US Poultry Outlook: This Time Things Are Different
By Will Sawyer
- The U.S. chicken industry has experienced an unprecedented run of historic profitability since 2012 and responded with a significant increase in production and processing capacity.
- Six new poultry processing plants are expected to be operational by 2020. The new chicken production capacity, though, is coming online in the midst of continued supply expansion among competing animal proteins.
- Profitability across the poultry sector is now under pressure as meat prices decline amidst growing supplies, bringing to mind the last major downturn a decade ago which resulted in severe financial losses across the sector.
- With the industry now more responsive to demand – while also enjoying strong balance sheets following years of strong profits – the outlook for the next downturn in the chicken cycle is much brighter.
- The spread of African Swine Fever, or ASF, in major markets like China could significantly alter poultry’s export demand and industry profitability in the short term.
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