Highlights

Poultry: Broiler meat production in fourth quarter 2010 is expected to total 9.43 billion pounds, up 125 million from the previous estimate. This adjustment follows strong gains in production in both October and November. The outlook for growth in broiler meat production for the beginning of 2011 has changed considerably over the last several weeks as growth in the number of chicks being placed for grow-out has declined sharply. December prices for whole hen turkeys averaged $0.98 per pound, down seasonally from November, but 14 cents per pound higher than the previous year. Prices in fourth quarter 2010 averaged $1.04 per pound, 27 per cent higher than the previous year. With low stock levels going into 2011, whole hen turkey prices are expected to remain above year earlier levels through the first half of the year. Overall egg exports over the first 11 months of 2010 have totalled 236 million dozen, up eight per cent from the previous year. Total egg exports have been boosted by strong gains in exports of egg products.

Poultry Trade: November broiler and turkey shipments rose over last year’s totals. Broiler exports totalled 665.3 million pounds, a 26 per cent increase, and turkey exports totalled 64.3 million pounds, an increase of 33 per cent from a year ago.

Broiler Production Estimate for Fourth-Quarter 2010 Increased

Broiler meat production in fourth-quarter 2010 is expected to total 9.43 billion pounds, up 125 million from the previous estimate. This adjustment follows strong production gains in both October and November. If the total of 9.43 billion pounds is achieved, it would be an almost seven per cent increase from fourth-quarter 2009. The increase is expected to come from a combination of higher numbers of broilers being slaughtered and gains in average weights. Broiler meat production in November 2010 was 3.12 billion pounds, an increase of 12 per cent from a year earlier. Broiler meat production has increased on a year-over-year basis in eight of the first 11 months of 2010. A major component of the November increase was one additional slaughter day in 2010 than November 2009. The number of birds slaughtered in November was eight per cent higher than the previous year, and this increase was compounded by a strong rise (3.7 per cent) in the average liveweight for birds at slaughter to 5.88 pounds. Broiler meat production in December is again expected to show a strong increase, due to a combination of a higher number of birds slaughtered and higher average weights.

The outlook for growth in broiler meat production for the beginning of 2011 has changed considerably over the last several weeks, due to sharp changes in both the weekly number of broiler eggs placed in incubators and the number of chicks being placed for growout. At the end of November, the five-week moving average (30 October to 27 November) showed that the number of chicks being placed for grow-out was averaging 5.5 per cent higher than the previous year. By the first week of January, the five-week moving average (11 December to 8 January) showed that the average number of chicks placed for grow-out was only 0.8 per cent higher than in the same period the previous year. This abrupt slow-down is likely the result of sharp increases in feed grain prices, especially coming at a time when wholesale prices for many broiler products have been declining.

Broiler stocks at the end of November totalled 743 million pounds, up 42 million pounds from the end of October and 16 per cent higher than at the end of November 2009. Higher broiler meat production, especially in the second half of 2010, has resulted in generally higher broiler stocks on a year-over-year basis in the last four consecutive months. One exception has been stocks of whole birds. At the end of November, whole bird stocks totalled 14 million pounds, a decrease of five million pounds (25 per cent) from a year earlier. Stock levels for almost all other broiler products were significantly higher than the previous year. Higher stocks of leg quarters (up 58 million pounds) have accounted for a major portion of the increase. Broiler stocks are expected to total 750 million pounds at the end of 2010, up 22 per cent from the previous year and 25 million pounds higher than the previous estimate. Strong exports are expected to be more than offset by increases in meat production. In 2011, ending stocks are expected to be above a year earlier during the first half of the year, but to move lower as production growth slows.

