Poultry Quarterly Q1 2020: Outlook 2020 – Can Oversupplied Global Markets Be Saved By Rising, but Volatile Asian Trade?

The outlook for global poultry in 2020 is slightly more positive than it was in 2019, when markets suffered from relative oversupply.

picture of chicken filets

Report summary

A key driver of the gradual recovery will be ongoing strength in trade flows to Asia in order to supply African swine fever-affected markets such as China, Vietnam, South Korea, and the Philippines. These trade flows will be positive for dark-meat prices, though they will be subject to increasing volatility. Improved beef prices (the main substitute for fresh poultry), stable global average feed prices, and more balanced supply will also all support the gradual recovery. The downside is that global whole-bird and breast-meat markets will remain pressured and have limited price upside.

“African swine fever (ASF) will increasingly push chicken expansion in Asia in 2020,” according to Nan-Dirk Mulder, Senior Global Specialist – Animal Protein. “This will help fill the gap in local protein markets affected by ASF, but it also raises concerns about future oversupply. Strong growth in local supply – from poultry companies and pig farmers who invest in poultry farming – and rising imports are boosting supply. This will likely result in local price volatility in 2020.”

Global markets will be highly volatile in 2020. Dark-chicken meat prices are expected to stay at average to high levels, but with more volatility. Supply growth in ASF-affected markets, rising availability of dark meat after Russia’s and Ukraine’s entry to global markets, and the reopening of US chicken exports to China will all add to volatility in global trade flows.

The top-performing markets in 2020 will be China, which is expected to see short supply in the next four to five years, and Mexico, where supply will also remain short, after outbreaks of avian influenza (AI) in early 2019. The US – and, to a lesser extent, the EU and Russia – will see improvement if supply stays balanced.

Several wildcards could impact markets in 2020, including Brexit, the ongoing risk of AI, feed-price volatility (the base-case scenario indicates limited growth), and potential trade disruptions. In trade, we see more openings in Asia (partly because of AI), but also rising restrictions in Africa and the Middle East.

  • Nan-Dirk Mulder

    Senior Analyst - Animal Protein
    Read more
  • Justin Sherrard

    Global Strategist - Animal Protein
    Read more
  • Matz Beuchel

    Data Analyst — Animal Protein
    Read more
  • Andrick Payen

    Analyst
    Read more
  • Angus Gidley-Baird

    Senior Analyst - Animal Protein
    Read more
  • Ben Santoso

    Senior Analyst - Animal Protein
    Read more
  • Blake Holgate

    Analyst - Animal Protein, Sustainability
    Read more
  • Beyhan de Jong

    Analyst – Animal Protein
    Read more
  • Christine McCracken

    Senior Analyst – Animal Protein
    Read more
  • Chenjun Pan

    Senior Analyst - Animal Protein
    Read more
  • Don Close

    Senior Analyst - Animal Protein
    Read more
  • Gorjan Nikolik

    Senior Analyst - Seafood
    Read more
  • Wagner Yanaguizawa

    Analyst - Animal Protein
    Read more