output. Expectations are that the industry will expand by only 1 percent in this year. Imports will be stable, possibly even growing slightly, with a further shift from raw to processed poultry, similar to 2014.


In 2015, if avian influenza is brought under control, Mexico’s poultry production is expected to expand by around 3 percent. Poultry meat is becoming an important alternative for Mexico’s consumers, as pork and beef prices remain high. Per capita consumption, including paste, is expected to reach at least 30.9 kg, and could rise to 32 kg, Rabobank believes.

Prices are expected to be relatively high in the country compared with last year, and the industry will be profitable, supported by the high cost of alternative proteins.


The outlook for the Russian industry remains very bullish, as long as the ban on U.S. and EU imports continues.

Further production expansion could provide some relief to the lack of availability of poultry meat in the country, but the current key concerns are the highly pathogenic avian influenza outbreaks in Europe and the associated import ban on live poultry from the Netherlands, which was not included in the August 2014 ban.

Dutch traders provide approximately 7-8 percent of all hatching eggs in Russia, and it has been difficult to replace these volumes in the current tight global market for hatching eggs. This challenging situation has forced Russia’s authorities to reopen imports from non-affected countries.

South Africa

The 2015 outlook for South Africa’s poultry industry is for an improvement on 2014, with ongoing low feed prices and very limited supply growth.

The market should achieve better balance, especially as South Africa has recently banned imports from the Netherlands, Germany and the U.K. because of local avian influenza outbreaks. These countries supply 60-65 percent of South Africa’s total chicken imports. The local industry should also continue to benefit from lower capacity, after financial distress saw some players acquired by competitors.


Thailand’s outlook for 2015 is optimistic, but any growth must be measured if margins are not to be disappointing, Rabobank believes.

The main drivers for this optimistic market outlook are the ban on U.S. and EU exports by Russia, which will refocus Brazilian exports from Japan to Russia due to very high Russian prices. This will present Thailand with opportunities to supply deboned leg meat to Japan, as well as more processed meat. Thailand’s poultry meat exports could well rise by 6 percent this year to 560,000 tons.


The U.S. poultry industry is forecast to grow by 4 percent in 2015. Prices are expected to experience a slight decline, but the outlook for profitability remains favorable as feed costs decline and supplies of competing proteins remain tight.

Beef production is expected to decline by 3.2 percent this year, which will help to support chicken breast prices. Soymeal prices are expected to decline significantly over first months of the year, as the record U.S. soybean crop boosts feed supplies.


  • Key production areas hit by avian influenza
  • Non-affected regions to face improved pricing
  • Hatching egg market to tighten



  • EU/US import ban to lead to record high prices/margins
  • Sharp contraction in import volumes
  • Hatching egg shortage



  • Highest margin level in a decade
  • Mexico to absorb exports diverted from Russia
  • High beef prices offer further support


Rest of World

  • Strong outlook for India, Japan
  • Thailand to gain from Russia’s EU/US ban
  • South Africa and Argentina weak


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