So far, however, broiler output growth has been quite limited and the latest hatchery numbers suggest that broiler production in May and June will likely be about 1-1.5 per cent higher than a year ago; hardly what you would expect with corn prices down 30 per cent from last year.

Broiler egg sets for the week ending 12 April were up 1.9 per cent from a year ago and for the last six weeks egg sets have been running about 1.2 per cent higher than a year ago. This is in line with the broiler hatchery flock numbers that as of 1 March were up 2.2 per cent from last year.

But even with these modest increases in egg sets the net supply of broiler meat production coming to market in the first three months of the year has failed to increase. Since the beginning of the year, broiler placements have been just 0.2 per cent higher than a year ago.

There is a strong relationship between the number of weekly (lagged) chick placements and broiler slaughter over time (see chart). That relationship appeared to break down in the first three months of the year as weekly broiler slaughter dipped by as much as 2 per cent compared to a year ago (6- wk moving avg.).

We did hear of some disease issues but have not been able to confirm such speculation. We also suspect that cold winter weather across much of the Southeast and a spike in heating costs likely took its toll on the ability of producers to convert chicks into market ready broilers. With supplies of market ready broiler smaller than expected and cold weather taking its toll, broiler weights in have tracked below year ago levels for much of the winter months.

Lower broiler weights and short broiler slaughter during February and March has constrained the supply of broiler meat in recent weeks. Broiler prices were for the most part steady in January and February as cold weather negatively affected consumer demand at foodservice.

With foodservice sales soft, spot markets continued to be well supplied and there was limited price pressure. It all changed in March and April prices appear to be on a steep upward trajectory. Foodservice business has finally come to life, which means raw material purchases are now back to plan.

Retailers, struggling with a spike in beef and pork prices, also are looking at chicken as a less expensive alternative. Sure, retail markets have been well saturated with chicken in recent years but given the triple digit price increases in the price of some pork and beef items, a little more chicken in the meat case still makes sense.

According to USDA, the price of whole broilers in the last six weeks has jumped by almost 20 per cent and it is now 2 per cent higher than year ago prices. Breast meat prices also are up by 30- 40 per cent since mid February and 6-10 per cent higher than last year - and last year we saw a spike in chicken breast prices.

Chicken prices should continue to climb into April and May. After a cold winter, there is a lot of pent up demand at foodservice. Sharply higher prices for competing meats will have end users clamoring to fit more chicken in their offerings.

All this at a time when broiler supplies are basically steady with year ago levels. It should be another good spring for broiler companies and little help for end users looking to escape the vise of escalating meat protein inflation.