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Poultry: Broiler production is expected to increase only slightly in 2009, after an expected increase of 2 percent in 2008. With higher feed and energy costs impacting both growing and processing costs, broiler integrators will have little incentive to expand production. Little or no growth in broiler production is expected in the second half of 2008 and the first half of 2009. Broiler production is expected to increase in the second half of 2009 in response to rising prices. Exports of broiler and turkey products are expected to hit record highs in both 2008 and 2009, benefiting from their enhanced competitiveness on world markets due to the decline of the dollar.

Poultry Trade: U.S. broiler and turkey shipments were up in first-quarter 2008 from a year earlier. U.S. broiler shipments for the first quarter of 2008 totaled 1.5 billion pounds, up 18 percent from first-quarter last year. U.S. turkey shipments totaled 148 million pounds for the first 3 months of 2008, up 19 percent from a year earlier. U.S. boiler shipments for March 2008 totaled 544 million pounds, an increase of 28 percent from last year. March turkey shipments totaled 52 million pounds, an increase of 19 percent from March 2007.

Poultry

Broiler Production Slightly Higher in 2009

U.S. broiler meat production is expected to total nearly 37.2 billion pounds in 2009, up 0.8 percent from the previous year after an expected increase of 2 percent in 2008. The increases in broiler production are expected to be held down by high feed prices and increases in energy costs. Broiler meat production is expected to be slightly lower in the first half of 2009, but to increase in the second half in response to rising prices for broiler products. With only a small gain in production and expected growth in exports, domestic per capita disappearance levels are expected to decrease slightly in 2009. The majority of the production gain is expected to come from a higher numbers of birds slaughtered. Average bird weights at slaughter are not expected to increase much, as higher feed costs place an increasing premium on maximizing feeding efficiency. Cold storage holdings of broiler products are expected to gradually fall in 2008 and through the first half of 2009 as production slows.

The 12-city wholesale price for whole broilers is expected to average between 80 and 86 cents per pound for 2009. This is about 3 percent higher than 2008, when prices for whole birds are expected to average 79 to 82 cents per pound. Prices are expected to show the most gain in the second half of 2008 and the first half of 2009 when broiler production is flat or down slightly on a year-over-year basis. Although broiler production will only have small gains in 2008 and 2009, price increases are expected to be tempered by a sluggish domestic economy, with reduced discretionary income due to increases in food costs and higher energy prices.

Other Chicken

Other chicken meat production is expected to reach 525 million pounds in 2009, down almost 1 percent from 2008. Other chicken exports are also expected to remain about the same in 2009 (150 million pounds) as in 2008. Other chicken production will be impacted by the decrease in broiler production in the second half of 2008 and the first half of 2009. With the decrease in production in 2009, the estimate of per capita other chicken disappearance is expected to decline to 1.2 pounds, down 0.1 pound from 2008.

Turkey

Turkey production is expected to fall in 2009 to 6.1 billion pounds from a forecast 6.2 billion pounds in 2008. The decline is expected to again come from the combined impacts of much higher feed costs and energy prices. This is expected to be due to a slightly lower number of turkeys slaughtered in 2009 and produce pressure to slaughter birds at slightly lower weights. After several years of production growth, per capita turkey disappearance is forecast to reach 18 pounds in 2008. However, with the expected smaller production and strong exports, domestic per capita disappearance is expected to decline by 0.4 pound to 17.6 pounds in 2009.

Wholesale prices for whole hen turkeys are expected to average 86 to 90 cents per pound in 2008, up approximately 7 percent from a year earlier. The increase is expected to result from slowing production in the second half of the year and strong export sales. Prices in 2009 are expected to average about 2 percent lower as rising production at the end of the year and a relatively weak domestic economy place downward pressure on whole bird prices.

Table-Egg Production Down in 2009, Hatching Eggs Up Slightly

Table-egg production is expected to total 6.4-billion dozen in 2009, down fractionally from 2008. Over the last 2 years table-egg production has basically been stagnant, as slight increases in productivity have been offset by declines in the number of hens in the table-egg laying flock. Although there was a strong spike in table-egg prices in fourth-quarter 2007 and first-quarter 2008, the table-egg flock size has remained below that of the previous year. Hatching-egg production is expected to total just over 1.12 billion eggs in 2009, a small increase from the forecast of 1.12-billion dozen in 2008. The increase in production will be due to higher output in the second half of the year as broiler production begins to increase on a year-over-year basis.

