US poultry market is struggling with oversupply
The American poultry market is struggling with oversupply from record-high broiler and red meat production that has resulted in low domestic prices and high cold storage levels, says Nan-Dirk Mulder, a senior analyst for animal protein at Rabobank.
The outlook for the global poultry industry will gradually improve as the year progresses. The biggest improvements will likely arrive in the second half of 2019, thanks to rising Chinese imports spurred by the impact of African Swine Fever on protein demand in the country. That demand is expected to lead to more poultry imports, especially from the United States, according to Mulder.
In the US, poultry production is likely to slow down in 2019, according to the analysis. Rabobank’s poultry quarterly report says record broiler production at 1.76 million tonnes during October has pushed boneless breast meat prices well past historical lows. Most of the big-bird operations have seen sizeable losses in recent weeks, with the small-bird options faring just slightly better on production that’s down 8% year-over-year.
"Chicken demand remains weak as large supplies of competing proteins, especially pork, make for a very competitive retail marketplace," explained Mulder.
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