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Poultry Outlook Report - January 2005

By U.S.D.A., Economic Research Service - This article is an extract from the January 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. The report indicates that broiler production during the first half of 2005 is expected to total 17.2 billion pounds, about 3-percent higher than a year earlier.

Poultry Outlook Report - January 2005 - By U.S.D.A., Economic Research Service - This article is an extract from the January 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. The report indicates that broiler production during the first half of 2005 is expected to total 17.2 billion pounds, about 3-percent higher than a year earlier. USDA Economic Research Service

Higher Broiler Production Expected in 2005

The effects of a growing economy and a strong export market will be partially offset by the effects of increases in beef products in the U.S. market as cattle again come in from Canada.

Broiler Trade Outlook Stronger

Composite Broiler Price
Percent change from previous month
The outlook for broiler meat exports in the fourth quarter of 2004 is stronger than earlier anticipated and the estimate has been raised by 100 million pounds to 1.325 billion pounds. Most of the increase is due to record exports in October but other factors, such as the reopening of the Hong Kong/China market and the decline in the dollar relative to a number of other currencies have also contributed to the increase. Shipments in 2005 are forecast at 4.96 billion pounds, up 7.6 percent from 2004, when disease restrictions limited trade, but only slightly higher than in 2003.

Unlike recent years, going into 2005 there are some outstanding issues in access to a number of the largest markets, but there are no outright trade bans or major restrictions to shipping involved. The poultry import quota to Russia for 2005 has been set at 771,900 metric tons (approximately 1.7 billion pounds) for all U.S. poultry exports but broiler products are again expected to account for nearly all of the shipments. In Mexico, the quota for frozen leg quarters in 2005 is 102,010 metric tons (approximately 225 million pounds), a quantity slightly higher than in 2004. The over-quota duty on frozen leg quarters has been lowered to 59.3 percent.

Weekly Turkey Slaughter
Percent change from last year
Over the next 2 years, the quota amount will rise slightly each year and the overquota duties will decrease. The quota on frozen leg quarters and the over quota duty are scheduled to be eliminated completely at the beginning of 2008.

U.S. broiler exports in November 2004 were 470 million pounds, up 3 percent from the previous year. Thus, exports over the first 11 months of 2004 were 4.3 billion pounds, down 5 percent from a year ago. Leg quarter exports to Russia and the New Independent States (NIS) made up the bulk of the shipments. In November, shipments of leg quarters to Russia totaled 133 million pounds, while shipments to the NIS were an additional 69 million pounds. Together shipments to these two areas accounted for 59 percent of all leg quarter exports and 43 percent of all broiler exports, on a quantity basis.

Higher Broiler Production Expected in 2005

Weekly Broiler Slaughter
Percent change from last year
During the fourth quarter of 2004, the number of eggs being set per week averaged 204 million, up 2.3 percent from the same period a year earlier. The number of chicks placed for growout per week averaged 168 million, 3.4 percent higher than a year earlier. The average growth rate in eggs set and chicks placed tended to be somewhat lower towards the end of the quarter. Although there is expected to be strength in the export market, prices for most broiler products are currently below a year earlier. With lower prices for most broiler products, growth in egg sets and chick placement are expected to gradually slow. This implies a slightly slower growth in U.S. broiler production through the first half of 2005. Broiler production during the first half of 2005 is expected to total 17.2 billion pounds, about 3 percent higher than in the same period in 2004. The effects of a growing economy and a strong export market will be partially offset by the effects of increases in beef products in the U.S. market as beef and cattle again come in from Canada.

Broiler production in November was 2.79 billion pounds, an increase of 15.1 percent from a year earlier. The large production increase is due chiefly to an additional two slaughter days in November 2004 compared with a year earlier.

Broiler slaughter in December is expected to be up slightly from the previous year. The estimate for fourth-quarter 2004 broiler production is now 8.55 billion pounds, down 50 million from the previous estimate.

Broiler stocks at the end of November totaled 765 million pounds, 33 million pounds lower than October, but still 35 percent higher than a year earlier. All of the increase has been in broiler parts, as the stock level for whole birds was only 21 million pounds, down 12 percent from a year earlier. While the stock levels for all broiler parts where higher, stocks for paws (up 121 percent) increased the most as restrictions on exports to China have greatly reduced exports.

Turkey Prices Higher

Retail Turkey Price
Percent change from previous month
In December, the price for whole hen turkeys in the eastern region averaged 76 cents a pound, over 9 cents higher than in 2003. Prices for the fourth quarter 2004 averaged 77.1 cents per pound, up 14 percent from a year earlier. Wholesale prices for whole turkeys and turkey parts are expected to remain above year-earlier levels as stocks (whole birds and parts) are well below last year and minimal growth is expected in turkey production. Turkey production in November was 482 million pounds, 5.9 percent higher than in November 2003. However, without the two extra slaughter days in November 2004, production would have been lower than a year ago.

In November, U.S. turkey exports totaled 47.4 million pounds, up 4.8 percent from the previous year. The November exports lifted total turkey shipments over the first 11 months of 2004 to 401 million pounds, down 9 percent from the same period in 2003. Exports to Mexico and Canada have both been strong and shipments to Russia so far in 2004 are 13 percent higher. However, increases to these markets were more than offset by lower exports to Hong Kong, down 79 percent over the first 11 months, and a number of other Asian markets.

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For more information view the full Livestock, Dairy and Poultry Outlook - January 2005 (pdf)

Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - January 2005

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