US Poultry Outlook Report - February 2007

By U.S.D.A., Economic Research Service - This article is an extract from the February 2007: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.
calendar icon 26 February 2007
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USDA Economic Research Service


Broiler meat production in 2006 was 35.7 billion pounds, up only 1 percent from the previous year. The outlook for 2007 is for declines in production in the first half of the year, with growth picking up in second-half 2007 as stronger prices help to boost production.

The production estimate for 2007 was reduced to 36 billion pounds from last month due to the continued lower numbers of chicks being placed and expected higher feed costs. Turkey meat production in 2007 is forecast at 5.78 billion pounds, up 1.7 percent from 2006. The increase in production follows 2 years of relatively strong prices for whole turkeys and most turkey products.

Broiler Production in 2007 To Increase Slightly

Broiler production in 2007 is expected to show no growth in the first half of the year, but growth is expected to pick up in the second half as a result of stronger prices. The quarterly production estimates for 2007 from last month were all reduced in light of the continued lower number of eggs being placed in incubators and the lower numbers of chicks placed for growout.

The revised estimate for broiler meat production in 2007 is 36 billion pounds, up only 0.8 percent from the previous year. In 2007, the broiler industry will be pressured by higher feed costs. Broiler meat production in fourth-quarter 2006 totaled 8.78 billion pounds, down 1.4 percent from the same quarter in 2005. The decrease was the result of a lower number of broilers being slaughtered (down 0.8 percent) and a lower meat yield per bird. The average liveweight per bird in the fourth quarter was 5.53 pounds, up slightly (0.7 percent) from the previous year. Broiler meat production for all of 2006 was 35.7 billion pounds, up only 1 percent from the previous year.

U.S. broiler meat production in December 2006 was estimated at 2.7 billion pounds, down 7.3 percent from the previous year. The large decline in December is primarily the result of one less slaughter day than in 2005. However, the decline in meat production was larger than expected (5.9 percent) given the size of the decline in the total liveweight of broilers slaughtered. In December, the number of broilers slaughtered was 677 million, down 5.7 percent from to a year earlier.

Along with the decrease in the number of birds slaughtered, the average weight per bird fell to 5.47 pounds, 0.2 percent lighter than in December 2005. These changes resulted in a total broiler liveweight at slaughter of 3.7 billion pounds, 5.9 percent lower than the previous year. Normally, changes in broiler meat production closely parallel the changes in the total liveweight of birds at slaughter, with the ready-to-cook (RTC) meat yield per pound of liveweight being relatively stable. December was the second consecutive month in a row where the average yield of meat per pound of liveweight was down significantly (0.9 percent in November and 1.6 percent in December).

Cold storage holdings of broiler meat products at the end of December 2006 totaled 756 million pounds. This is 18 percent lower than at the end of 2005 when cold storage holding were exceptionally high, but still considerably higher than anticipated given declines in broiler meat production in November and December and generally higher prices for most broiler products.

Much of the increase in cold storage holdings from November to December was the result of increased stocks of breast meat and leg quarters. With lower growth in broiler meat production forecast for first-half 2007, cold storage holdings are projected to remain below their year-earlier levels through the first and second quarters of 2007. As broiler meat production has slowed, prices for almost all broiler products have continued to move higher.

In January, boneless/skinless breast meat averaged $1.27 per pound in the Northeast market, up 30 percent from the previous year and 12 cents per pound higher than the December average. Leg quarter prices also rose, going from 31.6 cents per pound in December to 34.1 cents per pound in January. The January 2007 price is a 42-percent increase over a year earlier. With lower production expected, prices for most broiler products are expected to move higher through the first half of 2007.

Turkey Meat Production Up in 2007

Turkey meat production in 2007 is forecast to total 5.78 billion pounds, up 1.7 percent from 2006. The increase in production follows 2 years of relatively strong prices for whole turkeys and most turkey products. Turkey producers, like other livestock producers, will face significant increases in feed costs in 2007, which will narrow margins even if prices for whole birds and products remain strong.

The number of turkeys slaughtered in 2006 was 255 million birds, up 2.9 percent from the previous year, and meat production rose by 3.3 percent to 5.69 billion pounds. The reason that turkey meat production was not higher was that average turkey liveweights were up only 0.5 percent to 28.14 pounds. Average weights had been higher in first-half 2006, but fell as the Thanksgiving period approached.

Turkey meat production in fourth-quarter 2006 was 1.47 billion pounds, 4.8 percent higher than the previous year and very close to earlier forecasts. The total number of birds slaughtered was 68 million, up 4.8 percent from the previous year, and the average weight of turkeys in fourth-quarter 2006 was 27.5 pounds, 0.5 percent higher than in fourth-quarter 2005.

Cold storage holdings for whole turkeys and turkey parts were 221 million pounds at the end of December, up 7.3 percent from the same time in 2005. Stocks of whole birds totaled 64.9 million pounds, up strongly from the previous year (by 23 percent). Stocks of whole birds have been higher in November and December 2006 than a year earlier, reversing the trend of the first 10 months of 2006, when whole bird stocks were down at least 10 percent from the previous year.

With broiler and turkey production not expected to increase much in 2007 and the turkey export market expected to remain strong, turkey cold storage holdings are forecast to be about the same as in 2006.

Prices for whole hens in the Eastern market fell to 67.6 cents per pound in January 2007, only 1 percent lower than in January 2006, but a large drop from the almost $1 dollar per pound for whole hens in November 2006. However, weekly prices indicate that whole-bird prices are beginning to move higher, and hen prices for first-quarter 2007 are forecast at 70 to 72 cents per pound, up a few cents from the average in first-quarter 2006.

Further Information

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

February 2007
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