Retail Turkey Price Percent change from previous month

Turkey prices are expected to gradually strengthen in the fourth quarter as production is forecast to be below a year earlier, competing meat prices are high and exports are strengthening.

Fourth-quarter broiler slaughter is forecast at 8.18 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 1.18 billion pounds, down 2 percent from the previous year. This lowers the estimate for 2003 to 4.8 billion pounds, about even with 2002.

On October 1 the number of U.S. egg-type layers declined to 274 million birds, 6.6 million fewer than a year ago. This decline is opposite the fourth quarter seasonal when the flock typically increases to meet holiday demand. Prices of wholesale Grade A large eggs are expected to average about $0.99-1.01 per dozen in the fourth quarter. For 2003, New York wholesale egg prices will likely average 27 percent higher than a year ago. In 2004 prices are expected to be 4-6 percent higher.

Third-Quarter Turkey Production Declines Slightly

U.S. turkey production in the third quarter of 2003 was 1.41 billion pounds, down 0.5 percent from the same period in 2002. The decrease in production came as fewer birds slaughtered (down 0.9 percent) offset an increase in average weights (up 0.9 percent). Federally inspected slaughter in the fourth quarter of 2003 is forecast at 1.48 billion pounds, slightly lower than during the same period last year. The decrease in production is expected to again be due to a combination of a lower number of birds slaughtered and higher average weights.

Third-Quarter Exports Higher Than Previous Year

Weekly Turkey Slaughter Percent change from last year

U.S. turkey exports for the third quarter of 2003 were 130 million pounds up 33 percent from the previous year. This places the estimate for annual 2003 exports at 467 million pounds, an increase of 28 million pounds from last year, but about 20 million pounds lower than in 2001. Exports in September were 50 million pounds, up 38 percent from a year earlier and the highest monthly exports so far in 2003. The increase in exports in September was chiefly due to higher exports to Mexico. Shipments to Mexico in September were 28 million pounds, 89 percent higher than a year earlier. Shipments to Russia and Canada were also higher. The increased trade with these countries helped to offset lower shipments to a number of other countries, especially Hong Kong. Fourth quarter exports are forecast to be slightly higher than the previous year, as U.S. economic growth helps to stimulate the Mexican economy, the largest market for U.S. turkey exports.

Third-Quarter Ending Stocks Lower

Lower third-quarter production together with a modest gain in exports pulled third-quarter ending stocks down. Cold storage holdings of whole turkeys at the end of September were estimated at 384 million pounds, an 8-percent increase from the same period last year. However, the increase was offset by a strong decline in the cold storage holdings for turkey parts. Stocks of turkey parts at the end of September were estimated at 269 million pounds, down 15 percent from a year earlier. Total third-quarter ending stocks for turkey were 653 million pounds, a decrease of almost 3 percent from third-quarter 2002.

October Whole Bird Prices Higher

Slightly reduced domestic production and improving exports pushed whole turkey prices higher in October. The three region average price for whole birds was 64.4 cents per pound, 3 percent higher than October 2002. The price increase was attributed totally to whole toms, as whole hen prices continued lower than a year earlier. Prices for whole birds and parts are expected to gradually strengthen in the fourth quarter as exports to Mexico increase, prices for competing meats are high, and production is forecast to be below a year earlier.

Broiler Production Climbs in Third Quarter

Composite Broiler Price Percent change from previous month

U.S. broiler production in the third quarter of 2003 was 8.45 billion pounds, 2.4 percent above the same period last year. The growth in production was attributed to a small increase in the number of birds slaughtered (up 0.6 percent) and an increase in their average weights (up 1.5 percent). Federally inspected slaughter in fourth-quarter 2003 is forecast at 8.18 billion pounds, an increase of 3 percent over the fourth quarter of last year.

Increased fourth-quarter production is again expected to come from gains in the number of birds slaughtered and higher average weights. The weekly broiler hatchery report shows that over the last 8 weeks (Sept. 13 through Nov. 1), the number of broiler chicks placed for grow-out has increased an average of 1.4 percent compared with the same period last year. The data for eggs placed in incubators over the last 3 weeks points toward continued growth in chick placements--egg numbers placed have averaged 2.9 percent higher than the same 3-week period in 2002.

2003 Broiler Exports Decline Slightly in Third Quarter

U.S. broiler exports in the third quarter of 2003 were 1.18 billion pounds, down 2 percent from the same quarter in 2002. This lowers the annual 2003 export estimate to 4.8 billion pounds about even with the previous year. Exports in September were 374 million pounds, up 18 percent from a year earlier. The increase in September exports was the result of higher shipments to Russia, Mexico, and the NIS countries. However, these increases were partially offset by continued lower shipments to Hong Kong.

Third-Quarter Broiler Ending Stocks Decline

Weekly Broiler Slaughter Percent change from last year

Although the third quarter of 2003 saw the first growth in broiler output, stock levels have continued to decrease. Stocks for broilers held in cold storage as of the end of September were 599 million pounds, 28 percent lower than the third quarter 2002. Broiler parts make up most of cold storage holdings and were down 28 percent from the same period last year. Cold storage holdings of whole broilers were also lower, falling by 11 percent.

Higher domestic production, stronger exports, and lower ending stocks combined to push October 2003 prices higher for most broiler parts. Northeast breast meat prices were up 26 percent over last year, while prices of leg quarters and wings increased 62 and 65 percent compared with October 2002. Prices for whole broilers have also risen and are expected to remain above last year for the remainder of 2003. Prices for broiler parts are generally expected to remain higher through the fourth quarter and into 2004, as stronger exports, a rising economy, and high prices for competing meats are likely to offset expected production increases.

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

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