News update:Mar 9, 2016

EU poultry production set to grow further

EU poultry production is forecast to expand further over the next two years, following a strong 2014, as economic growth continues, unemployment falls and production costs remain under control.

Assessing the market in its latest Short Term Outlook report, the EU Commission highlighted the "exceptional" growth in output in 2014. Spain, Poland and Germany led the way, with production up 10%, 9% and 4% respectively, driven on by lower feed prices.

UK and French output was more static, it added, with the latter held back by the financial difficulties faced by two of the country's larger operators. Overall, poultry production grew by 3.7% in the EU last year to reach 13.2m tonnes.

Slower pace than in 2014

"Provided that feed prices continue to be favourable in view of good abilities, and avian flu outbreaks are kept under control, the solid demand is foreseen to allow production to grow, though at a slower pace than in 2014," said the report. It anticipates 2.3% growth over two years, taking production to 13.6m tonnes in 2016.

US and Brazil offering stiff competition

In terms of trade, the commission says EU exports performed "remarkably" in 2014, up 4% to a record 1.35m tonnes, despite the problems of a Russian import ban, South African anti-dumping measures and avian influenza. This export pace could drop over the next two years, with the US and Brazil offering stiffer competition. On the currency markets, the Brazilian real is expected to weaken against the US dollar, making it more difficult for the EU to compete in world markets. Imports are also set to increase, as Thailand and Ukraine make more use of their tariff rate quotas.

Growing stocks of feed grains and reduced oil prices

But overall the prospects are positive for EU poultry, with growing stocks of feed grains and reduced oil prices aiding the cost of production, while sustained economic growth in Europe and the wider global economy should benefit demand.

Source: Farmers Weekly

Philip Clarke

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