US poultry sector well-positioned to withstand profitability pressure
The U.S. chicken industry has experienced an unprecedented run of historic profitability since 2012 and responded by significantly increasing production and processing capacity. Six new poultry processing plants are expected to be operating by 2020, while production and supplies of competing animal proteins are also expanding.
According to a new report from CoBank’s Knowledge Exchange Division, profitability across the poultry sector is now under pressure as meat prices decline amidst growing supplies, recalling memories of the last major downturn a decade ago, which resulted in severe financial losses across the sector. Current projections for chicken production growth are 1.5%, which is well below the 2.5% average growth rate in the last five years.