Poultry Outlook Report - September 2004 - By U.S.D.A., Economic Research Service - This article is an extract from the September 2004: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. The report indicates that Broiler meat production is up slightly but growth in chick placements is expected to slow.

Composite Broiler Price Percent change from previous month

Broiler production in 2004 is expected to increase about 4 percent over a year ago based on broiler hatchery data. However, the growth in chick placements is expected to slow later this year in response to the falling broiler prices. Broiler production in 2005 is expected to increase about 3 percent above a year earlier. Over the last 2 months (July and August), prices for almost all broiler products have fallen sharply.

While average prices for most broiler parts were considerably higher than a year earlier in the first half of this year, current prices for many parts are only slightly higher or below their year-earlier levels.

Broiler Production Estimate Increased

Retail Turkey Price Percent change from previous month

The U.S. broiler production estimate for third-quarter 2004 has been increased to 8.8 billion pounds, up 25 million pounds from the previous estimate. This is a 4.1- percent increase compared with a year earlier and reflects an expected upward turn in the number of birds slaughtered and continued growth in their average weight.

The broiler meat production estimate for the fourth quarter has also been increased and is now 8.6 billion pounds. This is a seasonal decline from the third quarter, but it is 4.1 percent higher than the same period in 2003. Throughout July and August, the number of chicks being placed for growout ranged between 2.5 and 5.6 percent higher than the previous year. This pattern is expected to change slightly going into the fourth quarter, with the growth in chick placements averaging slightly lower due to the recent decline in prices for most broiler products.

Over the last 2 months, prices for almost all broiler products have fallen strongly. While average prices for most broiler parts were considerably higher than a year earlier during the first and second quarters of 2004, prices for many parts are now only slightly higher or below their year-earlier levels. Prices for whole birds are still higher than the previous year, but prices for boneless/skinless breasts dropped over 70 cents a pound between June and August and in August averaged slightly less than the previous year.

Broiler Exports Lower in Second Quarter; Third Quarter Also Forecast Down

Weekly Broiler Slaughter Percent change from last year

Second-quarter 2004 broiler exports totaled 1.008 billion pounds, down 14 percent from the same period in 2003. The chief reason for the reduction is continued low shipments to Asian countries, primarily Hong Kong/China, Korea, and Japan. Over the first half of 2004, exports to these markets totaled only 141 million pounds, well below the 459 million pounds exported in the same period in 2003.

Partially offsetting the decline in shipments to these Asia markets have been strong exports to both Canada and Mexico. Exports to Canada were 26-percent higher in the first half of 2004, and exports to Mexico totaled 195 million pounds, 21 percent higher than the previous year.

In July, broiler exports totaled 407 million pounds, considerably higher than the last several months, but still down slightly from July 2003. The increase from the last several months is mostly attributable to higher shipments to Russia, but also to higher exports to countries such as Cuba, Turkey, and Georgia.

The export forecast for the third and fourth quarters was reduced by 50 million pounds a piece to 1.050 and 1.1 billion pounds. Lower shipments to Asia are the chief cause of the reduction. The lower shipments to Asia are expected to be partially offset by higher exports to a number of other markets due to the reduction in the price of leg quarters. In the Southern market, leg quarters averaged 26.5 cents per pound in August, down 5.5 cents per pound from June and 1 percent below a year earlier.

Turkey Production and Stocks Down, Prices Higher

Weekly Turkey Slaughter Percent change from last year

Over the first 7 months of 2004, U.S. turkey production totaled 3.13 billion pounds, down 5.5 percent from the same period in 2003. Although turkey exports have also declined (down 19 percent in the first half of 2004 compared with the first half of 2003), they have been more than offset by the lower production, resulting in declining cold storage stocks of turkey (whole and products).

Turkey exports turned upward in July, with shipments totaling 40.8 million pounds, up over 5 million pounds from July 2003. Most of the increase was due to larger exports to Mexico.

Cold storage estimates at the beginning of August place turkey stocks at 603 million pounds, down 17 percent from a year earlier. The decrease in turkey stocks is almost evenly divided between whole birds (down 16 percent) and stocks of turkey products (down 17 percent). The decline in stocks along with lower production has placed upward pressure on turkey prices.

In August, the average price for a whole hen turkey in the Eastern market was 73.2 cents per pound, up 27 percent from the previous year. Prices for whole hens in the third and fourth quarters are expected to remain considerably higher than in the same period in 2003, as poult placements continue to point towards lower turkey production.

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For more information view the full Livestock, Dairy and Poultry Outlook - September 2004 (pdf)

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