Bird flu and feed costs hit poultry firms in 2015

The market analyst’s Poultry Quarterly Q2 2015 ​report predicted hard times for the rest of the year as new outbreaks of avian flu in Africa, the US, Russia, India and Asia prompted trade restrictions.

A stronger US dollar, relative to the weak euro, driving up poultry feed costs and increased competition from pork as pig meat prices fell would be other core challenges, it said.

Exports​

On the other hand, relatively low EU prices had already boosted exports to non-eurozone countries in the first two months of 2015 despite restrictions, Rabobank said.

“Poultry industry fundamentals are facing meaningful headwinds with stronger than expected feed prices due to a strong US dollar, increased competition from falling pork prices and restrictions on trade,”​ said Rabobank animal protein analyst Nan-Dirk Mulder.

However, he acknowledged: “Prices for whole chicken, leg quarters and chicken feet are declining further, while breast meat prices remain relatively strong.”​

Improved performance​

The EU poultry industry had improved its performance in the first two quarters of this year after a difficult end to 2014, said Rabobank. The main reason for this had been massive cullings at the end of last year after bird flu outbreaks in the UK, Germany, Italy, Hungary and the Netherlands.

In summary, it stated that the outlook in the coming months for the EU poultry industry remained fragile and would depend on the industry’s ability to protect itself against bird flu outbreaks.

Supply looked set to remain tight, but stronger summer demand for poultry meat products, lower feed prices and the likely lifting of export restrictions meant the outlook looked “reasonably promising”​, according to the report.