Poultry Outlook Report - April 2004 - By U.S.D.A., Economic Research Service - This article is an extract from the April 2004: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. The report indicates that red meat, poultry, and dairy prices are showing strength.

First-quarter cattle, hog, broiler, milk, and egg prices averaged above a year earlier. The price increases are in the face of export restrictions currently affecting beef and broilers and larger-than-year-earlier pork, broiler, and egg production. These higher prices are increasing producers’ returns, but sharply rising feed costs (mainly corn and soybean meal) are eroding those higher returns.

Composite Broiler Price Percent change from previous month

Even with increased production, almost all wholesale broiler prices are considerably higher than in the previous year. The average 12-City price for whole broilers was 73.2 cents per pound in the first quarter of 2004, an increase of over 20 percent from the previous year. Prices for broiler parts are also higher. Some averages for the first quarter in the Northeast market are: boneless/skinless breasts, 179.7 cents per pound, up 28 percent; leg quarters, at 34.3 cents per pound, up 69 percent; whole wings, 119.2, up 67 percent; and whole thighs at 46.6 cents a pound, up 45 percent. While the price changes may be slightly different in other markets, broiler prices have risen strongly for almost all products.

Weekly Turkey Slaughter Percent change from last year

Lower turkey production coupled with higher prices for almost all animal products have led to strong turkey price increases from the previous year. The wholesale price for whole turkeys has only had a small upturn (2 percent higher), but prices for turkey parts are much stronger than at this time in 2003. Over the first 2 months of 2004, prices for boneless/skinless turkey breast averaged $1.55 per pound, up 30 percent from the previous year.

Other turkey products rose even more, drum meat prices were up over 150 percent, wing prices were almost 140 percent higher, and prices for mechanically deboned meat (MDM) turkey were at 29 cents per pound, up 78 percent. With production lower and strong prices expected for competing meats, Turkey part prices are expected to remain above year-earlier levels through the first three-quarters of 2004.

Broiler Prices Up Sharply

Even with increased production, almost all wholesale broiler prices are considerably higher than in the previous year. In the first quarter of 2004, the average 12-City price for whole broilers averaged 73.2 cents per pound, an increase of over 20 percent from the previous year. Prices for broiler parts are also higher. Some averages for the first quarter in the Northeast market are: boneless/skinless breasts, 179.7 cents per pound, up 28 percent; leg quarters, at 34.3 cents per pound, up 69 percent; whole wings, 119.2, up 67 percent; and whole thighs at 46.6 cents a pound, up 45 percent.

While the price changes may be slightly different in other markets, broiler prices have risen strongly for almost all products. Continued price strength for broiler products through the remainder of the year will be needed to help offset a sharp increase in corn and soybean meal prices. Corn and soybean meal make up the bulk of poultry feed which is the largest variable cost in broiler production. Corn prices are estimated to be 5-14 percent higher this crop year (2003/2004), and soybean meal prices are expected to increase 46-60 percent.

Weekly Broiler Slaughter Percent change from last year

Over the first 2 months of 2004, broiler production totaled 5.28 billion pounds, up 1.6 percent from the same period last year. Most of the production increase is due to a 1.2-percent increase in the number of broilers slaughtered. The average liveweight of birds at slaughter was also higher, but up only 0.6 percent from the previous year. Firstquarter 2004 broiler production is estimated at 8.18 billion pounds, up 110 million pounds from earlier expectations and 5-percent higher than in firstquarter 2003. Most of the first quarter 2004 estimated production growth is due to March having 23 slaughter days compared with only 21 slaughter days in 2003.

The increase in broiler production has come at a time when the average size of the broiler laying flock is smaller than the previous year. According to National Agricultural Statistics Service reports, the average size of the broiler laying flock over the first 2 months of 2004 was just over 56 million birds, down 0.8 percent from the previous year.

Although the number of hens in the laying flock are down slightly, a greater percentage of the eggs are going to hatcheries so that the total number of chicks hatch for growout is higher. Over the last 5 weeks (through 4/03/04) the number of broiler chicks being placed for growout was estimated at an average of 171 million chicks per week, 2.1- percent higher than the same period in the previous year. This growth in the number of chicks being placed for growout points toward a continued expansion in broiler production through the second quarter, with production estimated at 8.56 billion pounds, 3.5-percent higher than in the second quarter of 2003.

Turkey Parts Price Increases Outpace Whole Bird Prices

Retail Turkey Price Percent change from previous month

With production lower and prices for almost all animal products higher, turkey parts prices have increased strongly from the previous year. The wholesale price for whole turkeys has only had a small upturn (2-percent higher), but prices for turkey parts are much stronger than at this time in 2003. Over the first 2 months of 2004, prices for boneless/skinless turkey breasts averaged $1.55 per pound, up 30 percent from the previous year. Other turkey products rose even more, drum meat prices were up over 150 percent, wing prices were almost 140 percent higher, and prices for mechanically deboned meat (MDM) turkey were at 29 cents per pound, up 78 percent. Turkey prices are expected to remain above year-earlier levels through the first three quarters of 2004.

Over the first 2 months of 2004, turkey production was 831 million pounds, down 9 percent from the same period in 2003. Most of the production decrease is a result of an 8-percent decline in the number of turkeys being slaughtered. The average liveweight of turkeys at slaughter averaged 27.2 pounds, this is down 1.7 percent from the previous year. First-quarter 2004 turkey production is estimated at 1.31 billion pounds, down 70 million pounds from the previous year (5-percent lower).

Turkey production for all of 2004 is expected to be lower than the previous year, as poult placements have been running consistently lower than a year earlier. Over the first 2 months of 2004, poult placements totaled 46.2 million birds, down 6.2 percent from the same period in 2003. Turkey meat production in 2004 is expected to be 5.53 billion pounds, down 2 percent from 2003.

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Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - April 2004