Summary

The forecast for US broiler meat production in 2010 was increased by 375 million pounds to 36.3 billion pounds, two per cent higher than in 2009. With a large decline in broiler production expected in first-quarter 2009, the estimates for broiler ending stocks were also reduced. Even with expected higher production and lower exports, wholesale prices for many broiler products have continued to remain above the previous year.

Turkey production in January and February was 850 million pounds, down seven per cent from the previous year. Lower production and lower cold storage holdings have placed upward pressure on turkey prices. Whole bird prices for first-quarter 2010 were up seven per cent from a year earlier.

Broiler Production Revised Upward

The forecasts for broiler meat production were revised upward for all four quarters of 2010. The upward revisions total 375 million lbs (lb) and were spread across the quarters as follows: 100 million lbs in the first quarter, 125 million in the second, 100 million in the third, and 50 million lbs in the fourth. The new forecast for 2010 is 36.3 billion lbs, up two per cent from 2009 but still two per cent below 2008. Relative to 2009, the revisions call for the largest increases in broiler meat production in the first and fourth quarters. The increase in the first quarter is due largely to the strong drop in production in first-quarter 2009. The fourth-quarter 2010 increase is expected to stem from a gradually improving economy and moderating grain prices.

Over the first two months of 2010, broiler meat production has totalled 5.56 billion lbs, down fractionally from the same period in 2009. The decrease in meat production in the first two months has come exclusively from a smaller number of broilers being slaughtered (down 2.2 per cent), as the average liveweight of broilers at slaughter during the first two months of 2010 (5.63 lbs) was 1.4 per cent higher than the previous year. Most of the slaughter decline was registered in January, which had one slaughter day fewer.

With the anticipated higher production and lower exports, the broiler stocks at the end of first-quarter 2010 are forecast at 640 million lbs, up 24 million lbs from the end of 2009 and 3.2 per cent higher than at the end of first-quarter 2009. At the end of February, cold storage holdings were 604 million lbs, down 4.2 per cent from the previous year. At this point, higher stocks of items like drumsticks and thigh meat were offset by lower holdings for most other broiler products. With the expected increases in broiler meat production, cold storage holdings are expected to remain above the previous year throughout 2010.

In first-quarter 2010, the 12–City price for whole broilers averaged 82.2 cents per lb, up three per cent from the previous year. Most of the price increase was due to higher prices (84 cents per lb) in March compared with less than 82 cents per lb in January and February. Prices for some other broiler products were also moving higher. In March, wholesale prices for boneless/skinless breast meat in the Northeast market averaged $1.44 per lb, five per cent higher than a year earlier. However, prices for most leg meat products were lower, with prices for thigh meat products declining the most. Prices for boneless/skinless thighs and whole thighs were both down over 20 per cent from the previous year. Broiler parts prices are expected to be impacted by a number of market forces over the next several months. On one hand, broiler meat production is expected to be slightly larger, which could be price depressing. On the other, domestic economic conditions appear to be gradually improving, supporting increased demand.

Broiler Exports Down 18 Per Cent in February

US broiler product exports totalled 460 million lbs in February, down slightly over 100 million lbs (18 per cent) from a year earlier. Due to ongoing trade disputes, the decline was attributed to smaller shipments to Russia and China. Exports to Russia in February totalled only 23.2 million lbs, over 80 million less than in February 2009.

So far in 2010, shipments to Russia have been 75 million lbs, about 174 million (down 70 per cent) less than in the same period in 2009. Exports to China were 12.8 million lbs in February 2010, down from 63.7 million a year earlier. Over the first two months of 2010, shipments to China declined to 43 million lbs, down 68 per cent from the previous year. These declines were partially offset by larger exports to a number of countries, notably Mexico, Canada, Hong Kong, Viet Nam and South Korea.