Hatching-egg use is expected to total just under 1.02-billion dozen in 2009, down slightly from the previous year. Changes in hatching-egg use are expected to closely parallel changes in broiler production, as the majority of eggs hatched are broiler chicks that will be grown out for meat.

Ending stocks (egg products only) in 2008 and 2009 are expected to remain relatively stable at approximately the equivalent of 12-million dozen eggs. Egg exports are expected to expand by almost 4 percent in 2009 to 239-million dozen as a relatively weak dollar makes egg exports more competitive. Egg exports are a combination of both shell-eggs and processed egg products on a shell-egg equivalent.

Broiler Meat Production Rises Strongly in First-Quarter 2008

Broiler meat production in first-quarter 2008 totaled 9.11 billion pounds, up 5.6 percent from the previous year. The relative size of the increase in broiler production can be attributed partly to the fact that broiler production had declined by 2.1 percent in first-quarter 2007. The increase in first-quarter 2008 broiler meat production was a combination of a 3.6-percent increase in the number of birds going to slaughter and a 1.8-percent increase in the average liveweight of birds going to slaughter to 5.6 pounds.

Broiler meat production for second-quarter 2008 is forecast at 9.38 billion pounds, an increase of 3.2 percent from the previous year. However, the year-over-year increases in broiler meat production are expected to change dramatically in the third and fourth quarters of 2008. Poultry slaughter during April 2008 is expected to be much higher than for April 2007, but a large percentage of that increase will be due to an additional slaughter day in April 2008 compared with April 2007. There is also expected to be an increase in average bird weights.

Beginning in May, growth in broiler production is expected to slow sharply, as the reported number of chicks being placed for growout in the weekly Broiler Hatchery Report has been below a year earlier for the last 4 weeks. Over the last 5 weeks, (April 5 through May 3), the number of chicks placed for growout has averaged 0.1 percent lower than in the same period the previous year. In addition, the number of eggs set in incubators has also been about 2 percent lower than a year earlier, pointing toward continuing declines in chick placements.

Broiler cold storage stocks totaled 771 million pounds at the end of first-quarter 2008, up 33 percent from a year earlier. This is almost the exact opposite of the previous year when ending first-quarter stocks were down 32 percent from the previous year. The increase in cold storage holdings is due mostly to the strong production gains in first-quarter 2008 although the broiler export market was very strong. Cold storage holdings of most broiler products were higher than the previous year, but much of the increase was due to a sharp rise in the amount of leg meat products in cold storage. Some of the buildup of leg meat products in storage may be products awaiting export, as the price of leg quarters has shown continued strength over the last several months. The estimates of cold storage holding for the broiler meat supply and utilization tables have been revised back to the second quarter of 2003 to subtract out the broiler paws and feet included in those estimates.

Turkey Meat Production Up Strongly

Turkey meat production totaled 1.54 billion pounds in first-quarter 2008, up 9 percent from the previous year. The growth in meat production came mostly from the higher number of birds slaughtered (up 5.8 percent). In addition, the average liveweight of turkeys being slaughtered in first-quarter 2008 rose to 29.8 pounds, up 2.6 percent from first-quarter 2007. Turkey meat production in the second quarter is expected to reach 1.55 billion pounds, as the number of birds slaughtered and average liveweight are expected to remain above a year earlier. The 1.55 billion pounds of turkey meat production would be a 4.6 percent increase from secondquarter 2007.

