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Rabobank: US crop conditions determine poultry outlook

Rabobank has published a new Q3 report looking at the challenges facing the global poultry industry as a consequence of the recent, dramatic run-up in feed input costs due primarily to deteriorating crop conditions in the United States.

The low stock levels in global grain and oilseed markets render these markets very sensitive for short term changes in supply and demand.

The report, authored by Rabobank's Food & Agribusiness Research and Advisory group, says that poultry industries all over the world are now facing margin pressures, and only a few regions can escape this new challenging situation.

Russian suppliers are now partly being compensated by subsidies, and the US industry is reaping the benefits of recent production cut-backs, which have greatly improved US market balance and should give the industry more power to pass on higher costs to customers. Still, the report says, poultry companies in all regions are facing shrinking margins despite relatively high beef and pork prices.

Rabobank outlines the key elements that will enable the global poultry industry to deal with current market dynamics; adequate industry discipline, efficiency, market power and risk management.
Rabobank concludes in its report that these elements are proven to be the key ingredients for the poultry industry to escape the volatile environment of high input costs.

Source: Rabobank

Editor WorldPoultry

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