Turkey production rose 4.9 percent in third-quarter 2007 and whole-bird stocks rose. The higher stock levels held down seasonal price increases for wholesale whole birds, but prices for whole hens in the Eastern market in fourth-quarter 2007 are expected to average slightly higher than the previous year. Broiler production in fourth-quarter 2007 is forecast at 9.125 billion pounds, 3.7 percent higher than in the previous year. Higher broiler and pork production, combined with no increase in broiler exports, is expected to place downward pressure on broiler prices in fourth-quarter 2007. The broiler meat production estimate for 2008 was increased by 325 million pounds due to continued increases in chick placements and higher slaughter weights.

Turkey Production Rises

U.S. turkey production in third-quarter 2007 was 1.49 billion pounds, up 4.9 percent from a year earlier. The increase in production was the result of a higher number of birds slaughtered (up 3.2 percent) and an increase in the average liveweight at slaughter to 27.9 pounds. Turkey meat production in fourth-quarter 2007 is forecast at 1.52 billion pounds, 3.2 percent higher than during the same period in 2006. Turkey meat production for 2008 is forecast at 5.94 billion pounds, up only slightly from 2007, in anticipation of the strong increases in broiler production and due to the build up of turkey stocks in the third and fourth quarters of 2007.

With higher third-quarter meat production and a decline in third-quarter exports, compared with a year earlier, ending stocks for the third quarter rose to 499 million pounds, up 7 percent from third-quarter 2006. Cold storage holdings of whole turkeys at the end of September were estimated at 266 million pounds, up 14 percent from a year earlier. Cold storage holdings of turkey parts, at 232 million pounds, were also higher, but this was an increase of less than 1 percent from the previous year.

Even with the strong increase in production in the third quarter and higher stocks, prices for whole turkeys were considerably higher in the third quarter and are expected to average 2 percent higher in the fourth quarter. Prices for whole hens in the Eastern market averaged 89.9 cents per pound in the third quarter, up more than 11 cents per pound from a year earlier. Prices in fourth-quarter 2007 are expected to average between 91 and 93 cents per pound, up about 2 percent from the previous year, although weekly prices are not expected to match last year’s peak of just over a dollar per pound.

Fourth-Quarter 2007 Broiler Meat Production Forecast Higher

Broiler meat production in fourth-quarter 2007 is forecast at 9.125 billion pounds, 3.7 percent higher than a year earlier. The higher fourth-quarter 2007 production is expected to be driven by both a higher number of birds slaughtered and higher average weights. U.S. broiler production in third-quarter 2007 was 9.105 billion pounds, up 2.5 percent over the same period in 2006. The third-quarter increase in broiler meat production was the first since the second quarter of 2006. In thirdquarter 2007, both the number of birds slaughtered (up 1.9 percent) and the average liveweight (up 0.9 percent) were higher than a year earlier.

With generally higher prices for most broiler products in 2007, processors have increased the number of chicks placed for growout. With the expected expansion in the number of broilers, the forecast for 2008 broiler meat production was increased to 36.85 billion pounds, or 325 million pounds over the earlier estimate. On a percentage basis, the growth is expected to be stronger in the first half of 2008, due to the declines in production in first-half 2007. The increase in production, combined with somewhat higher exports, is expected to put domestic 2008 per capita broiler consumption at 86.8 pounds, just below the 87.1 pounds estimated for 2006.

The weekly broiler hatchery report showed that over the last 5 weeks (Oct. 13 through Nov. 10), the number of broiler chicks placed for growout averaged 3.8 percent higher than in the same period in 2006. The 5-week moving average has grown considerably over the last 6 to 8 weeks. In addition, the hatchery data on eggs being set in incubators over the last 3 weeks points toward chick placements in the coming weeks that will continue to be well above the previous year.

Third-Quarter Broiler Ending Stocks Down

In spite of increasing broiler meat production, cold storage holdings for broiler products were estimated at 624 million pounds at the end of third-quarter 2007, down 11 percent from the same period in 2006 and 17 percent lower than at the end of third-quarter 2005. Most of the decline in cold storage holdings comes from lower holdings of leg meat products. At the end of the third quarter, leg quarter holdings were down 31 percent, leg stocks were 46 percent lower, and holdings of thigh meat were down 19 percent.

Cold storage holdings of whole broilers at the end of third-quarter 2007 were 20 million pounds, up 23 percent from the previous year. This increase in cold storage holdings of whole broilers has not yet impacted prices, as whole-bird prices in thirdquarter 2007 were up over 11 cents per pound from the same period in 2006.

Even with a decline in cold storage holdings of parts, prices for most poultry products have fallen over the last several months, but remain well above yearearlier levels. Boneless/skinless breast meat prices in the Northeast market were $1.31 per pound in October, down $0.39 per pound from this year’s peak in May. Even with this decline, boneless/skinless breast meat prices were still 27 percent higher than in October 2006. Prices for leg meat products have also declined over the last 2 to 3 months, but not as much as breast meat, and they are also considerably higher than a year earlier. Prices for leg quarters and thighs in the Northeast market were $0.45 and $0.59 per pound in October, up 54 and 61 percent from a year earlier. With production expected to be higher in fourth-quarter 2007 and in 2008, prices for broiler products are expected to remain under pressure through most of the period.

