Summary

Poultry Production: Broiler meat production rose notably in January, but broiler hatchery numbers point to less growth in production in the coming months. Broiler production for 2011 is estimated to be higher than the previous year through the first half of the year. The estimates for first- and-second quarter turkey meat production were both increased by 25 million pounds. Ending stocks for January showed whole turkey inventories down 26 per cent. Table egg production rose in January and wholesale egg prices weakened in early March, but prices are expected to strengthen toward the end of the first quarter with the approach of the Easter holiday period.

Poultry Trade: January broiler and turkey shipments were both up from last year. Broiler shipments totaled 462.5 million pounds, an increase of less than one per cent from January 2010 shipments. Turkey shipments totalled 47.6 million pounds, a 47 per cent jump from a year earlier.

Poultry Production

Broiler Production Rises Strongly in January, First-Quarter Estimate Revised Upward

Broiler meat production for January 2011 was reported at 3.13 billion pounds, up 10 per cent from the previous year. The increase was the result of strong growth in both the number of birds slaughtered and in the average live weight at slaughter. The trend towards more birds slaughtered was boosted by one more slaughter day in January 2011 than in January 2010. The total number of birds slaughtered was 713 million, up six per cent from January 2010, and the total live weight of broilers at slaughter rose by 10 per cent. The average live weight at slaughter was 5.85 pounds, up four per cent from the previous year.

With January’s strong increase in broiler meat production and expectations for February and March to show year-over-year production gains, the broiler meat production estimate for first-quarter 2011 was increased by 100 million pounds to 9.23 billion pounds, an increase of 5.6 per cent from a year earlier. Some of the production gain is expected to come from a higher number of birds slaughtered, but more of the increase will be due to higher average weights at slaughter throughout the remainder of the first quarter and into the second quarter. Because of the higher expected weights, the meat production estimate for the second quarter was also increased and now is expected to total 9.39 billion pounds.

In the NASS Poultry Slaughter 2010 Summary, there were some revisions to broiler meat production and slaughter numbers for 2010 but they were relatively small and total broiler meat production for 2010 remained at 36.9 billion pounds.

Weekly estimates of broiler eggs in incubators and chick placements from the NASS Broiler Hatchery Report point toward continuing increases in the number of birds available for slaughter. However, the increases will be much lower than they were at the end of fourth-quarter 2010 and early in first-quarter 2011. Over the last five weeks (5 February to 5 March), the number of eggs placed in incubators has averaged 206 million, only 0.1 per cent higher than during the same period the previous year. The incubation period for broiler eggs is three weeks, after which chicks are placed for grow-out. Over the last five weeks, the number of chicks being placed for grow-out has averaged about 1.1 per cent higher than the previous year. Chicks placed for grow-out in mid- to late-March will likely be ready for slaughter in early to mid-May, based on an average seven- to eight-week grow-out period.

Even with a strong year-over-year increase in broiler meat production in January and another, smaller increase expected in February, along with fairly high stock levels, wholesale prices for a number of broiler products seem to have reached a low point at the end of 2010 or the beginning of 2011 and they are now slowly trending upward. Over the first two months of 2010, the 12-city whole broiler price averaged approximately $0.76 per pound, down about four cents per pound from the same period in 2010. However, by early March, prices had risen to about $0.81 cents per pound. Year-over-year price changes for other broiler products are mixed. Prices for boneless/skinless breast meat in the Northeast market in the first 2 months of 2011 averaged $1.15 per pound, down 12 per cent from same period the previous year, but like whole bird prices, they have been gradually moving higher in recent weeks.

Prices for rib-on breasts averaged $0.85 in January and February, and like boneless/skinless breasts prices, prices for rib-on breasts have been moving higher in early March. Even though a large decline in exports is expected in first-quarter 2011 compared with the record high exports of fourth-quarter 2010, prices for leg quarters averaged $0.36 cents per pound in the first two months of 2011, up fractionally from the same period in 2010 although seven per cent lower than in fourth quarter 2010. However, broiler wing prices have fallen considerably over the last year. The January and February 2011, average price for broiler wings was $1.01 per pound, down over 40 per cent from the same period in 2010.

