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Thai Broiler Industry under Pressure

19 September 2012, at 2:33pm

THAILAND - 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.

Thailand’s broiler meat production in 2012 is estimated to grow sharply by 15 per cent to 1.55 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 derived from escalating world prices for main feed ingredients, i.e. soybean meal and corn.

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 six per cent 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 seven months (Jan-July) in 2012 mirrored those during the same period of 2011.

Integrated broiler processors are worried that the drought in the US 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 per cent to 540,000 metric tons in 2012 and grow another seven per cent 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.

Further Reading

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