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Report suggests brighter outlook for poultry in 2012

Poultry producers face a positive outlook in 2012, according to international analysts at Rabobank, with margins expected to improve for both farmers and processors.

However, with fragile market conditions persisting in the wider economy, experts say supply discipline will be required to aid the EU meat industry's performance.

According to the Rabobank report, "swing factors" such as feed prices, the economy, export markets and exchange rates could easily shift and create uncertainty in 2012. "Predictions show the industry will yet again experience major challenges in the year ahead," the researchers said. "More disciplined supply growth will make the industry more flexible in times of unfavourable cost-price developments."

Reduction in supply last year has restored the market balance, they added, resulting in better prices and margins, and projections for this year are positive. Low production in the red meat sector also means beef prices are expected to remain high, which will support prices for poultry - the main competing meat.

Unlike other mea-producing sectors, a downturn in the economic conditions within the EU is likely to benefit the poultry industry as consumers trade down and poultry consumption is expected to increase between 0.7% and 1.5%.Rabobank also predicts the sector will benefit from increased demand in world markets, with the main growth areas being Hong Kong, Africa and Middle Eastern countries.

The tight supply of global meat markets is expected to lead to a 5-7% increase of poultry export volumes, albeit at a slower pace than 2010/11. Pork and beef exports are expected to decline due to lower production levels. But volatile exchange rates could impact on trade in 2012, depending on economic developments within the EU, Rabobank has warned.

Economic developments also remain a key swing factor for grain and oilseed prices, with a possible downturn affecting the demand for grain and fuel. Although the outlook for these markets remains fragile, predictions indicate a slight decline in prices. This is particularly positive for the poultry industry, with research showing feed costs account for 50-70% of total production costs.

Overall Rabobank predicts EU poultry production will rise by 1.2% this year to support demand growth and export potential. "In the poultry sector, the integrated structure and opportunities to easily adjust production will support 2012 margins."

Source: FWi

Editor WorldPoultry

3 comments

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    OLULEYE B. JAMES

    It is good to read about cracked maize in feeding Broilers, it is an old practice to feed native chickens with whole maize or cracked in Negeria, with good result. In modern poultry, it is welcome idea, getting the correct particle size is the main thing for different ages of Broilers.This should be measured in terms of weight gain, FCR among other parameters.

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    Tarusenga Munyanyi

    the report sound good but considering what is happening on the international markerts most of the economies are struggling due to liquidity crunch which means the consumption of meat especially poultry will be down due to poor salaries and most employees will not increase the wages to keep afloat. This will also cause price increase on feed especially soya and maize leading to high cost of producing a kg of chicken . heating will go up as evidenced by the increase of oil on the global market making developing countries not to meet the production quotas required by their consumers . In conclusion I can say there will be poor response of poultry production and consumption of poultry products.

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    poultry farmers welfare association

    Only demand supply ratio can determine the future of growth in any field.The producers has to decide the quantity of chicken supplied to market on need basis not on pumping more than the need to increase there share in the market. Most of the integrator wants to catch major part of market for all the time,with out pre calculation , which leads to prices low down.This will make impact directly not only on the producers but also on farmers in the field.

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