According to RaboBank’s Q4 Poultry Quarterly, a new wave of avian influenza (AI) outbreaks has begun to challenge the outlook for the global poultry industry in 2017, showcasing an unwelcome development in a global market that was just recovering from the negative impact of the 2015 AI crisis.

New outbreaks—just at the beginning of the Northern Hemisphere winter season, when risk is usually high—certainly have the potential to shake up global market conditions in 2017—both in meat trade and breeding stock trade. This adverse development comes at the same time the industry has started reporting better results, and given the favourable fundamentals. The industry currently has strong market balances in most regions and ongoing low costs, despite pressure from declining red meat prices.

The virus’ return has begun to impact global trade conditions, especially when considering the outlook for Asia, Europe and Africa. It will also be a test for the U.S. industry, after last year’s multiple AI outbreaks. Also, the rise of chicken concepts has begun to differentiate the chicken market and shift supply and trade conditions.

Global market conditions will continue to be affected by the ongoing Chinese supply shortage, as imports to China and Hong Kong are expected to remain high. Pressured global trade volumes are also expected next year, given a continuation of high AI impacts and increasing trade protectionism.

China’s import demand and the possibility of improved relations between the U.S. and Russia are promising, but lower support for TTIP and TPP will have adverse impacts.