Broiler Production Rises by 1.7 Per Cent in June

Broiler meat production in June totaled 3.1 billion pounds, up 1.7 per cent from the previous year, boosting total production for second-quarter 2008 to 9.4 billion pounds, 3.8 per cent higher than in the same period in 2007. This is the fifth consecutive quarter of year-over-year increases in broiler meat production. In first-half 2008, broiler meat production was 18.5 billion pounds, up 4.7 per cent from a year earlier.

Over the first half of 2008, the number of broilers slaughtered was 4.5 billion, up 2.5 per cent from a year earlier. The average broiler liveweight at slaughter during the first 6 months of 2008 was 5.57 pounds, 1.6 per cent higher than in first-half 2007. The increase in the number of birds slaughtered and the increase in the average liveweight were important parts of the overall increase in broiler meat production, but the output was also boosted by the fact that the amount of meat produced per bird has also been consistently higher than last year.

Broiler meat production is expected to total 18.45 billion pounds during second-half 2008, up only marginally from the same period in 2007. The growth in meat production is expected to come from higher bird weights at slaughter as the number of birds slaughtered is expected to decline somewhat. With integrators facing both higher energy and feed costs, there is little incentive in the short term to expand production except for strong demand in the export market. However, with the current reductions in the expected 2009 prices for corn and soybean meal, the forecast for broiler production in 2009 was increased to 36.7 billion pounds, up 100 million pounds from the previous forecast, but still slightly lower than in 2008.

The number of chicks being placed weekly for grow-out has averaged approximately 173 million over the last 5 weeks (July 12 to August 9), down 2.1 per cent from the same weekly period in 2007. Weekly chick placements have been below a year earlier for some time now, but over the last several weeks, the numbers of eggs being placed in incubators has been sharply lower (down more than 3 per cent) than the previous year. After hatching, these chicks are expected to be ready for processing around the second half of September.

Over the first 7 months of 2008, retail prices for broiler products averaged higher than a year earlier. Prices for whole legs averaged $1.39 per pound, up 6.2 per cent over the same period in 2007. Prices for bone-in breast meat rose to $2.38 per pound, 4.9 per cent higher than the previous year and prices for fresh whole chickens averaged $1.18 per pound, 7.8 per cent higher. With a slowdown in production growth forecast, retail prices for broiler products are expected to remain above year-earlier levels through the remainder of 2008 and into 2009.

Turkey Production Increases in First-Half 2008

Turkey meat production during the first 6 months of 2008 was 3.1 billion pounds, up 7.3 per cent compared with a year earlier. This increase was due to a combination of a 4.4-per cent increase in the number of birds being slaughtered and a 2.3-per cent increase in the average liveweight of turkeys.

The forecast for turkey meat production in the second half of 2008 is for a one-per-cent increase compared to the same period in 2007. The growth in production is expected to come chiefly from heavier birds, as the number of turkey poults placed for grow-out during the first 6 months of 2008 totaled 156 million, down slightly from a year earlier.

Even with a strong market for turkey meat exports, the increase in production over the first half of the year is expected to result in higher turkey stocks for the remainder of 2008. Higher stocks of whole bird have not yet impacted wholesale whole birds, with prices of 8- to 16-pound whole hens in the Eastern market averaging $0.93 a pound in July. This is 7 per cent higher than in July 2007 and 24 per cent higher than in July 2006. Wholesale prices for whole turkeys are expected to remain higher than their year-earlier levels through the remainder of 2008.

Egg Production Falls in First-Half 2008

After rising on a year-over-year basis in all four quarters of 2006, total egg production fell in five of the last six quarters comprising all of 2007 and the first two quarters of 2008. In the first half of 2008, production of table eggs for consumption was 3.17 billion dozen, down slightly from first-half 2007. This decline in table eggs was partially offset by a small increase in hatching egg production to 559 million dozen. The increase in the production of hatching eggs occurred in the first quarter as broiler integrators were still expanding production in response to higher prices and and a strong export market.

Table egg production is forecast to be slightly higher in the second half of 2008, compared with last year, but to remain below the level of production seen in second-half 2006. Although higher feed and energy prices have raised producer costs, the high prices in the first quarter of 2008 have given producers some incentive to increase production.

The decreased production of table eggs resulted in sharply higher prices for eggs during the first quarter of 2008. In the second quarter of 2008, wholesale egg prices in the New York market averaged $1.17 per dozen, 27 per cent higher than in second-quarter 2007, but down considerably from first-quarter 2008. Prices fell below a dollar per dozen in July, but by the beginning of August, prices had rebounded to approximately $1.10 per dozen. Wholesale egg prices in the New York market in third-quarter 2008 are expected to be approximately the same as last year, while prices in fourth-quarter 2008 are expected to average somewhat lower than last year.

June Broiler Exports Are Up Slightly from a Year Ago

Broiler exports for the month of June totaled 559 million pounds, up by 2 per cent from a year ago. Strong purchasing power of foreign currencies in the US continues to give rise to larger shipments of broiler meat. In June 2008, Korea and Singapore increased their imports of broiler meat from the United States and helped the total broiler shipments surpass June 2007 exports. Growth in broiler shipments is expected to continue to increase throughout this year.

2008 Broiler Exports Are Up in the Second-Quarter from Last Year

US broiler shipments in the second quarter of 2008 totaled 1.79 billion pounds, up considerably (25 per cent) from shipments during the same period a year earlier. The reason for the surge in broiler exports was due primarily to the depreciation of the US dollar, which increased the purchasing power of certain broiler-importing countries. Shipments are expected to continue strong throughout 2008 and surpass 2007's record broiler shipments.

Turkey Shipments Continue Strong in June

Turkey shipments totaled 55 million pounds in June 2008, up about 23 per cent from a year ago. The increase in turkey shipments recorded for June 2008 was stimulated mainly by stronger purchasing power exercised by foreign countries in US markets. China, Mexico and Hong Kong have shown the greatest increases in turkey shipments since June 2007. Shipments of turkey in 2008 are projected to exceed total shipments recorded for 2007 by almost 14 per cent.

Turkey Exports Finish the Second Quarter Strong

Turkey exports totaled 160 million pounds for the second-quarter of 2008, up 20 per cent from last year’s second-quarter. This increase is attributed to a strong demand for turkey meat from importing countries such as Taiwan and Hong Kong and a favorable exchange rate. In comparison to the second quarter of 2007, exports to China rose by 250 per cent in the second quarter of 2008 and shipments to Hong Kong increased 72 per cent over the same time period. While Mexico continues to be the largest importer of US turkey meat, its second-quarter turkey imports increased only by 4 per cent from the 2007 second quarter.

Further Reading

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August 2008