The NASS Annual Cold Storage Report contained some adjustments to ending broiler stocks for 2010. Ending stocks for 2010 are estimated at 773 million pounds, 25 per cent higher than the previous year. The stocks increase was the result of a strong increase in production in the fourth quarter, more than offsetting the record exports. Higher broiler meat production over the second half of 2010 pushed up stock levels, and stocks are expected to remain higher than the previous year through the first two quarters of 2011, but to fall below the previous year in the second-half of 2011 as production growth slows or declines.

Stocks of broiler products at the end of January 2011 were reported at 749 million pounds, 23 per cent higher than the previous year. Stocks of almost all broiler products were well above their previous-year levels, the only exception being thigh meat stocks that were down about four per cent. Stocks of wings rose the most (129 per cent), and this increase has been reflected in strong declines in wholesale wing prices over the past year. The ending stocks estimate for first-quarter 2011 is 730 million pounds, an increase of 22 per cent from the previous year. While this is a considerable increase from the previous year, it represents a decline from fourth quarter 2010 and is expected to begin to place some upward pressure on broiler prices.

Turkey Production Forecast for 2011 Increased

Over the second half of 2010, turkey hatchery data showed that the number of poults being placed was three per cent higher than in the same period the previous year. This pace increase carried through to January 2011, when the number of poults placed was five per cent higher than a year earlier. Based on the continued increases in poult placements, the turkey meat production estimates for the first and second quarters were both increased by 25 million pounds. First-quarter 2011 turkey meat production is now forecast at 1.4 billion pounds, up 5.6 per cent from the previous year, and the forecast for the second quarter is 1.43 billion pounds, up three per cent. The gains are expected to come primarily from a higher number of turkeys being slaughtered, but a small increase in average live weight at slaughter is also expected.

Turkey meat production in January 2011 totalled 463 million pounds, up 9.1 per cent from a year earlier. In January 2010, production fell 9.6 per cent, so January 2011 production remains over one per cent lower than January 2009. The increase was the result of both a higher number of turkeys being slaughtered (up 7.8 per cent) and an increase in the average weight of birds at slaughter to 30.8 pounds (1.1 per cent higher). The increase in the number of birds slaughtered in January was also impacted by one additional slaughter day in January 2011 compared with a year earlier.

Year-over-year increases in production are expected to continue in both February and March, with production over the first half of 2011 expected to be higher than in the same period in 2010. Growth in turkey meat production is expected to decline during the second half of 2011 and average slightly below the previous year.

Turkey Stocks 16 Per Cent Lower

The estimate for turkey stocks at the end of January 2011 was 254 million pounds, down 16 per cent from the previous year. The decrease in cold storage holding stems from sharply lower holdings in a number of the categories reported for turkeys. At the end of January 2011, whole bird stocks were estimated at 83 million pounds, down 26 per cent from the same period in 2010. Stock levels also declined strongly for breast meat, which fell by 21 per cent to 56 million pounds. One of the exceptions to these declines was in the stocks of mechanically deboned meat (MDM), which were up 42 per cent to nine million pounds. There were also some small upward revisions to ending turkey stocks for 2010. They are now estimated at 192 million pounds, slightly higher than the original estimate and 27 per cent below the previous year.

The large decrease in stocks of whole birds at the end of 2010 and into 2011 has pushed whole bird prices higher, even with less-than-ideal economic conditions. Whole bird prices were well above the previous year throughout 2010, and this pattern has continued into the first quarter of 2011. Over the first two months of 2011, whole turkey prices have continued above year-earlier levels. In February, prices for frozen whole hens averaged $0.90 per pound, 19.6 per cent higher than at the same time in 2010. Prices for frozen whole hens are forecast to remain above year earlier-levels through the first half of 2011. Prices for boneless/skinless breast meat were also sharply higher in January, averaging $2.59 per pound, over 70 per cent higher than a year earlier. One exception to the higher prices was turkey MDM. With stocks of turkey MDM higher than a year earlier, prices for turkey MDM in January were only $0.19 per pound, down slightly from the previous year.

