Summary

Poultry: Higher broiler chick placements have resulted in an increase in the fourth-quarter 2010 broiler meat production estimate to 9.3 billion pounds and a small increase to the first-quarter 2011 estimate. The higher production is expected to increase stocks. Turkey production rose in October as the number of birds slaughtered was higher. Cold storage holdings for whole turkeys continued to be below those of a year earlier, putting upward pressure on prices.

Poultry Trade: October broiler shipments totalled 670 million pounds, a 10 per cent increase from a year ago, while turkey shipments rose slightly less than one per cent to begin the fourth-quarter.

POULTRY OUTPUT

Broiler Meat Production Up Again in October

Broiler meat production totalled 3.18 billion pounds in October, up 3.6 per cent from the previous year. The increase in meat production would have been even higher, but October 2010 had one fewer slaughter day compared with the previous year. Over the first 10 months of 2010, broiler meat production has increased on a year-over-year basis in eight of those months. The total for the January-October 2010 period was 30.6 billion pounds, 2.9 per cent higher than in the same period a year earlier. In October, the number of birds slaughtered was down slightly from the previous year to 723 million due to one slaughter day fewer. However, the lower number of birds slaughtered was offset by a strong increase in the average live weight of birds at slaughter, up 3.5 per cent to 5.87 pounds. The strong increase in average broiler weights at slaughter is expected to continue in November and December, along with a higher number of birds being slaughtered, especially as November has one more slaughter day than the previous year. Due to these expected changes, the estimate for fourth-quarter 2010 broiler meat production was increased by 100 million pounds to 9.3 billion pounds, 5.4 per cent higher than a year earlier. This will push the annual estimate for 2010 to 36.7 billion pounds. The meat production estimate for first-quarter 2011 was also increased, reaching 9.08 billion pounds, 50 million pounds higher than the previous estimate.

With high corn prices forecast for the remainder of 2010 and for 2011, and with relatively weak prices for most broiler products, broiler integrators are expected to scale back production increases for 2011. Over the last month, there has seemed to be a distinct break in the number of eggs being placed in incubators. During the last four weeks (13 November to 4 December), the total number of broiler eggs placed in incubators for hatching was 819 million, a 1.4 per cent increase from the same period in 2009. This is in contrast to the gains in eggs placed in incubators in the preceding four-week period (16 October to 6 November). During this period, the total number of eggs placed in incubators for hatching was 796 million, a 6.4 per cent gain from the same period in 2009. This pattern of growth in the number of eggs placed in incubators, if translated to growth in the number of birds available for slaughter, would point toward a strong increase in meat production in fourth-quarter 2010 but a much smaller increase later, starting around the middle of first quarter 2011.

Cold storage holdings of broiler products at the end of third-quarter 2010 were revised downward slightly to 678 million pounds. Even with the reduction, this is still 11 per cent higher than a year earlier. With strong gains in broiler meat production expected in fourth-quarter 2010, the forecast for 2010 ending stocks was increased to 725 million pounds, a gain of 109 million pounds from a year earlier (up 18 per cent). Broiler stocks are expected to remain above year-earlier levels through the first half of 2010 but to go below year-earlier levels in the second half of 2011, as smaller gains in production result in a draw-down in stocks and greater use.

The higher boiler production in fourth-quarter 2010 and rising cold storage holdings have put downward pressure on most broiler product prices. The largest declines have been for breast meat, but prices were lower in the fourth quarter for almost all broiler products. For fourth-quarter 2010, prices for whole birds are expected to average 80 to 81 cents per pound, up about 12 per cent from a year earlier.

October Turkey Production Sharply Higher

Turkey meat production in October totalled 524 million pounds, up 3.2 per cent from October 2009. The increase was the result of a 3.3 per cent rise in the number of birds slaughtered, despite one slaughter day fewer in October 2010. However, the average weight at slaughter was down slightly (0.3 per cent) from the previous year to 28.4 pounds. The year-over-year increase in turkey meat production in October is in contrast with declining production in seven of the first nine months of 2010. To date (January to October), turkey meat production has totalled 4.7 billion pounds, 1.4 per cent below the same period in 2009 and 11 per cent lower than in the first 10 months of 2008.

Even with higher meat production in October, turkey stocks continued to be well below the previous year. Cold storage data for the end of October showed turkey stocks at 417 million pounds, down 19 per cent from the previous year. Whole bird stocks were at 244 million pounds, down 18 per cent from a year earlier. At the beginning of 2010, whole turkey stocks totalled 76 million pounds, 45 per cent lower than the previous year. Stocks of turkey parts were estimated at 173 million pounds at the end of October, down 21 per cent from a year earlier. Even with higher turkey production expected in the fourth quarter compared with the previous year, total turkey stocks at the end of 2010 are expected to be 210 million pounds, 20 per cent less than the previous year. Cold storage holdings for turkey products are expected to remain below 2010 levels during the first half of 2011, but to move higher in the second half of the year.

