Contents

Poultry: U.S. broiler meat production is forecast to total 36.9 billion pounds in 2008, a 2.1-percent increase from 2007. Broiler exports are expected to expand to 6 billion pounds, which would be the second consecutive year of record exports. Broiler production has been strong over the first 2 months of 2008, but production is expected to slow in the second half of the year as producers reduce production due to rising feed and energy costs. Turkey production during January and February was 1.05 billion pounds, up 13 percent from the same period in 2007. Even with this increase, prices for whole turkeys were 82 cents per pound in March, up 15 percent from the previous year.

Broiler Production Revised Slightly

The forecasts for broiler meat production were revised downward slightly in the second, third, and fourth quarters of 2008. The downward revisions were 25 million pounds in the second quarter and 100 million pounds in the third and fourth quarters. The new forecast for 2008 is 36.9 billion pounds, up 2.1 percent from 2007. On a quarterly basis the growth in production on a year-over-year basis falls off rapidly after the first quarter, leading to a forecast of a decline in production in fourth-quarter 2008. Production in first-quarter 2008 is estimated at 9.08 billion pounds, up 5.2 percent from the previous year. Throughout 2008, much of the increase in production is expected to come from increases in average bird weights. Over the last several months, much of the increase in broiler production has been from heavier birds, which has pushed up average weights. Higher average weights are expected to continue through the rest of 2008, albeit at perhaps a lower rate of growth.

Over the first 2 months of 2008, broiler meat production totaled 6.1 billion pounds, up 7.4 percent from the same period in 2007. The increase in meat production in the first 2 months has come from growth in both the number of birds being slaughtered, up 5.3 percent, and an increase in the average liveweight at slaughter to 5.56 pounds, up 1.6 percent.

Over the last 5 weeks (March 8 to April 5), the number of chicks placed for growout has averaged approximately 180.3 million per week, up 2.6 percent from the previous year. In addition, over the last 3 weeks the number of eggs placed in incubators has been about even with the same period a year earlier, pointing toward a decline in the number of chicks that will be placed in the coming weeks. Broiler meat production in second-quarter 2008 is forecast at 9.38 billion pounds, up 3.2 percent from the previous year, but a considerably slower growth rate than in first quarter 2008.

The estimate for broiler cold storage holdings at the end of first-quarter 2008 was reduced to 750 million pounds, 26 percent higher than the previous year, but down 25 million pounds from the previous estimate. The reduction comes chiefly as the result of continued strength in broiler exports, with expected reductions in the growth of broiler production in March. At the end of February, cold storage holdings were higher for almost all broiler products, with stocks of dark meat products being much higher compared with a year earlier. Products such as leg quarters, drumsticks, and thighs were all at least 50 percent above their year-earlier levels. However, cold storage holdings of thigh meat were down 15 percent from the previous year. Ending broiler stock estimates were also lowered for the second, third, and fourth quarters of 2008 due to recent declines in the growth in broiler hatchery numbers, which is expected to lead to lower production, especially in the second half of 2008.

In first-quarter 2008, the 12-City price for whole broilers averaged 78.1 cents per pound, up 4 percent from the previous year, which was in turn about 20 percent higher than the price in first-quarter 2006. Prices for other broiler products in first quarter 2008 were mixed, with prices for most leg meat products up and prices for breast meat products somewhat lower then in first-quarter 2007.

The strong export market, composed mostly of leg quarters, has helped to bolster the prices for leg meat products. With a relatively weak economy slowing demand domestically and a weak dollar making U.S. exports more competitive, the price spread between leg meat products and breast meat products is expected to narrow in the coming months.

Turkey Production Up Strongly

U.S. turkey meat production is now estimated at 6.2 billion pounds in 2008, up 3.5 percent from the previous year. Like broilers, most of the increase in turkey meat production is expected to come in the first half of the year, with growth slowing rapidly in the second half. The higher meat production is expected to come chiefly from a higher number of birds being slaughtered, as average weights are expected to be up only slightly. Over the first 2 months of 2008, turkey meat production totaled 1.05 billion pounds, up 13 percent from the same period in 2007. During January and February, the number of turkeys slaughtered was up 9.8 percent and the average live bird weights were 30 pounds, up 2.7 percent from same time in 2007.

At the end of February 2008, cold storage holdings of turkey products totaled 411 million pounds, up 32 percent from the previous year. The increase includes larger holdings of whole birds, which were up 7 percent from the previous year to 156 million pounds. However, most of the growth came in holdings of other turkey products, which totaled 255 million pounds, an increase of 53 percent from the end of February 2007.

Prices for whole turkeys have continued to remain strong through first-quarter 2008, although they have declined seasonally from the very high prices they reached in fourth-quarter 2007. Prices for whole hens in the Eastern market averaged 77.4 cents per pound in first-quarter 2008, up 11 percent from first-quarter 2007 and 15 percent higher than in first-quarter 2006. While turkey production is forecast higher in 2008 and cold storage estimates have increased strongly, whole turkey prices in 2008 are expected to average above year-earlier levels.

Eggs Prices Increase 58 Percent in First Quarter

The wholesale price for one dozen large eggs in the New York region averaged $1.59 in first-quarter 2008, up 51 percent from first-quarter 2007. With the Easter holiday in late March this year, egg prices are expected to decline seasonally in the second quarter. Currently, egg prices in the New York market are expected to average $1.27 - $1.33 per dozen in second-quarter 2008. While this is quite a decline from the first quarter, it is still 41 percent higher than in the same period in 2007.

Over the first 2 months of 2008, table egg production was 1.05 billion dozen, up 0.5 percent from the previous year. The high prices for eggs over the last two quarters is expected to gradually result in higher table egg production, and the forecast for 2008 table egg production was increased by 20 million dozen. The total for 2008 is now expected to be 6.49-billion dozen, a 1-percent increase from the previous year. Growth in broiler meat production is expected to slow in second-half 2008, and the production of hatching eggs is expected to follow a similar pattern.

Overall production of hatching eggs is forecast at 1.12 billion dozen in 2008, up 0.7 percent from 2007, but by the third quarter production is expected to be fractionally lower than the previous year.

Growth in Broiler Shipments Continue in February

Broiler exports for the month of February totaled 507 million pounds, up about 12 percent from a year ago. After a record-breaking year of broiler shipments in 2007, the purchasing power of foreign currency continues to resonate in the U.S. marketplace in 2008. U.S. broiler meat remains a highly desirable product in countries such as Russia, other member of the Commonwealth Independent States, China, and Mexico, where American broiler meat is purchased at bargain prices by some importers due to favorable exchange rates.

For the first quarter of 2008, broiler shipments are expected to reach 1.4 billion pounds. Exports for 2008 are forecast at a record high of 6 billion pounds, 4 percent above 2007.

Turkey Shipments Hold Strong in February

Turkey exports totaled 49 million pounds in February 2008, up about 27 percent from a year ago. The growth in turkey shipments recorded for February 2008 was fueled primarily by increased purchasing power exercised by foreign countries in U.S. markets. Mexico, China, Russia, and Canada are the largest U.S. markets and are responsible for about 84 percent of the increase in broiler shipments in February 2008. Turkey shipments in the first quarter of 2008 are expected to total 135 million pounds, almost 9 percent higher than first-quarter shipments in 2007.

Further Reading

-

You can view the full report by clicking here.

April 2008