Poultry Outlook Report - August 2003 - By U.S.D.A., Economic Research Service - This article is an extract from the August 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry industry data. This report indicates, broiler meat production during the second half of 2003 is expected to be slightly higher than during the same period in 2002.

Broiler Production Down 0.4 Percent

Composite Broiler Price Percent change from previous month

Weekly Broiler Slaughter Percent change from last year

Broiler production during the first half of 2003 was about 16 billion pounds, down less than 1 percent from the same period in 2002. Production during the second quarter of 2003 was down only slightly from the previous year.

The decrease in broiler meat production has been the result of a lower number of birds going to slaughter. Over the first half of 2003, the number of broilers slaughtered was 4.2 billion, down 1.9 percent from the same period a year earlier.

The decline in the number of birds being slaughtered has been partially countered by increasing weights. Average broiler weight at slaughter in the first half of 2003 has been 5.19 pounds, up 1.6 percent from the previous year.

Broiler meat production during the second half of 2003 is expected to be slightly higher than during the same period in 2002, as broiler companies respond to the gradual strengthening in most broiler prices. The weekly numbers of chicks being placed for growout are beginning to approach year earlier levels, and average weights continue to be 1-to-2 percent higher than the previous year.

Broiler Exports Down, Forecast Uncertain

Over the first 6 months of 2003, broiler exports have been 2.37 billion pounds, down less than 1 percent from the same period in 2002. The chief reasons for the lower shipments were lower exports to Russia, Hong Kong/China, and Mexico.

Exports to Russia were 675 million pounds in the first half of 2003, 13 percent lower than the previous year. Much of the decline has come from the enactment of a quota on imports of poultry products and earlier uncertainties about the structure of the quota and how it would be allocated. Falling exports to Hong Kong/China have reflected the SARS outbreak and its impacts on the Hong Kong economy. Poultry shipments to Mexico have been depressed (down 15 percent) as the Mexican economy has slowed and discussions on placing a tariff-rate quota on imports of U.S. frozen leg quarters have created uncertainties.

The U.S. broiler export outlook over the second half of 2003 continues to have a number of problems. Although the Russian quota for U.S. poultry imports seems set through the remainder of 2003, there are still a number of questions about its composition for 2004. In Hong Kong, the chief questions are whether there will be any long-term economic effects from the SARS outbreak and whether imports will return to levels seen in the past. With the conclusion of bilateral discussion with Mexico about imports of U.S. leg quarters, exports are expected to strengthen to levels closer to those seen in past years. While the gradual strengthening of prices for export-oriented products as leg quarters and wings seems to indicate a growing export demand, the current situation differs from previous export-market driven price increases due to falling U.S. broiler production in the first half of 2003.

Turkey Production Flat in First-Half 2003

Retail Turkey Price Percent change from previous month

Turkey production over the first 6 months of 2003 was 2.8 billion pounds, only fractionally lower than during the same period in 2002. The decrease in production is due to the same set of factors as the decrease in the broiler industry. The total number of turkeys going to slaughter in the first half of 2003 was down about 1 percent, but was mostly offset by a 0.7-percent increase in the average liveweight of turkeys (27.4 pounds) during this period.

The forecast for the second half of 2003 is for a slight decline in production compared with the previous year. The number of poults placed for growout during the first 7 months of 2003 has totaled 174.8 million, down 1.6 percent from the same period in 2002. In addition, lower prices for whole birds and many turkey parts, along with large stocks in cold storage, has dampened any enthusiasm for increases in production.

Turkey Exports Fall by 9 Percent

Weekly Turkey Slaughter Percent change from last year

Over the first 6 months of 2003, U.S. turkey exports totaled 216 million pounds, down 9 percent compared with the previous year. The quota on poultry imports into Russia has pushed exports to that market down by 60 percent compared with the previous year. Export shipments have also fallen heavily to Mexico and Hong Kong. The decline in shipments to these major markets has been partially offset by higher demand in Taiwan and Canada. Also exports to South Africa have strengthened significantly, with imports during the first half of 2003, at 6.8 million pounds, already higher than shipments for all of 2001 or 2002.

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Source: Livestock, Dairy and Poultry Situation and Outlook - U.S. Department of Agriculture, Economic Research Service - August, 2003