After being above year-earlier levels during the first 11 months of 2010, the national price for whole hens is expected to decline seasonally in December but to remain well above a year earlier. Lower stocks of whole birds during all of 2010 have placed continued upward pressure on prices. In November, the national price for whole hen turkeys was $1.06 per pound, up 29 per cent from the previous year. Even with higher production, the low stock levels are expected to pressure prices higher, and whole hen turkey prices are expected to average $1.02 to $1.05 per pound in fourth-quarter 2010, an increase of approximately 27 per cent from the previous year. With this continued price strength through the end of the year, the annual price for 2010 is expected to average about $0.90 per pound, an 18 per cent increase from 2009.

Over the first 10 months of 2010, the number of turkey poults placed for grow-out has totalled 230 million, down slightly (0.3 per cent) from the same period last year, after falling steeply in 2009. The decline in poults placed for grow-out would indicate that turkey production in 2011 would be close to or slightly lower than in 2010. However, the number of turkey eggs placed in incubators in November may indicate a change in outlook among turkey producers. The number of eggs in incubators at the beginning of November totalled 28.3 million, 8.9 per cent more than a year earlier.

Even with strong wholesale prices for whole birds and most turkey products throughout 2010, the size of the jump in eggs in incubators is surprising. During the first 10 months of 2010, the number of turkey eggs in incubators on a monthly basis has been the same as or below that of the previous year.

Table Egg Production Continues Higher

The table egg laying flock in October was estimated at 279 million hens, 0.5 per cent above the previous year. Year-over-year table egg flock numbers have been mixed so far in 2010, with the flock size up in four months of the year and lower in six months. The table egg flock is expected to remain higher than the previous year through the remainder of 2010, although only by a small amount. At the beginning of November, the estimate of the number of birds in the table egg flock was down but the decrease was less than one per cent. With expected higher feed prices and continued economic uncertainties, egg producers are not expected to have much incentive to greatly expand production in 2011.

Table egg production has been higher than the previous year in nine of the first 10 months of 2010. However, in October, production was 550 million dozen, a decrease of 0.6 per cent from the previous year. The lower production provided upward pressure on table egg prices in November. The fourth-quarter 2010 wholesale price for one dozen Grade A eggs in the New York market is forecast to average $1.19 to $1.22, up considerably from the third quarter and slightly higher than a year earlier.

Hatching egg production has been higher throughout 2010. Over the first 10 months of 2010, hatching egg production has totalled 897 million dozen, 1.5 per cent higher than during the same period in 2009. Although on a quantity basis most of this increase has come from higher production of meat-type birds, the percentage increase for both meat (1.5 per cent) and egg-type birds (1.4 per cent) were very similar. The increase in eggs from meat-type birds went toward producing broiler chicks to support the gradually strengthening production in the broiler industry. With broiler production expected to show only modest increases in 2011, production of hatching eggs is expected to be only slightly higher than in 2010.

Egg Exports Fall in October

Monthly exports of eggs and egg products had been consistently higher on a year-over-year basis through August. However exports were down in September and in October, shipments were the equivalent of 25.8 million dozen eggs, 3.8 per cent below those of October 2009. October exports were higher to Hong Kong, the United Arab Emirates and Israel but these increases were more than offset by falling shipments to Canada, Japan and a number of EU countries. Most of the decrease was due to falling exports of egg products (down 6.8 per cent), as shipments of shell eggs were down less than one per cent. Shipments of egg products were likely adversely impacted by the sharp spike in US egg prices in late August and early September that raised prices for breaking eggs.

POULTRY TRADE

Broiler Shipments Take Big Leap in October 2010

Broiler shipments rose from 608.2 million pounds in October 2009 to 670 million pounds in October 2010, a 10 per cent increase. Several large broiler markets contributed toward the largest US monthly broiler shipment ever made. Of all the major contributing markets, Russia’s was by-far the largest. After five months (March-June 2010) of almost no broiler trade activity, Russia imported more than 211 million pounds of broiler meats, 20 per cent over October 2009 and about 32 per cent of the US total broiler shipments in October 2010.

In addition to Russia, broiler shipments to other major markets such as Mexico, Hong Kong and Canada increased from a year earlier. Shipments to Mexico in October 2010 increased 14.3 per cent, with broiler shipments to Hong Kong and Canada increasing 127 per cent and eight per cent, respectively, from a year ago. Notable increases in October 2010 broiler shipments were also seen among markets such as Viet Nam, Angola and South Korea, compared with a year earlier. The dollar value of US broiler meat shipments also increased 4.6 per cent from a year ago, totalling almost $309.7 million in October 2010.

Turkey Shipments Up Slightly in October 2010

Turkey shipments in October were up less than one per cent from a year ago. A total of 49.2 million pounds of turkey meat was shipped in October 2010, just slightly more than 49 million pounds a year ago. Almost 54 per cent of total US turkey shipments went to Mexico. Mexico imported 26.5 million pounds of turkey meat from the US, a 23 per cent increase from October 2009. Turkey shipments to Canada and Hong Kong also were up from a year ago. In October 2010, Canada imported 2.6 million pounds and Hong Kong 2.2 million pounds of turkey meat from the US, each country importing 69 per cent more than a year earlier. The dollar value of turkey shipments increased 18.5 per cent, from $36.2 million in October 2009 to $42.9 million in October 2010.

Further Reading

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December 2010