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Better Days Coming for Chicken Producers

Better Days Coming for Chicken Producers

Chicken, pork, and beef producers should all see better days over the next 12 months in spite of specific challenges in each segment. The industry website Meating Place Dot Com notes one industry analyst, Jeremy Scott of Mizuho Securities, who says the worst is behind us in the chicken market.

That specific market segment had one of its most difficult stretches in the last five years during December and January. Scott says a “substantial improvement” in U.S. chicken profit margins will be powered by better exports and a less-than-expected ramp up in new capacity. He says poultry margins are starting to move higher during a faster-than-expected price recovery and a boost in chicken products featured in both restaurants and retail establishments. Looking at other protein sectors, Scott sees beef packer margins continuing to trend favorably this year. That’s in spite of being off their seasonal highs and featured support at the retail level is beginning to shift away from beef and to chicken.

A healthy animal supply and solid exports should continue to support the higher-than-normal packer margins over the next six months. As for the pork sector, the African Swine Fever virus will put a healthy dent in China’s hog population. However, he says there likely won’t be a significant jump in Chinese pork imports until ASF is under control and the transportation and trade restrictions are ended.

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