Market Update

High Path Avian Influenza Impacts on US Poultry Exports

The latest US Livestock and Poultry Outlook report shows the extent that Avian Influenza related restrictions are impacting on US poultry exports. Total broiler shipments in February were 17% down on February 2015. Export bans by China and South Korea went into effect in January, on top of an existing ban by Russia. The continued strength of the US dollar also limited the potential for exports.

Beef exports in February were also down by 2.6% compared to the previous year, with falling shipments to Hong Kong, Canada, and Mexixo, however shipments to Japan the biggest export market for US beef were up by 9.3%. Beef imports in February were up sharply by 48.8%, with increased shipments from Australia, Brazil, Mexico and New Zealand.

Growth in the US dairy herd, and in dairy production is slowing down, despite feed prices remaining at low levels. Drought in California and other Western states is affecting production, and exports have become less competitive due to the strength of the dollar. US exports are also affected by trade bans by Russia, and are competing with EU producers who are also affected by the restrictions and looking for new markets.

The US pig sector continues to recover from PEDv (Porcine Epidemic Diarrohea). The inventory of market hogs at the beginning of March was 7.7% up on 2014. As with beef, an unfavourable currency is expected to lead to lower exports of pig meat in 2015, along with higher imports.