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Despite Challenging Times, Expansion Ahead for Industry

8 March 2012, at 11:53pm

US - Despite struggling for the past three years due to increasing costs of production, the US poultry industry could see expansion from 2013 onwards, according to the Food and Agricultural Policy Research Institute (FAPRI).

The chicken industry is struggling, as output prices have failed to keep up with recent feed cost increases.

Production is expected to decline in 2012 for the second time in four years. Prior to 2009, the industry had not seen contraction in any year since 1973.

However, high beef and pork prices due to overall meat supply tightness will allow poultry producers to profitably expand in 2013 and 2014.

In 2011, the spread between wholesale turkey and chicken prices was at its widest level since 1985.

Despite production growth in the last two years, the nine per cent contraction in 2009 turkey production has kept supplies relatively tight compared to chicken, according to the FAPRI report.

Chicken prices strengthen in 2012 and 2013 as the 2012 production decline and tight overall domestic meat supplies force consumers to pay more.

Unlike the beef and pork industries, chicken export growth has weakened considerably in recent years.

Many nations are striving to control food inflation and reduce their dependence on meat imports by developing their own chicken industries.

The US chicken industry will be increasingly dependent upon domestic demand growth if it is to continue to expand in the next decade.

Further Reading

- You can view the full report by clicking here.