Summary

Poultry: Broiler meat production is expected to total 9.33 billion pounds in second quarter 2011, up 1.4 per cent from a year earlier but production is expected to be lower in the second half of 2011. Stocks are up from the previous year but are expected to decline in the second half of the year. Price changes for broiler products in 2011 have been mixed, with breast meat prices down and most leg meat prices higher. Turkey meat production is expected to grow through the first three quarters of 2011 but decline in the fourth quarter.

Poultry Trade: Broiler shipments in April 2011 declined, while turkey shipments rose from a year earlier. Broiler shipments totalled 497 million pounds, a 7.6 per cent decrease from April 2010 shipments. Turkey shipments totalled 52.8 million pounds, a 23 per cent increase from last year.

Poultry Production

Broiler Meat Production Down Two Per Cent in April

Total broiler meat production in April 2011 was 2.97 billion pounds, a decrease of 2.3 per cent from the previous year. A considerable share of the decline can be attributed to one slaughter day fewer in April 2011. Broiler meat production on a year-over-year basis rose in three of the first four months in 2011. Processors reported slaughtering 686 million broilers in April 2011, a decrease of four per cent from the previous year. Partially offsetting this was an increase in the average liveweight at slaughter of those broilers to 5.76 pounds, up 1.4 per cent from a year earlier. In addition to the increase in the average liveweight, there was an increase in the average meat yield per bird to 4.33 pounds, a 1.8 per cent increase from a year earlier.

With a combination of continued sluggishness of the domestic economy and forecast higher prices for both corn and soybean meal, the broiler meat production estimates for fourth-quarter 2011 and for 2012 were revised downward from the previous month’s estimate. The meat production estimate for fourth-quarter 2011 was lowered by 25 million pounds to 9.4 billion pounds. The estimate for first quarter 2012 was also lowered by 25 million pounds, to 9.36 billion pounds, and the total for 2012 was reduced by 100 million pounds to 38.0 billion pounds.

The number of broiler chicks being placed for grow-out continues to be only slightly higher than the previous year. Over the last five weeks (7 May to 4 June 2011), the average number of chicks placed per week was 173 million, up only 0.6 per cent from the same period in 2010. The slow growth in chick placements – combined with ongoing reductions in the number of eggs placed in incubators, down 1.8 per cent over the last five weeks – is expected to translate into slightly lower broiler meat production in third-quarter 2011. The broiler meat production forecast for third-quarter 2011 is 9.43 billion pounds, down less than one per cent from the previous year.

Broiler stocks as of the end of April 2011 totalled 707 million pounds, up 16 per cent from the previous year and up 46 million pounds (seven per cent) from the previous month. Ending stocks for first-quarter 2011 were revised slightly upward, by one million pounds to 661 million pounds, 11 per cent higher than a year earlier. Strong gains in production in first-quarter 2011 and a generally sluggish domestic economy have contributed to growing stocks, a situation that is expected to change somewhat in the coming months as gains in production slow and then become negative. The forecasts for ending stocks for the second and third quarters of 2011 were increased. The estimate for second-quarter ending stocks was raised by 45 million pounds to 675 million pounds, and the forecast for ending stocks in the third quarter was increased by five million pounds to 650 million pounds.

Since the beginning of 2011, broiler stocks have declined by 66 million pounds. The largest change was a 21 per cent drop in the amount of broiler meat in the ‘other’ category, which is the largest single category. Stocks of a number of leg meat products, such as legs, thighs and thigh meat, have declined since the beginning of 2011 but stocks of drumsticks and leg quarters have increased.

With the downward revisions in broiler meat production, the ending stocks estimate for first-quarter 2012 was reduced to 650 million pounds. The ending stocks estimate for 2012 was lowered to 700 million pounds.

Over the last several months, prices for a number of broiler products have been moving in different directions. Prices of boneless/skinless (B/S) breast meat in the Northeast market, at $1.31 per pound, were also lower, falling 21 per cent from May 2010. However, prices have risen for a number of leg meat products. Prices for leg quarters averaged 49.6 cents per pound in May, up 30 per cent from a year earlier. Boneless/skinless thigh meat prices in May also were higher than the previous year, climbing 43 per cent to $1.35 per pound. The May price for B/S thigh meat was 3.7 cents per pound higher than for B/S breast meat. This is a significant change from 2010, when B/S breast meat averaged $1.65 per pound, 71 cents per pound higher than B/S thigh meat, which averaged $0.94 per pound.

Turkey Production Slightly Higher in April

Turkey meat production in April was 456 million pounds, up fractionally from a year earlier. As with broilers, the driving factor in the increase has been higher bird weights. In April, the number of birds slaughtered was 19.1 million, down about 0.5 per cent from the previous year. This was offset by a one per cent increase in the average weight at slaughter to 30 pounds. Again, the small increase in turkey meat production in April was in part due to one slaughter day fewer in April 2011 than in the previous year.

Turkey hatchery data shows that the number of eggs in incubators was higher than a year earlier the last two months in 2010 and the first three months of 2011. Given these increases, the estimate for turkey meat production in second-quarter 2011 was increased by 10 million pounds to 1.43 billion, 3.43 per cent higher than the previous year. However, in April and May, the number of eggs in incubators has been lower by 3.8 and 3.6 per cent, respectively. With hatchery numbers beginning to decline and grain prices forecast higher, the fourth-quarter 2011 forecast of turkey meat production was lowered to 1.46 billion, down 10 million from the earlier projection. The forecast for first-quarter 2012 was reduced to 1.4 billion pounds, and the total for 2012 was lowered to 5.78 billion pounds.

