No more bullish outlook for PH’s chicken production – USDA

Published September 24, 2020, 6:00 AM

by Madelaine B. Miraflor

While the decline in the country’s pork production is already a given amid the persistence of African Swine Fever (ASF), the US Department of Agriculture (USDA) released a surprising outlook on the Philippines’ chicken production, which it said might go down despite the assurance of the Philippine government that there will even be a surplus of this commodity by the end of the year.  

Based on the latest Global Agricultural Information Network (GAIN) report, the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) here in Manila (Post) said the Philippines’ chicken production is now “likely to decline by 15 percent this year,” reversing the initially bullish outlook, amid smaller consumption and broiler integrators cutting down or delaying their production cycles to reflect this weak poultry demand.

This, while Post expects a larger drop in pork production of 20 percent in 2020 as ASF remains a major concern in Luzon and parts of Mindanao.

“The situation for chicken meat has changed considerably, with industry contacts now projecting a production drop of 15 to 30 percent in contrast to their initially bullish growth forecasts,” Post said.  

“Broiler production in the first half of the year registered a five percent decline, with slaughter numbers in dressing plants down nine percent,” it added.

The six-month lockdown in the Philippines has heavily affected the hotel, restaurant, and institutional industry, where it is estimated that one third of all chicken is consumed, the report said.

Job losses and work closures have also contributed to lower consumer spending, particularly for food consumed outside the home.

Farm gate prices of chicken, according to Post, have recovered to normal levels after experiencing record lows in April to May, indicating a reduction in local output.

Retail prices of chicken have remained steady, however, likely as a result of the Department of Agriculture’s (DA) Suggested Retail Price (SRP) as mandated by the Price Act. The SRP for whole chicken is P130 per kilogram.

As for trade, Philippine import data shows an increase in chicken imports, namely mechanically deboned meat (MDM), which goes to processed meat production and has proved during the pandemic to be a pantry staple and emergency relief item.

Meanwhile, Post sees pork production in the Philippines dropping by 20 percent in 2020 as African Swine Fever (ASF) continues to affect the main hog producing areas in Luzon. This is higher compared to its previous forecast of a 15 percent decline.

According to the latest Philippine Department of Agriculture (DA) report to the World Organization for Animal Health, over 300,000 pigs or about three percent of total swine inventory have already been culled due to ASF.

Feed demand has also reportedly dropped by about the same volume, while pork imports have also dropped significantly.

According to industry contacts, said Post, consumption has dropped by about 20 to 30 percent, but will likely improve in the second half of the year.

“Much of the country outside Manila has moved to a Modified General Community Quarantine, which has fewer restrictions placed on restaurants. The National Capital Region is under General Community Quarantine, which limits dine-in to 50 percent capacity. Both quarantine levels are reduced from what they were in the earlier stages of COVID-19, when demand was slashed due to restaurants being limited to delivery and many people were without jobs,” Post said.

For Samahang Industriya ng Agrikultura (SINAG), however, it maintained that the Philippines is not facing a pork supply shortage but a huge distribution problem.

“As early as March, we already told the DA that there is a surplus of pork in Mindanao and Visayas. We only need to bring that to Luzon,” SINAG Chair Rosendo So said.

To recall, Luzon is the most badly hit by ASF, while Visayas has remained free from the dreaded virus.