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CME: Declines in Broiler Egg Sets Expected to End

11 June 2012

US - The year over year declines in broiler egg sets and chicken placements should come to an end by the end of June, write Steve Meyer and Len Steiner.

Broiler producers have been slowly adding more egg sets in incubators, which is not unusual for this time of year. Come July and August, we will start comparing to the sharp cutbacks put in place last year and our expectation is for egg sets to be 1 – 2 per cent over year ago.

By September and October, which was the bottom in the market last year, egg sets could be as much as 4-5 per cent over last year. Lower feed costs will likely encourage some production increases but it will take probably until the first half of next year for producers to start to increase production capacity.

Feed markets remain volatile. While there is broad expectation for a significant recovery in feed supplies and lower feed prices, $6 corn is not entirely out of the question at this point. Mother Nature has surprised us before.

Also a significant worry for broiler producers is the export situation, with Mexico threatening to impose prohibitive tariffs on US leg quarters and leg meat. This will temper some of the zeal for expansion.




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