Although turkey meat production was 4.7 per cent higher than a year earlier in first quarter 2011, cold storage holdings of turkey products were below those of a year earlier. At the end of April, turkey stocks totaled 364 million pounds, down 14 per cent from April 2010. Stocks of whole birds, 181 million pounds, accounted for approximately half of the total and were also down 14 per cent from a year earlier. However, there was a strong difference between stocks of toms and hens from the previous year. Stocks of toms were 83 million pounds, down 26 per cent, while stocks of hens were 98 million pounds, down less than one per cent. Partially offsetting the lower whole bird stocks were gains in cold storage holdings of mechanically deboned meat (MDM), up 22 per cent from a year earlier.

With lower stocks and production, and strong exports, prices for whole birds remain considerably higher than a year earlier. In May, prices for frozen whole hens averaged $1.00 per pound and prices for frozen whole toms averaged $1.02 per pound, up 21 and 24 per cent, respectively from last year.

In May, the weekly average wholesale price for turkey breasts was approximately $1.30 per pound, up from about $1.19 per pound in May 2010. Weekly average drumstick prices were also considerably higher, averaging around $0.81 per pound, compared with $0.74 per pound a year earlier (up nine per cent). Prices on a year-over-year basis have also moved higher for turkey wings and B/S breast meat.

Egg Production Slightly Higher in April, 2012 Production Estimates Lowered

During January to April 2011, the number of hens in the US table egg flock was slightly higher than during the same period in 2010. In April, the flock was estimated at 283 million birds, up fractionally from the previous year. That small increase in the size of the table flock, augmented by an increase in the rate of lay for table egg birds in April, resulted in a 1.0 per cent increase in the number of table eggs produced in April to 546 million dozen.

While the production estimates for the second half of 2011 were raised slightly, the 2012 production estimates for both table egg and hatching eggs were lowered. The estimate for table egg production in 2012 was lowered by 20 million dozen to 6.54 billion and the estimate for hatching eggs was reduced by eight million dozen to 1.0 billion dozen. The changes for the table egg market are brought about chiefly by the increases in grain prices, and the reduction in hatching egg production is mostly the result of an anticipated decline in broiler meat production.

During April through early June, wholesale egg prices increased leading up to the Easter holiday and then declined. The seasonal decline this year has not been as large as in previous years. Prices in the New York market were $1.20 per dozen in April, since Easter was late in the month. While weekly prices declined during May, the monthly average was $0.99 per dozen, up over 20 cents from the previous year. In early June, weekly prices were still about $0.98 per dozen. The expected price for second-quarter 2011 is $1.04-$1.05 per dozen. Wholesale egg prices are expected to weaken slightly in the third quarter, but then to strengthen seasonally to $1.08-$1.16 in fourth-quarter 2011.

Egg and Egg Product Exports Continue High in April

The relatively low value of the dollar against a number of other currencies helped to push egg and egg product exports in April to 24.7 million dozen, a 21 per cent increase from a year earlier. Over the first four months of 2011, egg exports have totalled 91.8 million dozen, up 18 per cent from the same period in 2010. While shipments have been higher to a wide variety of countries, the largest gains have been to Japan and Hong Kong. The increase in shipments to Japan (up 33 per cent) has made it the largest market for US egg products over the first four months of 2011. Hong Kong has traditionally been a major market for US egg products, and part of the growth in shipments (up 48 per cent) so far in 2011 may be due to a decline in direct shipments to China.

Total exports of eggs and egg products are forecast at 65 million dozen in second quarter 2011 after reaching 67 million in the first quarter. While the volume of egg and egg product exports has risen by 18 per cent over the first four months of 2011, the value of shipments has also risen 18 per cent, boosted by a 31 per cent increase in the value of hatching eggs.

Poultry Trade

Broiler Shipments Fell in April

April broiler shipments started off slowly in second-quarter 2011. Broiler shipments for April 2011 totalled 497 million pounds, 7.6 per cent fewer than in April 2010. One reason for the decline in broiler shipments is likely the rise in leg-quarter prices. Compared with April 2010, leg-quarter prices averaged about 30 per cent higher; concurrently, unit values for broiler exports were 25 per cent higher.

Shipments to major broiler importing countries such as Mexico, Cuba, Hong Kong, Angola and China all dropped in April 2011. Mexico, the top US broiler destination for 2011, imported more than 12 million pounds less this April, while Cuba imported almost 35 million pounds less than it did a year ago. Shipments to Russia in April 2011 continued their pace of the last two months. With a large portion of Russia’s quota left to be filled for the year, it is expected that shipments to Russia will increase at some point during the last three quarters of 2011.

Turkey Shipments Rose in April

April turkey meat shipments increased 23 per cent from a year ago. A total of 52.8 million pounds of turkey meat were shipped in April. Over 55 per cent of US turkey shipments went to Mexico, and 13 per cent went to China. Although domestic wholesale turkey prices have been strong – ranging from $0.97 and $1.01 per pound – higher turkey exports are expected throughout 2011. Other major destinations for US turkey such as Hong Kong, the Dominican Republic and Canada are also up and have contributed to the US expansion in turkey shipments. Of these three countries, Hong Kong had the largest increase in shipments from last year. Turkey shipments to Hong Kong rose 45 per cent, while shipments to the Dominican Republic and Canada increased 14 and 18 per cent, respectively.

Further Reading

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June 2011