A new report from Dutch bank Rabobank says avian flu and trade restrictions are set to have some major impacts on the poultry industry worldwide. This company news release says regions affected by avian flu outbreaks, such as Europe and Canada, will suffer from lost export markets, affecting local prices. But non-affected areas, such as the U.S. and Brazil could pick up some export market share.
“A key concern for the coming months is the spread of avian flu, which has become a global issue in recent months. Several avian flu strains are already endemic in several parts of Asia and Mexico, and the disease is increasingly spreading globally via wild birds,” explained Rabobank´s Nan-Dirk Mulder.
Avian flu virus pressure will become a global issue for the industry after new high pathogenic avian flu outbreaks in the EU, Canada, India and Egypt add to existing cases in East Asia and Mexico. Affected regions will therefore continue to suffer from economic damage and temporary lost export markets with lower local prices especially for dark meat. In the longer term, industries need to prepare for ongoing disease pressure, especially in times of bird migration. This will require higher levels of biosecurity and reconsideration of existing business models.
Trade restrictions, namely Russia’s import ban on US and EU poultry meat, will lead to ongoing record high prices and margins in Russia. The outbreaks of avian flu in Northwest Europe have been a big wake-up call for the Russian industry as markets have been highly affected by import restrictions on day old-chicks and hatching eggs as Russia depends on 15% of total hatching egg supply on imports mainly from these countries. Although Russia is now re-opening imports of hatching eggs and day-old chicks from non-affected regions in these countries, a future supply risk for Russia will remain and any outbreak in Northwest Europe can affect future market conditions significantly especially if this happens in the Netherlands.
Overall, the poultry industry is expected to benefit from strong markets and low feed prices.