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Weekly global protein digest: poultry production expected to increase across Asia

Read the latest developments in the poultry meat market from Russia, South Korea and the United States.

11 September 2020, at 8:09am

Update from South Korea

Korea’s 2020 chicken production is expected to increase to 971,000 MT (up two percent from 2019) driven by new slaughter plant openings and carry-over capacity from high 2019 parental stock (PS) broiler inventory. In 2021, chicken production is projected to rise only 0.9 percent as low farm-gate prices and uncertain demand continue to weigh on the industry.

Despite the number of slaughtered chickens increasing by 3.4 percent during the first six months of 2020, chicken consumption has declined overall due to the COVID-19 pandemic. Korea’s 2020 chicken imports are expected to decrease by ten percent to 160,000 MT due to increased frozen domestic chicken inventory and reduced consumption.

In 2021, Korea’s chicken imports are projected to increase by five percent to 168,000 MT due to steady demand for processed chicken products that can be easily consumed at home and the expected extra demand generated during the 2021 Tokyo Olympic games.

Russia poultry highlights

Steady demand for chicken meat and ample feed supplies are expected to lift Russian poultry production to 4.725 metric tons (MT) in 2021, according to USDA data. Exports in 2021 are projected at 220,000 MT with shipments to traditional and recently opened markets expected to grow at a slower rate than the 22 percent growth in 2020 driven by entry into the Chinese market.

A weaker Russian ruble will spur export initiatives but harm margins from domestic sales. In this environment, leading poultry companies are expected to increase their market shares at the expense of smaller players.

The forecast for 2020 production is raised to 4.715 million MТ. One percent growth year-over-year reflects better-then-expected exports, namely to China, and low immediate impact on broiler industry operations from the pandemic-related recession.

As of the date of the report, no COVID-19-related closures of chicken farms and processing plants have been reported. 2021 exports are forecast at 220,000 MT, the growth of shipments to traditional and recently opened markets continue at a smaller pace compared to 22 percent year-over-year growth of exports in 2020, when Russian exporters successfully entered the market capturing the benefit of rising Chinese imports.

Domestic consumption is forecast flat at 4.715 million MT. The segment of population in difficult economic conditions continues to grow in Russia due to COVID-19-related deterioration of disposable incomes. The current economic environment limits opportunities for growth of chicken meat sales. Moreover, competition with pork will intensify, pork prices are falling due to rising domestic supply from the modernised pork industry.

USDA’s national broiler market at a glance

Whole broiler/fryer prices are trending steady for all sizes, USDA said in it latest weekly report. Offerings of all sizes are light to moderate in the central region, mostly moderate in all other regions.

Retail and foodservice demand is light to moderate for current needs. Processing schedules are normal to reduced. Floor stocks are sufficient. Market activity is slow to moderate.

In the parts structure, prices are generally trending steady for wings and tenders, and steady to weak for the remainder of parts. Supplies of wings are moderate to instances light. Breast items and dark meat cuts are moderate to heavy with thighs and thigh meat slow to clear. Market activity for parts is slow to moderate. In production areas, live supplies are moderate to heavy. Weights are mixed, but mostly desirable.

Read Jim Wyckoff's Pig Outlook on The Pig Site and read his analysis of the global cattle market on The Cattle Site.