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Poultry Meat and Products
World poultry meat production continues to increase supported by generally low feed grain prices in the major producing countries. Some recovery in the Asian economies has helped demand for poultry products, but prices remain weak since the Russian market, previously the world’s largest import market, has still not recovered.
OVERVIEW
World poultry meat production is estimated to increase by 4 percent in 1999 with a further 3 percent increase in 2000. The United States remains the world’s largest producer and exporter of poultry meat. U.S. poultry meat exports continue to suffer from the near total collapse of the Russian commercial import market. Following the August 1998 devaluation of the ruble, exports to Russian during the first eight months of 1999 were more than 80 percent below the level for the same period in 1998. However, total U.S. poultry exports to date are only trailing last year’s volumes by 12 percent, mainly due to a resurgence in the Asian markets of Hong Kong, China and Korea, and stronger exports to the Baltic countries.
WESTERN HEMISPHERE
The United States is expected to increase its poultry production by about 5 percent in both 1999 and 2000 as feed prices remain low and domestic demand continues to climb by 5 to 7 percent annually. Exports are expected to decline 3 percent in 1999, mainly due to the collapse of the Russian market for poultry. This will be offset somewhat by the strengthening in the Asian economies and better market prospects there. Exports are forecast to increase 2 percent in 2000 as Asia is expected to continue its economic recovery. U.S. egg exports are forecast to increase by 5 percent in 2000 as increased production and low prices make U.S. product more competitive.
Canadian poultry meat production is estimated to exceed 1 million tons for the first time in 1999, an increase of over 4 percent, as the broiler sector continues to expand. Poultry imports are forecast to remain flat in the face of rising domestic production and declining export prospects for the higher priced Canadian product.
Poultry production in Mexico is estimated to continue to grow by 6 percent in 1999 due to good consumer demand for this relatively inexpensive protein source. Imports also continue to increase to help fill demand. However, production growth is forecast to slow to only 3 percent in 2000 since it has been outpacing population growth and prices are expected to soften. Imports are forecast to continue to increase, particularly of mechanically deboned meat which is used for further processing.
The devaluation of Brazil’s currency in January has led to a significant recovery in poultry production, with output increasing nearly 11 percent in 1999 and forecast to increase a further 5 percent in 2000. This also led to a boom in exports, forecast to expand 15 percent in both 1999 and 2000, with the largest growth in exports to Asia and Europe. Poultry consumption in Brazil continues to increase, particularly among the lower income groups that can not afford to buy beef. Domestic egg production and consumption are also forecast to increase 7 percent in 1999 and 5 percent in 2000.
Argentina’s poultry meat production is forecast to decrease 4 percent in 2000 as competition with lower priced beef has reduced the profitability of poultry operations. Imports are expected to remain relatively unchanged, with a resulting decline in poultry consumption reflecting a shift back to beef.
EUROPE, MIDDLE EAST, AND AFRICA
Due to sluggish domestic demand, and increased competition from abroad, France’s poultry production is expected to decrease in 1999 and again in 2000. France remains the largest poultry producer in the European Union, and more than 40 percent of French production is normally exported, but mainly to other EU countries. Exports to non-EU countries are forecast to decrease by 7 and 10 percent in 1999 and 2000, due to larger world supplies and increased competition, mainly from Brazil. France also imports deboned poultry meat from non-EU countries, mainly Hungary and Thailand.
Saudi Arabia continues to increase poultry production at about 2 percent per year. Production costs are very high, but are offset by various government subsidy programs. With poultry consumption relatively flat, imports are expected to drop. Brazil and France are the major suppliers of poultry to Saudi Arabia, with the United States a distant third.
Poultry production in Turkey is expected to increase almost 10 percent in both 1999 and 2000 mainly in response to growing demand. The broiler sector continues to modernize and reduce its mortality rates which should lead to better profitability. Consumption has been increasing in line with production, and Turkey is also expected raise its exports as it finds markets in neighboring countries.
South Africa continues to increase its poultry production at a rapid rate, with production up 10 percent in 1999 following a 22 percent increase in production in 1998. Producer and retail prices have, however, been disappointing, and imports have been blamed for the depressed price levels. However, imports continue to decline since import duties were raised in September 1997, particularly on leg quarters. Domestic poultry production is also faced with high grain prices and cost of production problems and is forecast to only grow 3 percent in 2000.
ASIA
Thailand’s domestic poultry meat production is forecast to continue to increase due to profit-driven expansion and increased domestic sales. Meanwhile, domestic consumption is expected to recover as the Thai economic situation improves. Poultry meat exports are forecast to remain flat in 1999, due to strong competition from Brazil and increases in Chinese poultry production and exports. However, exports are forecast to increase slightly in 2000 due to expected economic recovery in Japan and Europe.
Domestic poultry meat production and consumption in China are forecast to increase 2 percent in both 1999 and 2000. China has emerged as one of the world’s largest poultry meat import markets, with nearly two-thirds of total imports entering as transshipments from Hong Kong. China’s poultry meat imports are forecast to increase 6 percent in 1999 and 2 percent to 870,000 tons in 2000. Benefitting from close proximity to other Asian markets, China’s poultry meat exports are also growing rapidly and are forecast to reach 410,000 tons in 2000.
Hong Kong relies heavily on imports to meet poultry meat consumption needs, as domestic production accounts for less than 20 percent of total consumption. Hong Kong’s poultry meat imports are forecast to increase more than 25 percent in 1999 and 10 percent in 2000 to reach 1.26 million tons. Hong Kong is once again the leading market for U.S. poultry, due to the dramatic decline in the Russian market. Hong Kong’s poultry meat exports are forecast to jump 35 percent in 1999 and increase 13 percent in 2000, mainly due to booming transshipments to China.
Japan’s domestic poultry meat production continues to decline slowly while consumption remains stable. Poultry meat imports are forecast to increase 7 percent in 1999, due to tightened domestic broiler meat supply, moderate recovery in retail consumption, and solid leg meat demand for the home-meal replacement demand. Imports are forecast to increase slightly in 2000.
Economic recovery in Korea is fueling greater demand for domestic and imported poultry products. After bottoming in 1998, Korea’s domestic poultry meat production is forecast to increase 4 percent in 1999 and 3 percent in 2000 to 455,000 tons. Poultry meat imports are forecast to more than double to 49,000 tons in 1999 and increase another 16 percent in 2000. Poultry meat consumption is also expected to recover, as consumption increases 10 percent in 1999 and 5 percent in 2000.
Indonesia and India have been added to the poultry section, and their complete annual reports are available on the FAS homepage. India’s domestic poultry meat production is forecast to increase slightly in 1999 and 2000 in response to lower feed costs. India does not import or export poultry meat, but has become a significant exporter of eggs and egg products, mainly to markets in the Middle East and Europe . Indonesia’s domestic poultry meat production is forecast to make a strong recovery in 1999 and 2000, fueled by the strengthening currency, low inflation, an improved security situation, and increased profit margins. Egg production and consumption are also rebounding.
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