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Bird flu outbreaks rock poultry sector as prices rise

Oscar Rousseau

By Oscar Rousseau+

02-Dec-2016
Last updated on 02-Dec-2016 at 13:12 GMT2016-12-02T13:12:36Z

The spread of AI could impact China's supply of breeding stock, warns Rabobank
The spread of AI could impact China's supply of breeding stock, warns Rabobank

Waves of avian influenza (AI) across Europe, Asia and Africa could impact the poultry industry just as broiler prices rise and feed costs drop. 

Hundreds of thousands of birds have been culled around the world following a global AI epidemic. A Rabobank report has stressed the wave of outbreaks could “shake-up” poultry trade and the breeding stock supply.

The spread of the H5N8 AI strain comes as the northern hemisphere enters the winter season, when disease risk is usually higher. As price and feed conditions improved for the better, Nan-Dirk Mulder, associate director of commodities, feed and animal protein at Rabobank, called the development “unwelcome” and “worrying”.

‘Strong impact’

We’ve not seen a slowdown in the number of [AI] outbreaks and this is raising fears for the coming month,” Nan-Dirk told this site.

Besides this shake-up in global trade streams with a negative impact on local AI-affected industries, there will be a strong impact again on breeding stock trade, especially the Asian supply [which] will become a further worry for the industry.

The Netherlands was just in the process of being reopened for exports to China, but this will be again delayed and their dependence on only two suppliers - Spain and New Zealand - is risky. Also, other Asian markets will face challenges again, especially due to the outbreaks in Germany and the Netherlands who are major traders in breeding stock.

Brazil slows production

The cloud of AI has cast a darkness over an industry that has otherwise enjoyed positive results this year. Rabobank’s global broiler price index increased by 3% in Q3, while feed prices dropped by 5% over the same period. Feed prices are expected to remain steady moving forwards.

Most regions in the world have seen improved conditions. Brazil and the US have both slowed production growth significantly in the second half of 2016, according to Rabobank. This has led to positive conditions in Brazil, where feed prices have dropped.

The bank said four conditions are likely to challenge the sector in 2017: the return of the AI; an increased demand for new chicken concepts; a shortage in China’s supply that could dent market conditions; and pressure on global trade volumes following a protectionism surge.

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