Source: MEATINGPLACE, 7/4/14

The current year is shaping up to be even better than 2013 for the U.S. poultry industry, Rabobank said in a new report.

Global poultry prices increased in the second quarter, boosted by a recovery in demand and high beef and pork prices due to lower production, Rabobank said. The U.S. industry is also benefiting from a limited breeder flock, increasing exports due to the risk of another avian influenza outbreak in Mexico, and favorable feed costs.

"We see an increasingly balanced market, where supply discipline is more the order of the day and improving margins will be the likely result. However, markets remain volatile and any change in fundamentals, especially from the supply and feed side, will impact global prices,” Rabobank analyst Nan-Dirk Mulder said.

Global feed prices are expected to decline in the third and fourth quarters amid a good crop outlook for wheat and soybeans. Yet stocks remain low, and global grain and oilseeds prices have recently increased, Rabobank said.

“In addition, ongoing concerns about the situation in Ukraine and the potential threat of an El Nino event are creating some market volatility. Animal disease outbreaks also remain a concern,” according to the report.

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