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USDA International Egg and Poultry


17 December 2014

USDA International Egg and Poultry 16 December 2014USDA International Egg and Poultry 16 December 2014


USDA International Egg and Poultry

Canada

Canada’s broiler meat production for 2014 is estimated to be 1,078,000 metric tons (MT), a 2.5% increase over 2013. For 2015 broiler meat production in Canada is forecast to grow 2% to 1,100,000 MT. Per capita broiler meat consumption in Canada for 2014 is estimated to be 30.2 kilo grams (kg), slightly above 2013’s 30.1 kg. Even though 2015 per capita broiler meat consumption is forecast to increase slightly to 30.4 kg, it will still be below the 2007 peak of 31.7 kg. The Canadian broiler meat market is affected primarily by population increases due to the market’s maturity.

However, due partly to Canada’s 39% growth in population from 1980 to 2010 the country’s total domestic chicken consumption has almost doubled in the past 30 years. Canadian consumers have been shifting towards chicken due to an increase in health awareness and chicken is perceived to be leaner and healthier than other meats. Also, the proliferation of fast foods focusing on offering a variety of chicken meals has helped increase consumption. In the past, due to the supply management system, chicken meat prices had usually been higher than pork and beef cuts because they are not under supply management schemes. However, over the past year and into 2015 red meat prices are likely to exceed poultry prices making a chicken more attractive price-wise as well.

Under Canada’s supply management system chicken producers receive a fixed price for their live birds. The price is determined every 8-week production cycle based on production costs. Since Ontario is Canada’s largest chicken producing province its live bird prices are the basis for calculation of prices in other provinces. Production volume decisions are also made before every 8-week production cycle. The national volume is allocated to each of the 10 producing provinces and further on down to the individual producers. Canadian broiler meat imports for 2014 are estimated to increase 5% to 150,000 MT and are forecast to grow 3% in 2015. Imports are controlled under the supply management system and subject to a tariff rate quota. Market conditions in the United States (U.S.) also can impact import decisions. A large price differential between lower U.S. prices and the higher Canadian broiler meat prices can lead importers to bring in more product from the U.S., especially under programs that provide customs duty exemptions, such as IREP (imports for re-export program) or DRP (duties relief program).

 

Canada imports most of their broiler meat from the U.S. The U.S. market share in 2014 is close to 90% followed by Brazil and Thailand. Some Canadian importers are reluctant to import the lower cost Brazilian chicken because it cannot be re-exported to the U.S. The U.S. does not permit Brazilian chicken imports. Canada’s broiler meat exports for 2014 are estimated at 145,000 MT, a 3% drop from 2013. However, Canada’s broiler meat exports in 2015 are forecast to rebound and increase 7%. Exports generally fall into 2 broad categories with the majority representing the “re-export” side of the IREP and DRP programs, while the rest reflect “genuine” exports.

“Genuine” exports are mostly made of dark meat cuts since the Canadian domestic market currently shows a stronger preference for white meat. The U.S. is the number 1 destination for Canada’s broiler meat exports with Taiwan a distant second. However, over the last several years Taiwan has over taken the Philippines as it increasingly bought more broiler meat increasing its market share while volumes to the Philippines generally stayed steady.

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