Industry revenue growth was largely supported by growth in poultry prices
Los Angeles, CA (PRWEB) October 09, 2013
As with most other industries under the supply management system, the Chicken and Turkey Meat Production industry exhibits a moderate degree of volatility. Fortunately for farmers, effective supply management has helped offset dips in revenue. Even in times of high feed costs, industry revenue posted growth. However, the industry was not immune to the devastating effects of the recession, evidenced by industry revenue falling 7.0% in 2010. When the economy returned to growth the following year, revenue followed suit. Overall, the industry posted an average annual growth of 2.1% in the five years to 2013, generating $2.8 billion in revenue.
According to IBISWorld Industry Analyst Kiera Outlaw, “Industry revenue growth was largely supported by growth in poultry prices, which in turn led to increased production volumes and better profit margins for farmers.” Due to the supply management system, poultry production quotas are set with production costs and expected consumer demand taken into account. The system also aims to provide farmers with healthy margins. To this end, industry revenue is tied to poultry prices. In the five years to 2013, the price of poultry rose at an average annual rate of 3.9%. The continued decline in red meat consumption is another factor that supported revenue growth. The increasing health consciousness of Canadian consumers boosted consumption of white meat over red meat alternatives. To this end, IBISWorld expects industry revenue to increase at a further 1.5% in 2013.
Looking ahead, “poultry farmers will continue to experience positive growth, albeit at a considerably slower pace,” says Outlaw. Although poultry meat is becoming more popular than beef and red meat, consumption of poultry meat is expected to stagnate. This is primarily because most of the consumer shift to poultry meat from red meat has already occurred. The industry is largely characterised by small, family-owned and operated farms; thus, the industry displays a low level of concentration.
For more information, visit IBISWorld’s Chicken & Turkey Meat Production in Canada industry report page.
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IBISWorld industry Report Key Topics
The Chicken & Turkey Meat Production in Canada industry is comprised of farms that raise chicken broilers and hens, turkeys and other poultry for meat production. Most farmers are contracted suppliers for particular processors; however, because the industry operates under a supply management system, processors are required to pay producers a regulated price for their poultry.
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