High feed prices, industry inefficiency and pandemic curtailing chicken meat sector in Turkey

06-Sep-2021 - Last updated on 06-Sep-2021 at 15:38 GMT

Broiler feed prices have been steadily increasing in Turkey while broiler meat production has been stagnating for the past two years, finds a new report.

“In 2020, broiler feed prices were 60% greater than the previous year’s prices,” noted the USDA FAS publication.

Despite the rapidly growing demand for chicken meat in Turkey due to the growing population, broiler production in that country in 2021 is only expected to grow slightly - at 1.5% - to reach 2.17 million metric tons (MMT).

The USDA report estimates chicken meat output there will hit the 2.23 MMT mark in 2022, a hike of 3% on 2021.

“In 2022, chicken meat consumption is forecast at 1.691 MMT. Consumption is constrained because of insufficient production, increasing exports, and high market prices.”

Along with the closing of fast-food restaurants and hotels due to COVID-19 restrictions, high feed prices and the country’s dependence on imports of raw feed materials are limiting the growth of the sector. There is also inefficiency in the Turkish poultry production sector caused by multiple factors such as the currency depreciation against the US dollar, lack of slaughterhouses capacity, and the country's recent drought.

The poultry production growth rate, which averaged 6-10% per year for the last 15 years, is also hampered by the lack of supply of imported breeding stocks: day old chicks and hatching eggs. “Turkish poultry producers are currently facing higher prices for imported breeding stocks because of growing demand from Russia and the Middle Eastern, which has increased global prices.”

Dependence on imports

The main inputs for poultry feed in Turkey are corn and soybeans, with a significant reliance on imports for such components, continued the USDA FAS authors.

While Turkey does grow soybeans, corn, and a significant amount of wheat, the volumes produced are not at the levels needed to meet the demand for the poultry sector, they confirmed.

Around 40% of the corn and 97% of the soy used for poultry production in Turkey are imported.

The result: Feed costs account for 80% of the total expenditure in poultry operations, reported the agriculture specialists.

Romania, Russia and Ukraine are the top suppliers of corn to Turkey.

“The Government of Turkey (GoT) increased custom taxes for corn two years ago and the Turkish Grain Board (TMO) started selling inexpensive corn to Turkish producers. For this reason, the domestic and imported corn prices are similar. However, Turkey is not self-sufficient in corn production, and the drought has also negatively impacted production," wrote the USDA experts.

Turkey imports soybeans from Brazil and Ukraine mostly, they added.

On February 27, 2021, Turkey's Ministry of Agriculture and Forestry (MinAF) approved four GE soybean events and one GE corn event for feed as a result of applications by the Turkish Poultry Meat Producers and Breeders Association (Besd-Bir).

Although the approval of GE soybeans and corn events for feed was welcomed by the Turkish poultry industry, the high cost of feed imports continues to be a concern.

Domestic broiler feed production has been rising slightly since 2018, wrote the USDA team. The country produced 5.4 MMT of broiler feed in 2020. But feed production for laying hens has been decreasing as the layer population declines, with Iraq’s embargo on Turkish egg exports in May 2019 cited as a key reason for that trend. The Iraqi government stopped all egg imports from Turkey in order to protect its domestic production.