Cold storage holdings of turkey products expanded rapidly in first-quarter 2008, jumping to 431 million pounds, a 24-percent increase from first-quarter 2007. There was a strong difference between stocks of whole turkeys and stocks of turkey products. The cold storage holdings of whole turkeys at the end of first-quarter 2008 totaled 174 million pounds, only a 2-percent increase from the same period in 2007. This helps explain the strength in whole bird prices, even with strong gains in overall turkey production in first-quarter 2009 production. On the other hand, stocks of turkey products had risen sharply to 256 million pounds by the end of March, a 46-percent increase from the same time in 2007. Cold storage holdings of turkey products have built up rapidly since the end of November 2007, when they totaled only 150 million pounds, down slightly from the previous year. Cold storage holdings of whole and turkey products in 2008 are expected to grow seasonally over the next two quarters. With a slower rate of increase in turkey meat production and a strong export market, turkey stocks are expected to total 525 million pounds at the end of third-quarter 2008, only 4 percent higher than the previous year.

Egg Production Down in First Quarter, Prices Fall after Easter

Overall table-egg production continued to be below year-earlier levels in firstquarter 2008. The average number of birds in the table-egg flock in first-quarter 2008 was down 2.2 percent from the same period in 2007. However, with an increase in egg production per hen, table-egg production totaled 1.59-billion-dozen eggs, down less than 1 percent from first-quarter 2007.

The big change for table eggs was the sharp drop in prices after the Easter period, which is the normal seasonal pattern. During first-quarter 2008, the wholesale price for one-dozen large eggs was $1.59 per dozen in the New York market. After the Easter holiday, prices for shell eggs began to drop very rapidly. Prices in the New York market are estimated to have averaged approximately $1.19 per dozen in April, 27 percent higher than the previous year, but down almost $0.40 per dozen from the price in March. While prices have declined, they are expected to stay above their year-earlier levels during second-quarter 2008.

Poultry Trade

2008 Broiler Exports Are Up in the First Quarter from Last Year

First-quarter U.S. broiler shipments in 2008 totaled 1.5 billion pounds, up substantially (18 percent) from shipments in first-quarter 2007. The primary reasons for the increase in broiler exports were the depreciation of U.S. dollar and the rise in consumers’ purchasing power in certain broiler-importing countries. Most of the increase recorded in first-quarter 2008 was fueled by expansion in export markets such as Russia (36%), China (28%), Mexico (27%), Taiwan (124%), Georgia (158%), and Moldova (116%). Exports in 2008 are forecast at a record 6 billion pounds. Total broiler shipments are expected to increase through the second and third quarters before leveling off in the fourth quarter. Broiler exports for 2009 are forecast at 6.1 billion pounds, almost 2 percent above 2008.

Turkey Exports Finish the First Quarter Strong

Turkey exports totaled 148 million pounds for the first quarter of 2008, up considerably (19 percent) from last year’s first quarter. This increase is attributed to a strong demand for turkey meat from importing countries such as China and Russia, along with a favorable exchange rate. Exports to Russia rose by almost 187 percent in first-quarter of 2008, while shipments to China increased by 78 percent during the same period. Although Mexico is by far the largest importer of U.S. turkey meat, its first-quarter turkey imports declined slightly (by less than 1 percent) from 2007 first-quarter total. Declines in the Mexican import of turkey meat could be due to strong substitution relationships, supported by favorable exchange rates and a 27-percent increase in shipments of broiler meat to Mexico from first quarter last year to first quarter this year. Turkey shipments for 2009 are projected at 635 million pounds, 5 percent higher than shipments in 2008.

Broiler Exports Are Up in March from a Year Ago

Broiler exports for March totaled 544 million pounds, up 28 percent from a year ago. The purchasing power of foreign currencies in the United States has given rise to larger shipments of broiler meat. China has perhaps benefited as much as any broiler importing country; shipments to China in March increased by almost 85 percent from a year earlier. Growth in total broiler shipments is expected to continue to increase throughout this year.

Turkey Shipments Hold Strong in March

Turkey exports totaled 52 million pounds in March 2008, up about 19 percent from a year ago. The growth in turkey shipments recorded for March 2008 was fueled primarily by increased purchasing power exercised by foreign countries in U.S. markets. Mexico, China, Russia, Hong Kong, and Canada are the largest markets for export sales of turkey and are responsible for most of the increase in turkey shipments in March 2008. Turkey shipments in 2008 are projected to be higher than the total shipments recorded for 2007.

Further Reading

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May 2008