Production falls forecast

Despite potential growth in export demand, Thai chicken meat production is forecast to drop by 3-5 per cent in 2016 if the Thai authorities continue to ban imports of US chicken genetics in 2016 as a result of highly pathogenic avian influenza.

Thailand imported 557,426 chicks of grandparent stock in 2014. 412,706 chicks or three-quarters of total imports originated from the US.

With these imports cut off in 2015, industry has been expressing concern that existing grandparent stocks will only be able to maintain the current level of broiler production until the first half of 2016. New grandparent replacement will be critical in 2016 in order to maintain broiler production.

Current state of industry

Thai chicken meat production in 2015 is estimated in the report to grow modestly by 5 per cent from the 2014 level mainly because Saha Farm Group, which was closed for several months from May 2013 to March 2014, has built up its chicken production in 2015 reaching 2-3 million birds per week at the present time.

Thailand has rapidly improved its body weights and feed conversion ratios in broilers in recent years, and has also successfully prevented a return of avian influenza since the damaging outbreak in 2004 by implementing strict biosecurity measures.

Feed costs have risen recently in Thailand, but feed mills are altering ingredient blends to try and keep costs down. Prices for day-old chicks declined, resulting in an overall lowering of cost of broiler production.

However, falls in market prices received for broilers meant that integrated processors are only breaking even, whilst non-integrated processors are facing losses due to higher production costs.

Consumption and exports

Despite lower prices, domestic consumption and sales of chicken meat will only expected to expand by 1-2 per cent in 2015 and 2016 due to Thailand’s poor economic outlook and increased competitiveness of pork in the first half of 2015, the report said.

Although recent trends have shown Thais moving toward a big-city lifestyle and away from traditional practices, particularly in Bangkok, most Thai people still buy fresh chicken meat from traditional markets. This accounts for about 60-70 per cent of total chicken meat sales domestically. Trade sources expect chicken meat consumption in the ready-to-eat and quick service restaurant sectors to continue to grow by 5-6 per cent annually for the next 5 years.

Chicken meat exports for 2015 are estimated to grow by 6 per cent to 580,000 metric tons (MT) when compared to 2014. More markets are opening to Thai products due to the continued absence of avian influenza.

About 70 per cent of total exports in 2015 are expected to consist of cooked chicken meat products.

Thai chicken meat exports are forecast to decline to 530,000 MT in 2016 in anticipation of reduced broiler production.