Summary

Poultry: The forecast for US broiler meat production in 2011 was decreased slightly to 37.4 billion pounds, 1.4 per cent higher than in 2010, with the reduction coming in the first quarter. Even with strong growth in broiler meat production expected in first-quarter 2011, the estimates for broiler ending stocks were lowered. The combination of small or no increases in production in the remainder of 2011, lower stock levels, and support from higher livestock prices is expected to place upward pressure on most broiler product prices.

Turkey production in January and February was 899 million pounds, up six per cent from the previous year. Expected slower production growth for the remainder of 2011 and lower cold storage holdings are expected to exert upward pressure on turkey prices. Whole bird prices for first quarter 2011 were up 19 per cent from a year earlier.

Poultry Trade: February broiler and turkey shipments were up from a year ago. Broiler shipments totalled 514 million pounds, an increase of 12 per cent from February 2010 shipments. Turkey shipments totalled 53 million pounds, a 36 per cent increase from last year.

Poultry

Broiler production revised downward in first quarter

The forecast for first-quarter 2011 broiler meat production was revised downward slightly to 9.2 billion pounds, 5.3 per cent higher than the previous year. The revision was due to lower than expected weight gains in much of March. Broiler meat production expanded sharply in January, up 10.5 per cent (helped by one additional slaughter day). However, meat production growth in February (up 4.1 per cent) was due primarily to higher average weights at slaughter (up 3.2 per cent). Preliminary estimates point toward only a small increase in the number of birds slaughtered in March, with most of the growth again coming from continued gains in bird weights. For the remaining three quarters of 2011, broiler meat production is expected to average about even with the previous year as production adjusts to sharp feed cost increases.

Over the first two months of 2011, broiler meat production totaled 6.0 billion pounds, up seven per cent from a year earlier. This increase in meat production was the result of the combined effect of a higher number of broilers being slaughtered (up 3.6 per cent) and a 3.2 per cent increase in their average live weight to 5.81 pounds. While the amount of broiler meat produced was up by 10.5 per cent in January compared with the previous year, the meat production increase fell to 4.1 per cent in February. The March year-over-year increase in broiler meat production is expected to be even smaller.

Even with the increases in meat production, broiler stock levels have fallen rapidly over the last several months. Ending first-quarter 2011 broiler stocks are forecast at 665 million pounds, down 108 million pounds from the end of 2010 but still 12 per cent above a year earlier. At the end of February, cold storage holdings were 681 million pounds, down 12 per cent from the previous year. While changes in stock reporting methods make year-over-year comparisons difficult, between January and February stocks of most leg meat products declined, but were partially offset by gains in stocks of breast meat and wings. The estimates for broiler ending stocks for the second and fourth quarters were also revised downward.

Weekly estimates of broiler eggs in incubators and chick placements in the NASS Broiler Hatchery Report point toward a continuing slowdown in the growth in the number of eggs being placed in incubators and the number of chicks being placed for grow-out. Over the last five weeks (5 March to 2 April), the number of eggs placed in incubators averaged 208 million, 1.2 per cent higher than during the same period the previous year. During the same period, the number of chicks placed for grow out averaged one per cent more than in the previous year. Chicks placed for grow-out in late March and early April will likely be ready for slaughter in early to mid-May (based on an average grow-out time of seven to eight weeks).

In first-quarter 2011, the 12–City price for whole broilers averaged 77.9 cents per pound, down 5.3 per cent from the previous year. Although the first quarter price was down from the previous year, prices for whole birds have started moving higher with the March price averaging 82 cents per pound. Overall March prices in the Northeast region, compared with the previous year, averaged lower for breast meat products and higher for leg meat products. The March price for boneless/skinless breast was $1.32 cents per pound, down nine per cent from the previous year.

The March price for boneless/skinless thighs was $1.16 cents per pound, an increase of 23 per cent from March 2010, and for that same period, prices for whole thighs rose by 32 per cent. Prices for many broiler products are expected to strengthen over the next several months due to several factors. Firstly, integrators have slowed the placement of chicks for grow-out in an attempt to lower supplies and raise prices enough to cover the large increases that have occurred in both feed and energy costs. Second, prices are also expected to be strong for both beef and pork products, as supplies are tight in those industries. These factors are expected to place upward pressures on broiler prices but they will be countered by less-than-robust general economic conditions. While US economic conditions appear to be gradually improving, unemployment rates are expected to remain relatively high in 2011.

Turkey production up slightly in 2011

US turkey meat production is estimated at 5.7 billion pounds in 2011, up less than one per cent from the previous year. The increase in turkey meat production is expected to come from a higher number of birds slaughtered, as average weights are not expected to change greatly. Over the first two months of 2011, turkey meat production totalled 899 million pounds, up six per cent from the same period in 2010. During January and February, the number of turkeys slaughtered rose by five per cent from the same period in the previous year and average live bird weights were 30.7 pounds, about one per cent higher than during January and February of 2010.

