Washington Report

Broiler production this year in important poultry countries is estimated to be 85,292,000 metric tons, 1.4 percent higher than the 84,073,000 tons in 2013, but 1,690,000 tons below its previous estimate in November 2013, according to the Livestock and Poultry: World Markets and Trade report this month from USDA’s Foreign Agricultural Service. If production does reach 85,292,000 tons it would set another record level. The United States continues to be the world’s largest broiler producer with an estimated 17,276,000 tons this year and 20.3 percent of the global total. Other major producers are China with 12,700,000 tons, 4.9 percent under the 13,350,000 tons produced in 2013 (14.9 percent of world production in 2014) and Brazil with 12,678,000, 3.0 percent above the 12,308,000 tons in 2013 (14.9 percent of world production in 2014).

World broiler exports for 2014 are estimated to be a record 10,743,000 tons in 2014. FAS trimmed its 2014 broiler export estimate only slightly from its previous expectation in November 2013. Brazil will likely again be the leading world broiler exporter with 3,600,000 tons this year, up 3.4 percent from the 3,482,000 tons last year. The United States follows Brazil with 3,413,000 tons estimated for 2014, 2.2 percent higher than the 3,340,000 tons in 2013. The European Union may see its broiler exports slip to 1,070,000 tons this year, 1.2 percent under the 1,083,000 tons last year.

Note: Chicken paws are excluded.

In its report FAS noted the following highlights and comments:

• Global broiler meat production is still a record, but revised downward from FAS’ November forecast by 1.7 million tons to 85.3 million due to declines, when the April report is measured against the previous report in November, in China, Brazil, Russia and the United States.

•  Global trade is virtually unchanged, when the latest report is compared with the November 2013 report, as exports are forecast at 10.7 million tons as reductions in Brazil and the EU are offset by increases in Turkey, Ukraine, and China.

• Avian influenza (AI) in China has reduced the production forecast 1.0 million tons to 12.7 million. The disease has weakened demand and encouraged consumers to substitute red meat and fish for poultry, resulting in financial loss for the industry. However, the disruption in live bird sales and reduced consumer demand for wet-market product may bolster supermarket purchases.

• Brazilian production is down 342,000 tons when compared with the November estimate to 12.7 million tons on lower than expected domestic and foreign demand.  Domestic consumption is dampened by economic uncertainty, rising inflation and greater competition from beef and pork. Russia is 200,000 tons lower (April estimate versus November estimate) to 3.1 million as expansion is constrained by high indebtedness and market saturation.

•  The Middle East remains the world’s largest regional importer and represents the largest gain in imports at 65,000 tons. Greater demand is expected to bolster imports by Saudi Arabia, up 35,000 tons to a record 860,000 tons. Iraq is also forecast at a record level, up 30,000 tons to 730,000 tons.

• Turkey’s exports are 40,000 tons higher than the previous estimate at a record 480,000 tons on greater demand from the Middle East, at the expense of Brazil, the EU, and the United States. The main priority of the industry is foreign markets as domestic demand continues to decline.

• Brazil’s exports are reduced to 25,000 tons (April versus November estimates) to 3.6 million on lower than expected demand in Sub-Saharan Africa and greater competition in the Middle East. Despite a depreciating Real, constraints such as antidumping tariffs in South Africa continue to limit exports. EU exports are estimated to be 1.1 million tons this year with the cessation of export restitutions in addition to the decline in the whole-bird exports to the Middle East.

• India’s broiler consumption will likely be a record 3,720,000 million tons on greater domestic demand and increased feed availability. The industry is thriving with improved margins as a result of relatively low corn prices and stable poultry prices. The EU’s  consumption of broilers will reach 9,580,000 million tons as the economic slowdown encourages consumption of more price-competitive and convenient broiler meat. Higher production in Benelux, Germany, the United Kingdom, and Romania is expected to offset declines if France and Spain.

• Mexico’s broiler production in 2014 is virtually unchanged from 2013 but will be a record 3,060,000 million tons.

The complete report can be viewed here.