June 1, 2015
Persistent bird flu crisis takes on global face-Rabobank report
The deadly H5N2 bird-flu virus stalking poultry farms mostly in the US Midwest continues to make a dent on the international markets and is likely to do so for the remainder of the year, according to the latest poultry report of the agricultural lender Rabobank.
The bank''s poultry report for the second quarter of 2015 said avian flu has become a global case, having had a big impact on the international markets.
The global trade streams and prices are expected to remain under pressure for the rest of 2015, the report stated, adding that the long-term impact may be significant due to several trade bans on breeding stock in importing countries.
As the
bird-flu crisis has put on a global face, it will require global approaches to deal with it, Rabobank said, adding that strict biosecurity standards and adjusted industry business models must be used to deal with the new market reality.
Several countries in Asia, including China, that have implemented restrictions on trade on breeding stock might be affected by the low supply next year due to expected future shortages in local breeding value chains, the report said.
Headwinds
Rabobank also said it expects prices of poultry products to remain under further pressure in the next months.
"Poultry industry fundamentals are facing meaningful headwinds with stronger than expected feed prices due to a strong US dollar, increased competition from falling
pork prices and restrictions on trade", said Rabobank animal protein analyst Nan-Dirk Mulder. "Prices for whole chicken, leg quarters and chicken feet are declining further, while breast meat prices remain relatively strong."
Avian flu-affected states
According to the US Department of Agriculture, highly pathogenic avian influenza cases in wild birds, captive wild birds, backyard poultry or commercial poultry have been reported in 19 states since the first outbreak was reported in December 2014. These are Arkansas, California, Indiana, Iowa, Idaho, Kansas, Kentucky, Minnesota, Missouri, Montana, Nebraska, North Dakota, Nevada, Oregon, Utah, South Dakota, Washington, Wisconsin and Wyoming.
Affected birds has reached 26 million as of early May.
Vietnam, Mexico, Japan, Canada, South Korea, Thailand, Russia and Angola have banned poultry imports from the entire US, while at least 40 other countries or regions have banned poultry imports only from affected states. Still others like Honduras,
Kazakhstan and Qatar require products to be heated to a temperature that will kill the virus.
Outlooks in other countries
Following are a quick look on outlooks for the poultry industry in selected countries, according to Rabobank:
* EU: Slight margin recovery. Improved trade position due to weak euro and possible lifting of avian flu-related trade restrictions.
* US: Wave of HPAI outbreaks, but broiler sector less impacted. Margins still strong on robust local market demand.
* Brazil: Competitive position in global trade. Weak real and avian flu bans for competitors.
* Russia: Less bullish market, with ongoing higher feed costs and removal wheat export tax.
* China: Fewer avian flu cases, but still big impact. Margins to lowest level in five years.
* Thailand: Oversupply despite strong exports
* South Africa: Improved margins, but outlook more clouded on likely return of EU exporters
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