After falling in the first and second quarters, broiler meat production is expected to increase on a year-over-year basis in the second half of 2007. Prices for broiler products are expected to moderate as production increases. Turkey meat production continues to grow, but strong domestic demand and exports have kept stocks low and prices above those of the previous year.

Broiler Production Falls by 1.3 Percent

With broiler meat production down 4.2 percent in June, the total for the second quarter of 2007 was 9.0 billion pounds, down 1.3 percent from the same period in 2006. This is the fourth consecutive quarter of year-over-year declines in broiler meat production. In the first half of 2007, broiler meat production was 17.6 billion pounds, down 2.7 percent from the same period in 2006.

Over the first half of 2007, the number of broilers slaughtered was 4.4 billion, down 1.4 percent from a year earlier. The average broiler liveweight at slaughter during the first 6 months of 2007 was 5.48 pounds, up 0.3 percent from the first half of 2006. The relatively small decline in birds slaughtered and the increase in the average liveweight normally would have been expected to produce a larger amount of meat. However, over the first 6 months of 2007, the amount of meat produced per bird has consistently been lower than in the previous year.

Broiler meat production is expected to total 18.1 billion pounds during the second half of 2007, up 2.3 percent from the same period in 2006. The growth in production is expected to come from the combination of a larger number of birds being placed for growout and slightly higher average liveweights at slaughter. The incentive for increasing broiler production has come from the much higher prices that processors have received over the last 6 months. However, this increase in prices has been somewhat offset by higher feed and energy costs. If feed prices only increase moderately in the coming months, processors will have some incentive to continue the expansion in production that is expected in the second half of 2007.

The number of chicks being placed weekly for growout has averaged approximately 178 million over the last 5 weeks (July 14 to August 11). This is up 2.2 percent from the same weekly period in 2006. Weekly chick placements have been above the previous year for approximately the last 4 months, and now the higher placement rate is expected to push up production in the third quarter.

Broiler Exports Surge in June to 548 Million Pounds

After being below the previous year in March, April, and May broiler exports surged in June to 548 million pounds, a 32-percent increase from June 2006 and one of the highest monthly totals ever. In addition, the broiler export data for 2006 has been revised, with the total for 2006 being lowered to 5.205 billion pounds, down 68 million pounds from the previous estimate. Most of this revision was due to a lowering of exports in the first quarter of 2006 to 1.27 billion pounds.

With large shipments in June 2007 and the revisions to 2006 exports, the total pattern of exports has changed. With these changes, broiler exports in the first quarter of 2007 were up slightly (0.4 percent) and exports in the second quarter were 7.4 percent higher at 1.39 billion pounds.

The increase in broiler exports in June 2007 was mostly the result of larger shipments to Russia, China, and Angola. Exports to Russia totaled 209 million pounds (up 89 percent), and shipments to Lithuania also were up strongly to 53 million pounds.

Exports to Hong Kong/China were 69 million pounds, compared with only 39 million pounds in June 2006. Shipments to Angola totaled 24 million pounds, 286 percent higher than in the previous year. One area where broiler exports have fallen sharply is to Romania. Broiler exports to Romania have fallen due to its accession to the EU. As part of the EU, Romania now can not import U.S. broiler products. It had imported over 100 million pounds in the first half of 2006.

With a higher volume of exports and higher prices for broiler products in the first half of 2007, especially leg quarters, the value of broiler exports was much higher than the previous year. In the first half of 2007, the value of broiler exports rose to $1.18 billion, which is $360 million higher than in the first half of 2006 (up 44 percent).

Broiler exports in the second half of 2007 are estimated at 2.7 billion pounds, up 2.3 percent from the same period in 2006. The expected increase is due in large part to the expectation that broiler prices in the second half of 2007 will decline somewhat from the high levels seen in the first half of the year.

Turkey Production Increases in First-Half 2007

Turkey production during the first 6 months of 2007 was 2.88 billion pounds, a 3.2- percent increase compared with a year earlier. The increase in turkey meat production is due to a 3.6-percent increase in the number of birds being slaughtered, as the average liveweight of birds at slaughter in the first 6 months of 2007 was down slightly (0.3 percent) from the first 6 months of 2006. The forecast for turkey meat production in the second half of 2007 is for a 1.7-percent increase compared with the previous year to 2.94 billion pounds. The growth in production is again expected to come from a larger number of birds slaughtered, as the number of turkey poults placed for growout during the first 6 months of 2007 totaled 156 million, up 5 percent from a year earlier. Even with higher turkey meat production expected in the second half of 2007, turkey stocks are expected to remain lower than the previous year.

Even with the increase in production, the increase in turkey exports has helped keep turkey stocks at relatively low levels, which has in turn meant that turkey prices have continued to be well above their year-earlier levels. In July, the price of 8-16 pound whole hens in the Eastern market was 87 cents a pound, up 16 percent from a year earlier and 20 percent higher than the July 2005 price. Wholesale prices for whole turkeys are expected to remain higher than their year-earlier levels through the remainder of the year.

Turkey Exports Rise by 6 Percent

Over the first 6 months of 2007, U.S. turkey exports totaled 260 million pounds, up 6 percent compared with the previous year. Exports were higher to many markets, primarily China, Russia, Canada, and Mexico.

In addition to the higher volume of exports, the average unit price of turkey exports was higher in first-half 2007. The total value of turkey exports in the first half of 2007 was $185 million, a 15-percent increase from the same period in 2006. Turkey exports over the first half of 2007 were influenced by the high prices for most broiler products. With a gradual leveling off or lowering of broiler prices expected in second-half 2007, turkey exports are expected to have greater competition. The forecast for the second half of 2007 is for exports to total 295 million pounds, down somewhat from the same period in 2006.

Egg Production Falls in First-Half 2007

After rising on a year-over-year basis in all four quarters of 2006, total egg production has fallen in the first two quarters of 2007. Production of table eggs for consumption was 3.18 billion dozen in the first half of 2007, down 1.4 percent from first-half 2006. The decline in table eggs was partially offset by a small increase (1.6 percent) in the production of hatching eggs to 548 million dozen. The increase in the production of hatching eggs occurred mostly in the second quarter as broiler producers began to expand production to allow for higher meat production in the second half of 2007.

The smaller production of table eggs, along with a strong export market, has resulted in higher prices for eggs for most of the first half of 2007 and is continuing into the third quarter. Wholesale prices in the New York market averaged $1.15 per dozen in July, and weekly prices had gone as high as $1.19 per dozen in the beginning of August. Wholesale egg prices in the New York market are expected to average approximately $1.08 to $1.12 per dozen in the third quarter, but to decline slightly in the fourth quarter, as traditional high demand is offset by higher production.

Egg exports in the first half of 2007 totaled 102 million dozen (these are shell eggs and egg products). In the traditional large markets, higher exports to Mexico and Hong Kong were offset by smaller shipments to Canada and Japan. The overall total has been boosted by much higher shipments to China and the EU. Exports to China in the first half of 2007 totaled 3.0 million dozen, up 217 percent from the same period in 2006. Shipments to the EU have been concentrated in the United Kingdom, the Netherlands, Germany, and Denmark. Together, shipments to these countries totaled 18 million dozen in the first 6 months of 2007, 190 percent higher than the previous year.

Further Information

For more information view the full Livestock, Dairy and Poultry Outlook - August 2007 (pdf)

August 2007