Case Study: Thai poultry sector enjoying turnaround

28-02-2017 | | |
Case Study: Thai poultry sector enjoying turnaround
Case Study: Thai poultry sector enjoying turnaround

In a turnaround from 2015, the Thai broiler industry has enjoyed reduced production feed costs, favourable growth in exports, and profitable export prices during 2016, according to a recently released market report.

The Thai broiler industry has proved it is able to avoid the potential supply bottlenecks, which could have occurred after the Thai Government imposed an import ban on chicken genetics from the United States. Because of this, Thailand’s chicken meat production and exports are forecasted to grow 5-7% further in 2017, the USDA Gains report states.

Alternative sources for genetics

Thailand managed to switch to genetic supplies from other sources, especially genetics from France, Netherlands, and Denmark. As a result, when combined with the continued increases in exports to all existing markets and prevailing low feed costs, chicken meat production for 2016 is estimated to grow by 5% over the 2015 level.

Reflecting trends in the tourism industry and an anticipated recovery in the Thai economy, domestic consumption of chicken meat should increase by 4-5% in 2017, as compared to 3% in 2016. The appreciation of the Brazilian currency against the US dollar and decreased competition from China helped Thailand’s chicken meat exports to grow, especially to the Japanese market.

Limited EU export market

Total exports are estimated to further increase by 8% to 670,000 MT in 2016. However, the growth in exports to the EU market is relatively limited due to the EU quota allocated to Thailand, increased competition from producing countries in Eastern Europe, and the unfavourable EU economic environment. Total chicken meat exports to the world are forecasted to 730,000 MT in 2017.

Due to a potential growth in export demand and an anticipated increase in chick production capacity, Thai chicken meat production is forecasted to further increase from the 2016 level by 5-7% in 2017. Trade sources explain that robust prices for live broilers and chicken meat for export in 2016 are encouraging the expansion. It is estimated that, in 2017, chick production may range between 33-34 million birds per week, as compared to the estimated 31-32 million birds in 2016.

Improved biosecurity and animal health

There has been no serious animal disease incidence for the Thai broiler industry in recent years, mainly because Thailand has improved farming facilities and on-farm biosecurity measures to mitigate food safety challenges and animal health concerns such as Highly Pathogenic Avian Influenza (HPAI) and other diseases. Nearly all broiler houses are equipped with evaporative cooling systems, which reduces disease exposure and mortality rates. The closed-farming system has been instrumental in preventing a return of HPAI incidents.

In addition to effective disease control and surveillance programs, the industry has also utilised new technologies including improved genetics, farm management, and feed nutrition. The average weight of fully grown broilers at slaughter is currently at 2.3-2.4 kilogrammes per bird, compared to 2.0-2.1 kilogrammes per bird in the mid-2000s. The number of days it takes to raise one-day old chicks to market delivery, dropped to 40-42 days from 49 days, and the average feed conversion ratio (FCR) decreased to 1.6-1.7 from 1.9-2.0 over the same period.

Rosie Burgin Editor Special Projects