Broiler Meat: 2013 Forecast overview Oct. 24, 2012
Record World Broiler Production Constrained by Rising Production Costs
Global production is forecast up 1 percent to a record 83.5 million tons. Demand for animal protein particularly in China, Brazil and India continues to stimulate global poultry production as a highly competitively priced option. Higher feed costs over the past few years have eroded profit margins, as larger producers have consolidated for cost-savings synergies and to help maintain margins.
China, India and Brazil Boost World Expansion
Rising incomes, an expanding middle class and stronger demand for animal protein have propelled production in China, India and Brazil. Combined, these countries represent 85 percent of the forecasted growth in global production for 2013.
China is forecast to increase 3 percent to 14.1 million tons as consumer demand for meat protein continues to grow. However, higher feed prices are expected to dampen the rate of growth despite producers’ attempts to shift to lower-priced feed.
Brazil is forecast to rise 2 percent to 13.0 million tons. Production is supported by improved demand and abundant feed supplies. Government support may also mitigate the full impact of rising feed costs.
India is forecast to increase 8 percent higher to 3.4 million tons. Despite the past years’ outbreaks of avian influenza, production is expanding rapidly on rising domestic consumption, changing culturally driven tastes and preferences, and ample domestic feed supplies.
Russia is forecast to increase 4 percent to 2.9 million tons as larger, modern facilities come into full operation. Government programs are aimed at mitigating rising feed costs and supporting the construction of new poultry farms.
The EU is forecast to rise 1 percent to 9.6 million tons as consumers substitute poultry for red meat.
Production is expected to increase in all major EU producing countries, except France, where the industry is restructuring following the bankruptcy of the Doux poultry company, the largest exporter of broiler meat in the EU.
Argentina and Turkey are forecast up 4 and 1 percent to 2.0 and 1.7 million tons, respectively.
Production is supported by greater domestic and foreign market demand. Argentina continues to expand production with government credit, ample supplies of feed grains and a more vertically integrated and efficient sector. Turkey production is higher to meet ever-increasing regional Middle East demand, as well as to offset short domestic supplies of red meat.
The United States, the world’s largest broiler meat producer, is forecast to decline 1 percent to 16.3 million tons on tighter margins due to higher feed costs. Thailand is forecast to reduce output 6 percent to 1.5 million tons after last year’s supply glut and this year’s higher production costs, reversing the recent growth trend.
Global exports are forecast 2 percent higher to a record 10.1 million tons, primarily on East Asian and Sub-Saharan African demand. Traditional suppliers (Brazil, the United States and EU) will continue to dominate the world market, while smaller suppliers (Thailand, Turkey, and Argentina) expand their market share in new and developing markets.
Brazil, the leading exporter, is forecast to rise by 3 percent to 3.6 million tons driven by East Asia (China and Hong Kong) and the Middle East (Iraq and Egypt). Gains to the Middle East are supported by their ability to ship whole bird and halal-certified product provides comparative advantages.
The EU is up 4 percent to 1.1 million tons as more exports to Western and Southern African markets are expected to offset less to Saudi Arabia, Hong Kong and China.
Thailand is forecast to rise by 7 percent to 580,000 tons based on the reopening of the EU market for fresh broiler meat. Additional growth is expected in Southeast Asia, South Korea and the United Arab Emirates.
Argentina and Turkey are forecast to boost exports by 10 and 4 percent to 285,000 and 260,000 tons, respectively. Both countries are expected to expand in emerging markets in the Middle East. Turkey continues to direct most shipments to Iraq, eroding U.S. and Brazilian market shares. Large investments in expanding export capacity will improve competiveness in shipping to developing markets such as Libya.