Egg Prices Continue at High Level

Wholesale egg prices in the New York market averaged $1.30 per dozen in September, 93 percent above a year earlier. After dropping slightly in the first few weeks of October, egg prices ended the month in the mid $1.20’s per dozen. Nationally, retail prices have also risen, but not quite as steeply as wholesale prices. U.S. retail prices averaged $1.83 per dozen in September, an increase of 45 percent from a year earlier.

Wholesale egg prices in fourth-quarter 2007 are forecast to average between $1.18 and $1.22 per dozen, slightly higher than in the third quarter and about $0.30 per dozen higher than the previous year. Egg prices in 2008 are forecast to average between $0.90 and $0.96 per dozen, as gradually expanding production and lower exports put some downward pressure on prices.

Third-quarter 2007 table egg production was 1.596 billion dozen, down 1.7 percent from a year earlier. This is the third quarter in a row where table egg production has been down on a year-over-year basis. With the number of birds in the table egg flock continuing to be smaller on a year-over-year basis, the table egg production forecast for 2008 was reduced to 6.5 billion dozen, a 1.1-percent increase from 2007, but a reduction from earlier expectations. On the other hand, hatching egg production totaled 281 million dozen, up 11 million dozen (4 percent) from thirdquarter 2006. With a larger number of hens in the hatchery flock and a higher number of broiler-type eggs being set in incubators, the forecast for hatchery egg production in fourth-quarter 2007 was increased to 280 million dozen, and the forecast for 2008 was raised by 20 million to 1.13 billion dozen, 2 percent higher than the previous year.

The average number of layers in the table egg flock during every month in 2007 has been below the year-earlier level. During third-quarter 2007, the average size of the table egg flock was 280 million birds, a 1.5-percent reduction from the same period in 2006. The opposite has held true for the hatching egg flock, which for most of 2007 has averaged larger than the previous year. The hatching egg flock is expected to remain larger than the previous year through most of 2008, primarily due to the demands of expanding broiler production.

Third-quarter 2007 egg and egg product exports totaled 58.6 million dozen, up 12.5 percent from third-quarter 2006. Much of the increase in exports in the third quarter was due to higher shipments to Hong Kong, Japan, and China. Shipments to these countries were at least 20 percent higher than the previous year. Over the first three quarters of 2007, total egg and egg product exports have been 190 million dozen, with a value of $221 million, an increase of 35 percent in quantity and 31 percent in value.

Broiler Exports Continue Strong in September

After receiving a boost from one of the highest monthly totals ever in June, U.S. broiler exports have been on the rise. September shipments totaled 499 million pounds, a 35-percent increase from the same period in 2006. With a strong finish in September, broiler exports in the third quarter of 2007 are (1.493 billion pounds) up 20 percent from a year earlier. Broiler shipments in the first 3 quarters of 2007 totaled 4.181 billion pounds, while shipments for the same period in 2006 totaled 3.801 billion pounds.

The rise in broiler exports in September was due primarily to larger shipments to Russia, China, Angola, and the Caribbean Islands compared with 2006. Shipments to Russia, the largest market for U.S. broilers, totaled 158 million pounds (up 46 percent), while shipments to Hong Kong/China, the second-largest U.S. market, totaled 73 million pounds, 74 percent higher than the shipments in September 2006. Exports to Angola were 22 million pounds, compared with almost 17 million pounds in September 2006. The Caribbean Islands have been receiving larger shipments of broiler meat from the U.S. as well. September shipments to the Caribbean Islands totaled 27 million pounds, 23 percent higher than in the previous year.

Outside of these thriving markets, broiler shipments to other markets, such as the Baltic countries and South Korea, have plummeted and experienced sporadic increases and decreases in broiler shipments over the last year. Shipments to the Baltic countries totaled 30 million pounds in September 2006, and dropped to 14 million pounds this September, a 53 percent decline. Similarly, exports to South Korea totaled 4 million pounds in September 2007, a 61-percent decrease in shipments from the previous year.

The value of broiler shipments has been on the rise in 2007. Reasons for this boost in total value are due to relatively high broiler meat prices and higher export volumes. Despite relative strength in leg-quarter prices, a weaker dollar and robust economic growth in many importing countries is likely helping support exports. In the first 3 quarters of 2007, the value of broiler exports reached $1.95 billion, a 47- percent increase from the same period in 2006.

Broiler shipments in the fourth quarter of 2007 are expected to reach 1.4 billion pounds, similar to exports in the same period in 2006. Because broiler meat prices are higher than they were last year and are expected to remain so in the fourth quarter, no changes in broiler exports are anticipated.

Turkey Exports Up Slightly

Turkey exports in September were 50 million pounds, up 2 percent from the same period in 2006. Mexico continues to be the largest market for U.S. turkey exports, with shipments that totaled 25 million pounds, a 4-percent drop from a year ago. Shipments to Russia, the U.S.’s second-largest market, have also fallen about a halfmillion pounds from the same period in 2006, while shipments to Canada increased by 44 percent during the same period. Shipments to China, the Caribbean, and a number of smaller markets helped make up the difference.

Turkey shipments during the first 9 months of 2007 totaled 407 million pounds, a 3- percent drop from the previous year. The value of turkey exports was much higher than 2006, mainly due to high prices. Turkey shipments in the fourth quarter are estimated at 155 million pounds, a 3-percent increase from 2006.

Further Reading

- You can view the full outlook report by clicking here.

November 2007