EU - The EU-28 broiler sector is expected to continue to grow in 2015 and 2016, according to the latest forecasts from the US Department of Agriculture's Foreign Agricultural Service.
The report says the industry should benefit from increased exports, slowly increasing domestic demand and because it is less affected than other meats by the economic downturn in Europe, since it is cheaper and more convenient for consumers.
Overall EU-28 production in 2015 encompasses various situations, but broiler meat production is expected to increase from 2014 in most major EU producing countries, and especially in Poland which is on the verge of becoming the leading EU-28 broiler meat producing country.
In Germany, the report says production will continue to grow but welfare and environmental issues are hampering faster growth in the industry. Production is predicted to remain flat in Spain because of the pressure from the retail industry on producers negatively impacting producer margins.
However, the report cautions that accurate predictions are difficult to obtain due to the short life cycle of broiler production making it extremely reactive to economic changes.
Producers managed to pass on most of their increased costs from grain price hikes in 2012 to customers. However, the significant decline in grain prices since 2014 boosted broiler meat competitiveness and increased operating margins, as retail prices decreased less than grain prices.
This trend of increasing producer margins is predicted to continue in 2015 and 2016.
The EU-28 broiler trade surplus is expected to increase in 2015 and 2016 in light of stagnant imports and surging exports.
Brazil and Thailand remain the largest suppliers of broiler meat to the EU-28. Since 2012, the opening of the EU-28 market to Thai uncooked broiler meat led to a significant increase in exports of Thai salted and frozen broiler cuts and parts to the EU-28 to the detriment of Brazilian exports. It has been reported that the quality of Thai broiler meat better suits EU importer needs.
The signature of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the EU-28 and Ukraine led to a surge of Ukrainian broiler meat exports to the EU-28 which are expected to reach 20,000 MT in 2015.
EU-28 broiler meat exports are expected to increase in 2015 despite the Russian embargo on certain EU food products imposed in August 2014, the increase in import tariffs in South Africa in July 2014, and the decrease in exports of French frozen whole broilers to the Middle-East region, due to the suspension in July 2013 of all EU-28 poultry meat export restitutions.
Exports of low-priced cuts, bone in cuts and mechanically deboned meat (MDM) to Sub-Sahara Africa and Asia (such as Philippines and Malaysia) are booming driven by lower production costs, due to lower world grain prices, increasing EU-28 broiler price competitiveness.
The growth of exports is expected to continue in 2016. While all sources show that total meat consumption in the EU-28 has been negatively impacted by the economic downturn in Europe, poultry meat, which is the cheapest source of protein, was less affected.
Its consumption per capita is stable or slightly increasing. In the EU-28, sales of cheaper broiler cuts also increased faster than sales of more expensive parts, such as breasts or whole birds.
You can view the full report by clicking here.
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