Poultry Outlook Report - December 2003 - By U.S.D.A., Economic Research Service - This article is an extract from the December 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry industry data. This report indicates that turkey exports are higher.

Retail Turkey Price Percent change from previous month

Fourth-quarter federally inspected broiler slaughter is forecast at 8.2 billion pounds, an increase of 3 percent from the same period last year. Increased fourth-quarter production is expected to come from gains in the number of birds slaughtered and higher average weights.

U.S. broiler exports for the third quarter of 2003 were 1.2 billion pounds, down 2 percent from the previous year. This, coupled with a lower forecast for fourthquarter exports, lowers the estimate for 2003 to 4.8 billion pounds, about even with 2002.

The wholesale N.Y. price of grade A large eggs is expected to average more than $0.88 per dozen for 2003, an increase of almost 32-percent over last year. Prices in the fourth quarter are expected to average almost $1.13 per dozen, 49-percent above last year. Higher prices are attributable to both demand and supply factors: strong seasonal demand and higher prices for substitute animal proteins on the demand side; and, slightly lower production from disease problems and compliance with animal welfare restrictions on the supply side.

Production is expected to increase about 1 percent next year, but strong consumer demand will keep the average wholesale price for the year more than 3-percent above 2003.

U.S. Broiler Production Moving Higher

Weekly Broiler Slaughter Percent change from last year

The estimate for broiler production in 2004 was increased by 160 million pounds to 33.6 billion pounds, as egg and chick placements have been running several percentage points above the previous year. The weekly Broiler Hatchery report continues to show increases in the numbers of broiler chicks being placed for growout. During the last 8 weeks (Oct. 18 through Dec. 6), the number of broiler chicks placed each week for growout has averaged 160 million, up 2.5 percent from the same period the previous year. The data for egg placed in incubators indicate that chick placements can be expected to continue to be above year-earlier levels as the number of eggs placed has been up by an average of 2 percent over the last 3 weeks.

U.S. broiler production in fourth-quarter 2003 is estimated at 8.2 billion pounds, about 3 percent higher than in fourth-quarter 2002. Broiler production in October was 3.04 billion pounds, an increase of 2.8 percent from a year earlier, and slaughter in November and December is expected to be higher than the previous year. This follows a third-quarter where production increased 2.5 percent compared with a year earlier. This gradual increase in production is expected to come from a slightly higher number of birds going to slaughter and continued growth in their average weights.

Broiler Stocks Down Sharply

Composite Broiler Price Percent change from previous month

With little or no growth in broiler production over the first half of 2003, stocks of broiler products held in cold storage have declined throughout the year. The estimate of cold storage holdings of broiler products at the end of October was 599.2 million pounds, down 30 percent from a year earlier and 5 percent lower than at the end of October 2001.

With lower stocks and only a small increase in production over the first 10 months of the year, domestic broiler prices have continued to strengthen. The November 12-city average for whole broilers was 64.5 cents a pound, up 21 percent from the previous year. Prices for most broiler parts have increased even faster. Prices for leg quarters were 29.6 cents per pound in November, up 64 percent from the previous year. Wing prices have risen 106 percent from the previous November to 94.13 cents per pound. Broiler prices are expected to remain strong over the next several months as a recovering economy, a brighter export outlook, and high prices in the beef and pork sectors combine to strengthen demand.

U.S. broiler exports in October 2003 were higher than expected at 553 million pounds, leaving exports for the first 10 months of the year at 4.1 billion pounds, 1 percent higher than in the same period in 2002. While domestic prices for bulk leg quarters in October were much stronger than the previous year, much of this strength is from domestic factors.

While overall exports have increased, shipments to the two largest markets are lower than the previous year. Over the first 10 months of 2002, broiler exports to Hong Kong have totaled only 257 million pounds, down more than 50 percent from the same period in the previous year. The decline in broiler exports to a number of Asia markets was offset by higher shipments to smaller markets and the NIS countries. Exports have also been growing to Mexico over the last several months and through October are 3 percent higher than the previous year.

Turkey Production Flat, Exports Higher

Weekly Turkey Slaughter Percent change from last year

In November, the three-region price for whole turkeys (hens and toms) averaged 65.5 cents per pound, up 2 percent from the previous year. Most of the increase came from higher prices for toms as prices for whole hens were about even with the previous year. Wholesale prices for whole birds and parts are expected to remain close to their present levels as stocks of turkeys (whole birds and parts) at the end of October were considerably lower than the previous year, down 8 percent.

Turkey production during the first 10 months of 2003 has totaled 4.8 billion pounds, making it almost exactly even with the previous year. While the number of birds slaughtered is down slightly from a year earlier, average weights are higher. However, just the opposite was true in October as the number of birds rose and the average weight declined slightly. Production over the next several Economic Research Service, USDA Livestock, Dairy, & Poultry Outlook/LDP-M-114/December 17, 2003 13 months is expected to remain at or slightly below the previous year. Over the last 6 months, (May through October), the number of poults placed for growout has been down 1.4 percent from the same period in 2002.

U.S. turkey exports strengthened in the third quarter and continued to be strong in October totaling 50 million pounds, up 39 percent from the previous year. Most of the increase has come from an expansion in exports to Mexico. Over the first 6 months of 2003, exports to Mexico totaled 101 million pounds which was 9 percent less than in the previous year. During the third quarter exports to Mexico totaled 65 million pounds and shipments in October were an additional 29 million pounds, pushing exports for the first 10 months of 2003 to 397 million pounds, 6 percent higher than the previous year. With higher exports and no increases in production forecast, turkey prices are expected to gradually increase over the next several months, especially with relatively high prices expected in the rest of the livestock sector.

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For more information view the full Livestock, Dairy and Poultry Outlook - December 2003 (pdf)

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