Avian influenza and climate change challenge Japan's poultry production

Japan's poultry industry is confronting significant challenges as avian influenza and climate change exert pressure on production levels. These factors are expected to drive further consolidation within the sector, impacting the market dynamics.

Background

The Japanese poultry sector, known for its high self-sufficiency, is experiencing a decline due to multiple challenges. Avian influenza, persisting for the fifth consecutive season, has led to substantial culling, with 8.4 million birds culled between October 2024 and February 2025 alone. This epidemic has resulted in a projected 6% decline in egg production for 2025, according to the Japan Poultry Association.

Climate Impact

Climate change is exacerbating these challenges. The summer heat in Japan has weakened poultry, further decreasing egg production. A survey by Tabechoku, a major e-commerce retailer, revealed that 40% of egg producers reported reduced output, with some expecting a 50% decrease. The extreme temperatures, with a record high of 41.8°C, have forced farmers to adopt cooling measures to mitigate the impact on poultry.

Market Implications

The combination of avian influenza and climate change is complicating Japan's ability to source poultry meat internationally. Historically, Japan has been a top buyer of chicken meat, but currency devaluation and increased competition from markets like China and Brazil are eroding its purchasing power. As a result, Japan's self-sufficiency in poultry, currently at 62%, is on a downward trend.

Consolidation Trend

The industry is also facing demographic challenges, with many farmers nearing retirement age without successors. This situation is prompting a trend towards vertical integration, where larger producers acquire smaller farms to ensure stable supply chains.

There is a trend now to vertical integration where the bigger producers buy farms and run them as integrated operations to secure supply.

Nan-Dirk Mulder from Rabobank

The combination of these factors suggests that Japan's poultry industry will continue to face significant hurdles, necessitating strategic adjustments to maintain its position in the global market.

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