Global Trade Growth Projection for 2012 Still at 4 Per Cent27 July 2012
GLOBAL - The global poultry industry is currently challenged by increasing feed costs as a consequence of the recent and dramatic run-up in feed input costs due primarily to deteriorating crop conditions in the United States (US). The low stock levels in global grain and oilseed markets render these markets very sensitive for short term changes in supply and demand.
Poultry industries all over the world are now facing pressure on margins (see Figure 1). 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. Companies in all regions are facing shrinking margins despite relatively high beef and pork prices
Key elements for the global poultry industry to deal with current market dynamics are 1) adequate industry discipline, 2) efficiency and 3) market power, and 4) risk management. It has been proven that these elements are the key ingredients for escaping the volatile environment of high input costs.
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