Source: Rita Jane Gabbett, MEATINGPLACE, 1/27/16


The good news for poultry producers is that the corn and soybeans they feed their birds should remain cheap for the next couple years; the bad news is a global recession could be on the horizon.
Poultry Perspectives principal Paul Aho made these predictions to a packed audience at the International Production and Processing Expo here.  Other predictions included:
• The commodity bubble has burst. “I don’t know if we are at the very bottom, but we are probably pretty close to the bottom,” said Aho.
• Oil prices are below the cost of production in places like Venezuela. Prices will start to rebound only after some of those wells are capped.
• Soybean prices will be kept down by increasing production in places like Argentina, Brazil and Paraguay.
• Corn prices will be kept down by rising production around the globe. 
• Ethanol production will likely remain steady and the Renewable Fuels Standard mandate will likely remain at 10 percent.
• U.S. poultry consumption typically tracks median income, which is rising.
• The U.S. economy is vulnerable to a looming Chinese recession, not specifically because of China but because it would launch a global recession. 
• Deboned chicken breast prices in 2016 could peak at about $1.40 per pound, compared to the 2015 peak of $1.60. 
• Leg quarter prices could peak at about 30 cents per pound this year, compared to a peak of 42 cents per pound last year. Increased supply, trade restrictions, a strong dollar and the fact that major chicken importers are also oil exporters will all weigh on exports and prices. 
• Wing prices are fairly inelastic and demand continues to be strong as the foodservice industry has stabilized. 
• Big bird production continues to rise in the United States.
• Turkey production should increase if bird flu remains contained.

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