Pressure in Thai broiler industry

by Editor fleischwirtschaft.com
Friday, September 21, 2012

Unlike 2010 and 2011, the Thai broiler industry is encountering pressure from a significant reduction in prices for products across the board as well as higher production costs derived from escalating world prices for main feed ingredients, i.e. soybean meal and corn. A decline in prices for live broiler and chicken meat in 2012 is attributed to a supply glut derived from increasing broiler production. Broiler production in 2013 is forecast to drop 6%, in contrast to a high growth of 15% in 2012.

Thailand’s broiler meat production in 2012 is estimated to grow sharply by 15% to 1.55 Million Metric Tons (MMT) from 1.35 MMT. Meanwhile, the Thai broiler industry is encountering pressure from a significant reduction in prices for products across the board as well as higher production costs.

Reduced broiler meat production
Consequently, most of the Thai broiler processors are likely to scale down their broiler meat production in the last quarter of 2012 and most of 2013. This will likely reduce broiler meat production by 6% to 1.45 MMT in 2013. Skyrocketing prices for feed ingredients have severely affected production costs among broiler integrators in the second half of 2012.

However, the impact of higher feed prices was offset sharply by reduced chick prices for the first half of 2012. As a result, average live broiler production costs in the first 7 months (Jan-July) in 2012 mirrored those during the same period of 2011.

Worries about high feed prices
Integrated broiler processors are worried that the drought in the U.S. may further push feed prices higher for the remainder of 2012. Domestic consumption of broiler meat continues to grow primarily because quick service restaurants (QSR) and ready-to-eat markets have expanded and chicken meat is less expensive than other meats.

Thailand’s broiler meat exports are estimated to grow 15% to 540,000 metric tons in 2012 and grow another 7% in 2013 mainly because the EU and several other countries lifted their bans on imported Thai uncooked chicken meat products. A supply glut in 2012 forced Thai packers to reduce their export prices, especially in the EU market.
stats