Table Egg Production Up in January

Table egg production in January was 562 million dozen, up 1.6 per cent from the previous year. Table egg production had been down in both October and November 2010, and this is the second month of year-over-year increases in production. The number of birds in the table egg flock was slightly higher, rising by 0.5 per cent from January 2010. The table egg flock is expected to continue to be slightly larger than the previous year for most of 2011, which is expected to result in higher table egg production in 2011. Table egg production is forecast at 1.635 billion dozen in the first quarter of 2011, 1.5 per cent higher than the previous year. Overall production for 2011 has been revised upward to 6.6 billion dozen, which would be a 1.3 per cent increase from 2010. The NASS Annual Chicken and Egg Report contained some slight upward revisions to table egg production in 2009 (6.49 billion dozen) and 2010 (6.55 billion dozen).

While table egg production was rising in January, hatching egg production declined slightly to 90 million dozen. The decline in production was the resulted of lower production of egg-type hatching eggs (down 5.7 per cent), as production of broiler-type hatching eggs rose slightly.

Hatching egg production during the first three quarters of 2011 is expected to be about even with the previous year, but to decline slightly in the fourth quarter as broiler production slows. As with table eggs, the NASS Annual Chicken and Egg Report contains some revisions to hatching egg production in both 2009 and 2010. In both cases the upward revisions only marginally change the yearly totals.

Wholesale table egg prices were relatively strong in January 2011, at $1.08 per dozen, Grade A large, but this is a decrease of $0.18 per dozen from the previous year. Table egg prices remained just below $1.10 per dozen through most of February, but by the beginning of March they had fallen to about $0.93 per dozen. With Easter very late this year (24 April), egg prices may not gain much upward strength until the last of March. For that reason, the estimate for first-quarter 2011 egg prices was lowered to $1.04 to $1.07 per dozen, well below the average for the previous year ($1.26 per dozen). The late Easter is expected to help boost the average egg price in second-quarter 2011 above the previous year. With a small expansion expected in table egg production, egg prices for 2011 are expected to average $0.97 to $1.03 per dozen, which would be about a six per cent decline from the previous year.

Egg Exports Expand in 2010

Egg exports in 2010 rose to 258.2 million dozen, up 6.6 per cent from a year earlier. Almost all the growth was from higher shipments to a number of Asian markets. Exports to both Canada and Mexico – traditionally two of the largest US export markets – were both down sharply, likely due to higher wholesale table egg prices in 2010, especially in the first and fourth quarters. The declines in exports to Canada and Mexico were more than offset by strong exports to Korea, Japan, and Hong Kong. These three markets accounted for 27 per cent of total egg and egg product shipments. Also boosting egg exports were higher shipments to a number of European countries. Egg exports in 2011 are expected to decline to 247 million dozen due to smaller shipments to European countries.

Even with relatively strong prices at the end of 2010 and into January 2011, egg exports in January totalled 19.1 million dozen, up eight per cent from the previous year. In most cases, the higher shipments in January 2011 were a continuation of the pattern seen in most of 2010. Most of the increases in total shipments were due large gains in exports to Korea, Japan and Hong Kong. One exception was that shipments to Mexico were up almost 55 per cent, while in 2010 shipments to Mexico had fallen by 15 per cent from the previous year.

Poultry Trade

Broiler Shipments Up Slightly in January

The beginning of 2011 brought slightly higher volumes of broiler shipments than occurred in January 2010. In January 2011, broiler shipments totaled 462.5 million pounds, less than a one per cent increase from last January. Sizeable increases in broiler shipments went to Mexico and Hong Kong. Shipments to Mexico increased 22 per cent from a year ago, while just over 66 per cent more broiler meat was shipped to Hong Kong than a year earlier. Although broiler shipments were up in January 2011, several major broiler meat destinations (such as Russia and China) imported less broiler meat than they did a year ago. There was a 75 per cent reduction in broiler shipments to Russia compared with January 2010 and a 73 per cent drop in shipments from China. These declines helped pull down the volume shipped in January 2011 below 500 million pounds, the lowest since February 2010.

Turkey Shipments Start Out Strong in January

Turkey shipments in January 2011 were up 47 per cent from a year ago. A total of 47.6 million pounds of turkey meat were shipped to different destinations abroad. Over 29 million pounds of the turkey went to Mexico, a 52 per cent increase from the previous year. Exports to China, the second largest US turkey market, were over 5.8 million pounds in January 2011. Exports to Canada, the third largest US turkey market, were 28 per cent below January 2010. Mexico, China and Canada accounted for 75 per cent of US total turkey shipments in January 2011, compared with 70 per cent in January 2010.

Further Reading

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March 2011