September 17, 2014

Global poultry supplies remain tight and prices are expected to remain bullish despite Russia’s recent import ban according to Rabobank’s third quarter poultry report. These tight supplies will provide a foundation for margin improvements as grain prices continue to slide next year.  Margins are expected to increase significantly for Brazil, Russia, and South Africa after South Africa instituted restrictions on global poultry trade.  In China the poultry market is in recover as avian flu concern recede and industry production rates have been reduced.  Also the bullish outlook for pork prices in the country will have a positive effect upon the country’s highly-correlated poultry sector.  The U.S. saw higher breast meat values in the second quarter and is expected to see production increase by 3% in 2015 while the outlook for Brazil is positive on strong exports.  Japan is expected to have a strong second half of 2014 which is turn is supporting a recovery in Thailand’s market.  The one exception is Argentina’s poultry sector which is suffering a downturn as a result of low consumer consumption and national economic slowdown.

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