Even with strong prices for both beef and pork products, the strong gains in broiler meat production and resulting increases in stock levels, combined with continued high unemployment, have gradually pushed down wholesale prices for most broiler products. Prices for boneless/skinless breast meat in the Northeast market averaged $1.15 per pound in December, down $0.53 a pound from a high of $1.67 in September and down four per cent from a year earlier. Prices for leg quarters in the Northeast market averaged $0.37 per pound in December, an increase of two per cent from the previous year. Prices were down from $0.41 per pound in October, when they were boosted by record-high exports that month. Wing prices started 2010 at very high levels but declined significantly as the year progressed. After averaging $1.61 per pound in first-quarter 2010, the average price for whole wings in the Northeast market fell to $1.12 in December. In past years, wing prices had peaked at the end of the professional football season and then declined. In 2011, with strong gains in production expected through January, prices are not expected to have as strong an upward seasonal movement as in previous years.

Turkey Prices Higher in Fourth-Quarter 2010

In 2010, prices for whole hen turkeys were consistently higher than the previous year. With lower production through the first three quarters of 2010 and a strong export market, stocks levels declined, placing upward pressure on prices. December prices for whole hens averaged $0.98 per pound, down seasonally from November but $0.14 per pound higher than the previous year. Prices in fourth quarter 2010 averaged $1.04 per pound, 27 per cent higher than the previous year. This was six cents per pound higher than in the third quarter. With low stock levels going into 2011, whole hen prices are expected to remain above year-earlier levels through the first half of the year, but may be slightly lower by the end of the year.

Turkey production in November was 520 million pounds, nine per cent higher than in November 2009. The increase in production came from gains in both the number of birds slaughtered (even accounting for one more slaughter day in November 2010 than in November 2009) and a gain in the average weight per bird at slaughter. In November 2010, the number of turkeys slaughtered was 6.8 per cent higher than the previous year. The average weight for turkeys at slaughter rose to 28.2 pounds, up 1.6 per cent. Turkey meat production in December 2010 is also expected to be higher than the previous year. The estimate for turkey meat production in fourth quarter 2010 is 1.5 billion pounds, up four per cent from the previous year. The turkey meat production estimate for 2011 is 5.56 billion pounds, down one per cent from 2010, with much of the growth coming in the first half of the year and higher grain prices lowering production in the second half of the year.

Ending stocks for all turkey products in fourth-quarter 2010 are expected to be 200 million pounds, down 62 million pounds (24 per cent) from the same period in 2009. At the end of November, cold storage holdings for turkey totalled 176 million pounds, 28 per cent lower than a year earlier. The decrease was due to smaller cold storage holdings for both whole birds (down 42 per cent) and turkey parts (down 22 per cent). With turkey production expected to be only slightly higher in the first half of 2011 (up one per cent) and lower beginning stocks, turkey cold storage levels are expected to continue lower than the previous year during the first half of 2011.

Eggs Prices Higher in Fourth-Quarter 2010

Even with table egg production expected to be above year-earlier levels in fourth quarter 2010, wholesale egg prices have remained strong through the end of 2010. Wholesale prices for a dozen grade A large eggs in the New York market are expected to average $1.23 in fourth-quarter 2010, up five per cent from the same period in 2009 and up sharply (32 per cent) from the third quarter of 2010. During 2010, prices averaged $1.06 per dozen, up three cents from 2009, as higher prices in the first and fourth quarters offset lower prices in both the second and third quarters. With table egg production expected to expand in 2011, prices are expected to average $0.98 to $1.04 per dozen, slightly lower than the average for 2010. This forecast will be dependent on the pace of economic recovery, with faster growth placing upward pressure on prices, especially in the second half of 2011.

Table egg production in November 2010 was 542 million dozen, down slightly (less than one per cent) from the previous year. Production was slightly higher in each of the first three quarters of 2010, and overall production for 2010 is estimated at 6.52 billion dozen, which would be a slight gain of 0.7 per cent. Production in 2011 is expected to follow this same growth pattern, with yearly production estimated at 6.55 billion dozen, a gain of less than one per cent. Gains in production in 2011 are expected to be small as higher grain prices reduce incentives for egg producers to expand output.