Turkey Production Continues Lower

US turkey meat production is now estimated at 5.5 billion lbs in 2010, down 3.3 per cent from the previous year. The lower turkey meat production is expected to come from a smaller number of birds being slaughtered, as average weights are expected to be up slightly. Over the first two months of 2010, turkey meat production totaled 850 million lbs, down seven per cent from the same period in 2009. During January and February, the number of turkeys slaughtered dropped eight per cent compared with the previous year and average live bird weights were 30.7 lbs, slightly higher than during January and February of 2009.

At the end of February 2010, cold storage holdings of turkey products totaled 346 million lbs, down 25 per cent from the previous year. The decrease includes cold storage holdings of most turkey products. Holdings of whole birds were down 30 per cent from the previous year to 152 million lbs. Cold storage holdings were also lower for turkey parts.

After declining seasonally in late 2009, prices for whole turkeys have remained consistently above the previous year through first-quarter 2010 as both reduced production and storage holdings have put upward pressure on prices. Prices for whole hens in the eastern market averaged 79 cents per lb in first-quarter 2010, up seven per cent from first-quarter 2009. The combination of lower turkey production forecast throughout 2010 and lower stocks starting the year are expected to place upward pressure on whole bird prices, keeping them above year-earlier levels during 2010.

Turkey Exports Down Slightly in February

US turkey exports totalled 38.9 million lbs in February, down only one per cent from the previous year. Smaller shipments to Mexico continue to be the major cause of the decline, with shipments about 2.6 million lbs lower (11 per cent) than the previous year. Shipments were also lower to Canada. Stronger prices in the US for most turkey products, due to lower production, has put downward pressure on exports to Mexico and Canada and has helped fuel a switch from turkey to broiler imports in these countries. Some of the decline to the Mexican market has been offset by stronger exports to China and Hong Kong. While not a large market for US poultry products, broiler and turkey shipments to South Africa have grown significantly so far this year and are expected to continue to be strong through the run-up to the World Cup in June.

Table Egg Production in 2010 Forecast Slightly Higher

The forecast for first-quarter 2010 table egg production was lowered slightly to 1.59 billion dozen eggs, a quantity about even with the previous year.

The forecast for all of 2010 is 6.49 billion dozen, up less that one per cent from 2009. On a quarterly basis, production is expected to be about equal or slightly lower than the previous year in the first and fourth quarters and slightly higher in the second and third quarters. With broiler production expected to expand somewhat in 2010, the forecast for hatching egg production is 1.07 billion dozen, about one per cent higher than in 2009.

Over the first two months of 2010, table egg production was 1.04 billion dozen, about equal with the same period in 2009. In the first two months of 2010, the number of hens in the table egg flock averaged 281 million birds, down about one per cent from the same period in 2009. During January and February the number of meat-type hens in the hatchery flock averaged 54.5 million birds, up about one per cent from the previous year.

Eggs Prices 14 Per Cent Higher in First Quarter

The wholesale price for one dozen large eggs in the New York region in first-quarter 2010 was estimated at $1.26 per dozen, up 15 per cent from first-quarter 2009. With the Easter holiday at the very beginning of April this year, egg prices are expected to decline seasonally starting in the first or second week of April. Egg prices in the New York market are expected to be $1.10 to $1.14 per dozen in second-quarter 2010, considerably higher than during the same period in 2009.

Egg Exports Continue Higher in February

In February, US egg and egg product exports totalled 18.9 million dozen, 37 per cent higher than a year earlier. While shipments to Canada, Japan and Hong Kong, which are traditionally the top three exports markets, were smaller, they were more than offset by strong gains in shipments to European Union (EU) countries. Exports to Germany, the United Kingdom, Denmark and the Netherlands have all seen strong gains over the first two months of 2010 compared with a year earlier. A large proportion of the exports to EU countries are egg products, which will likely be used by their food-processing industries. Shipments to China have also been higher, 375 per cent more in the first two months of 2010 than in same period in 2009.

Further Reading

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April 2010