At the end of February 2011, cold storage holdings of turkey products totalled 296 million pounds, down 13 per cent from the previous year. There were declines in cold storage holdings of most turkey products. Cold storage holdings of whole birds at the end of February were down 19 per cent from the previous year to 122 million pounds, and cold storage holdings of turkey parts totalled 174 million pounds, down nine per cent from the previous year. Cold storage holdings for turkey are expected to remain below year-earlier quantities through the first half of 2011 but to average higher than the previous year’s level in the second half of 2011, chiefly due to smaller exports.

After declining slightly in late 2010 and early 2011, prices for whole turkeys have begun to be pressured higher by slowing gains in production, relatively low stock levels and strong exports. The national price for frozen whole hens was $0.90 per pound in first-quarter 2011, up 19 per cent from first-quarter 2010, which in turn was seven per cent higher than in first-quarter 2009. The March average for frozen whole hens was $0.92 per pound. The combination of only small gains in turkey production and lower stocks is expected to place upward pressure on whole bird prices, keeping them above year-earlier levels throughout 2011, and the average for 2011 is forecast at $0.93 to $0.98 per pound, up from $0.90 per pound in 2010.

Table egg production up, hatching egg production lower in 2011

The forecast for first-quarter 2011 table egg production was lowered slightly to 1.62 billion dozen eggs. This is down 10 million dozen from the previous estimate, but up almost one per cent from first-quarter 2010.

The forecast for fourth-quarter 2011 was reduced by 20 million dozen to 1.67 billion but the overall 2011 production remains unchanged at 6.6 billion dozen, slightly less than one per cent more than the previous year. With broiler meat production forecast to be up only slightly in the first half of 2011 and somewhat lower in the second half, hatching egg production is forecast at 1.06 billion dozen, down 1.1 per cent from the previous year. In February, the number of hens in the table and hatching egg flocks were both lower. The number of table egg hens was down fractionally from the previous year and the number of hatching hens was down 1.4 per cent, although the number of egg-type hens in the hatching flock was up 1.5 per cent from February 2010. As with the other livestock industries, egg producers will be pressed to get product prices to a point that covers the additional production costs from higher feed prices.

Eggs prices 16 per cent lower in first quarter

The wholesale price for one dozen large eggs in the New York region averaged $1.06 in first-quarter 2011, down 16 per cent from first-quarter 2010. With the Easter holiday late in April this year, egg prices began to strengthen seasonally at the very end of March and are expected to remain strong through the first three weeks of April and then decline seasonally starting just after the Easter holiday. The late Easter holiday is expected to boost egg prices in the New York market somewhat for second-quarter 2011, and prices are expected to be $0.89 to $0.93 per dozen, compared with $0.83 per dozen for the same period in 2010.

Egg exports higher in February

In February, egg and egg product exports totaled 21.8 million dozen, 15 per cent higher than a year earlier. Shipments to Japan and Hong Kong, traditionally two of the top three export markets, were both higher than in the previous year. Shipments to Korea continue to be much stronger than the previous year and in February accounted for much of the increase in total exports. Shipments to Korea during the first two months of 2011 were 652 per cent higher than in the same period in 2010. The sharply higher exports to Korea were influenced by reductions in Korean pork supplies due to FMD-related hog culling. These gains in exports were partially offset by reduced shipments to a number of EU markets. In early 2010, egg product exports to EU markets had been exceptionally strong. A large proportion of the exports to the EU countries were likely be used by their food processing industry. While shipments to Hong Kong so far in 2011 have been higher, exports to China have fallen sharply (down 89 per cent).

Poultry Trade

Broiler shipments up in February

February broiler shipments gave the first-quarter total volume a big push in 2011. Broiler shipments in February 2011 totalled 514 million pounds, 12 per cent larger than last February. The major difference is the sizeable shipments exported to the Philippines and Korea. Shipments to the Philippines increased 102 per cent from a year ago, while shipments to Ukraine increased more than 97 per cent. Other country destinations, such as Mexico and Taiwan, play pivotal roles in the surge of broiler meat exported by the US. One of the key reasons for this surge in broiler shipments is a depreciation of the dollar. In addition to these countries, shipments to Russia were up slightly. Russia is the largest US broiler meat destination, averaging 57.6 million pounds each month over the last year. When broiler meat is shipped to Russia and the volume exceeds the monthly average shipment, US total broiler shipments are normally greater than 600 million pounds for the month.

Turkey shipments continue strong in February

Turkey shipments in February 2011 increased 36 per cent from a year earlier. A total of 53 million pounds of turkey meat were shipped, with Mexico accounting for 57 per cent (30 million pounds). China (mainland) increased its imports of US turkey meat 134 per cent. Other major turkey destinations, such as Hong Kong, the Dominican Republic and Canada, also were not strong contributors to the US expansion in turkey shipments. Of the three countries, Canada had the largest increase in shipments from last year. Turkey shipments to Hong Kong decreased 14 per cent, while shipments to the Dominican Republic decreased by 48 per cent. In February 2011, Mexico, China, Hong Kong, the Dominican Republic and Canada accounted for 78 per cent of the US total turkey shipments, which is five per cent more than the combined shipments in February 2010.

Further Reading

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April 2011