Even with substantial gains in broiler production expected in fourth-quarter 2010, the estimate for hatching egg production is 265 million dozen, only marginally higher than the previous year. As with shell eggs, hatching eggs have had small gains in production in each of the first three quarters of 2010. The overall production estimate for 2010 is 1.07 billion dozen, just over one per cent higher than in 2009. With slower growth expected for the broiler industry in 2011, hatching egg production is expected to increase only marginally in 2011.

Strong egg prices in fourth-quarter 2010 tended to push down demand for egg exports. US egg and egg product exports in November totalled 19 million dozen, down 15 per cent from the previous year. Overall egg exports over the first 11 months of 2010 have totalled 236 million dozen, up eight per cent from the previous year. Over the first 11 months of 2010, shipments of table eggs for consumption have totalled 66 million dozen, down two per cent from the same period in 2009. The major markets for table eggs are Hong Kong, Canada and the UAE. These countries have imported 53.8 million dozen table eggs through the first 11 months of 2010, over 80 per cent of our total shipments. Exports of shell eggs for hatching have risen slightly, totalling 47 million dozen over the first 11 months of 2010, one per cent higher than in the same period in 2009 as economic conditions in many countries slowed growth in broiler production. The major destinations for hatching eggs are Canada, Mexico and Central American and Caribbean countries. The large majority of the growth in egg exports has come from higher shipments of egg products. Shipments of egg products so far in 2010 have been 123 million dozen, up 18 per cent from the same period in 2009. Japan and Canada are major markets for egg products but shipments to various EU countries have accounted for a substantial portion of the exports. Through November, egg product exports to EU countries have totalled over 37 million dozen. Germany is by far the largest buyer, accounting for over 23 million dozen.

Poultry Trade

Broiler shipments jumped in November

Broiler shipments totalled 665.3 million pounds in November 2010, a 26 per cent increase from the same period in 2009. November broiler shipments accounted for the second largest US shipment ever, following October’s record shipment. There are several reasons for the jumps in broiler shipments that one can point to including relative low broiler prices, favourable exchange rates and the resumption of trade with Russia in August. For the third month in a row, Russia has imported large volumes of broiler meat. Twenty-eight per cent of US total broiler shipments went to Russia, a 66 per cent increase over shipments in November 2009. Other markets such as Mexico, Hong Kong, Angola and Viet Nam were also major contributors to the second largest US broiler shipment. Compared with November 2009, Mexico imported 27 per cent more broilers in November 2010, while Hong Kong, Angola and Viet Nam imported 113 per cent, 44 per cent and 196 per cent more, respectively, over the same period.

With respect to value, broiler shipments were up in November 2010. The US shipped $322 million pounds of broiler meat to various markets in November 2010, a 33 per cent increase from last November’s total value. The leading three markets in shipment values were Russia, Mexico and Canada, in that order.

Turkey shipments are up in November

Turkey shipments in November 2010 were ranked the second largest turkey export ever. A total of 64.3 million pounds of turkey meat was shipped to markets worldwide, an increase of 33 per cent from a year ago. Favourable exchange rates are one of the chief reasons for the large shipment. The large surge in total turkey shipments was fueled primarily by Mexico’s turkey imports. Mexico imported 11 million pounds more in November 2010 than it did a year earlier, for one of the largest turkey shipments to any one market in a single month. China and Hong Kong also were large contributors to the US second largest shipment. China imported over eight million pounds of turkey meat, almost three million pounds more than it did the previous year, while Hong Kong imported over four million pounds, over three million pounds more than it did a year ago.

The total value of turkey shipments in November came to $51 million. Compared with the November 2009 total value, November 2010 shipments were up 40 per cent. Of the turkey meat shipped, Mexico accounted for 60 per cent of the total value. Other markets, such as China and Hong Kong, imported turkey meat with totals exceeding last year’s value by 100 per cent or more.

Further Reading

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January 2011