Summary

Broiler meat production in 2009 was 35.5 billion pounds, down 3.8 per cent from the previous year. The outlook for 2010 is for very gradual increases in production during the first three quarters of the year, with stronger growth in the fourth quarter, as economic conditions slowly improve. Turkey meat production in 2010 is forecast at 5.58 billion pounds, down 1.6 per cent from 2009. In response to lower whole bird prices, at the end of 2008 and the first half of 2009, the number of poults placed was down throughout 2009. Table egg production is expected to increase very slightly in 2010, reaching 6.5 billion dozen.

Broiler Production Forecast at 35.9 Billion Pounds in 2010

The outlook for broiler production in 2010 is for small production increases during the first three quarters of the year, capped off by a stronger fourth-quarter increase. The slow growth in production in 2010 is not expected to translate into higher prices in the first half of the year as expected lower export volumes will direct more of production to the domestic market. The estimate for broiler meat production in 2010 is 35.9 billion pounds, up 1.2 per cent from 2009. In 2010, the broiler industry is expected to face gradually increasing domestic demand, brought on by slowly improving economic conditions and lower unemployment toward the end of the year.

Broiler meat production in fourth-quarter 2009 totalled 8.8 billion pounds, down 0.7 per cent from fourth-quarter 2008. The decrease was due to a lower number of broilers being slaughtered (down 2.2 per cent), as average liveweight at slaughter rose by one per cent. The average liveweight per bird at slaughter in fourth-quarter 2009 was a record 5.66 pounds.

After declining in October, US broiler meat production increased in the last two months of 2009. In December, production was reported at 2.95 billion pounds, up 0.6 per cent from the previous year. The number of birds slaughtered fell by 1.4 per cent, but it was more than offset by a 1.6-per cent increase in the average liveweight at slaughter to 5.66 pounds.

Broiler meat in cold storage at the end of January 2010 totalled 607 million pounds, down 10 per cent from the previous year. With slowly growing production in 2010 and falling exports, ending stocks are expected to be higher in all four quarters of 2010, but to remain below 2008 levels. The decrease in cold storage holdings at the end of January was the result of falling levels of stocks for a number of broiler products. One exception was thigh meat, which rose sharply (up 63 per cent) to 23 million pounds. The reduction in cold storage holdings has been reflected in gradually strengthening prices for most broiler products.

In January 2010, prices for boneless/skinless breast meat averaged $1.27 per pound in the Northeast market, up 1.0 per cent from the previous year and over seven cents per pound higher than in December 2009. Breast meat prices are expected to benefit from gradually improving economic conditions, especially if restaurant sales begin to improve. Leg quarter prices also rose, averaging 37 cents per pound in January 2010 compared with 35 cents per pound the previous year. Leg quarter prices were strong during the first half of 2009 as production declines and a strong export market placed upward pressure on prices. The forecast declines in exports in 2010 are likely to place some downward pressure on leg quarter prices, but they will be partially countered by small gains in production and relatively low stock levels at the beginning of the year.

Broiler Exports Fall to 6.84 Billion Pounds in 2009

Overall broiler exports declined to 6.84 billion pounds in 2009, a decrease of two per cent from the previous year. While shipments were lower to a number of countries, a major portion of the decline was due to the 11-per cent drop in shipments to Russia that resulted from a reduction in the total tariff-rate quota, with the percentage allocated to the United States remaining relatively steady with prior years. Another major portion of the decline was a 51-per cent decline in exports to the Ukraine. The reduced shipments to Russia and the Ukraine were partially offset by strong growth in exports to Mexico and a small increase in shipments to the combined China/Hong Kong market. Although shipments to Cuba in 2009 only increased one per cent from the previous year, it was the fourth largest market for US broiler products.

In 2010, broiler exports are forecast at 5.83 billion pounds, 15 per cent lower than in 2009 and down 16 per cent from 2008. Much of the expected decline is due to trade issues with both Russia and China, which would reduce access to these markets (the two largest). Lower shipments to these markets are expected to be partially offset by gains in other countries that are expected to be helped by a relatively weak dollar.

Turkey Meat Production Forecast Lowered for 2010

Turkey meat production in 2010 is forecast to total 5.58 billion pounds, down 1.6 per cent from 2009. The production decrease follows a year with strong decreases in production and relatively weak wholesale prices for whole turkeys. The largest declines in production are expected to come in the first half of 2010, with year-on-year production increases expected in the third and fourth quarters. The lower meat production is expected to result chiefly from a smaller number of birds slaughtered, as average live weights at slaughter are expected to remain relatively close to year-earlier levels. Turkey producers, like other livestock producers, faced a very uncertain market in the second half of 2008 and throughout 2009 in terms of declining domestic demand, and as a result the number of poults placed for grow-out was significantly lower in 2009.

Turkeys slaughtered in 2009 numbered 246 million birds, down 9.4 per cent from the previous year, and meat production fell by 9.3 per cent to 5.7 billion pounds. The lower number of turkeys slaughtered was the chief reason for the decline, as the annual average liveweight for turkey at slaughter in 2009 was 28.9 pounds, down only marginally from the previous year.

Turkey meat production in fourth-quarter 2009 was 1.44 billion pounds, down 8.9 per cent from the previous year. This was a continuation of the strong declines in production seen in the first three quarters of 2009. As with the annual data, a sharply lower number of birds slaughtered (67.3 million) was the chief cause of the decline. The liveweight of turkeys going to slaughter in the fourth quarter of 2009 was 28.6 pounds, down less than one per cent from the previous year.

With the strong decreases in turkey meat production during 2009, cold storage holdings for whole turkeys and turkey parts have fallen to levels well below the previous year. At the end of January 2010, turkey stocks totalled 300 million pounds, down 33 per cent from a year earlier. Stocks of whole birds declined the most, totalling only 110 million pounds at the end of January, down 43 per cent from the previous year. Stocks of other turkey meat products have also decreased strongly, falling to 190 million pounds, a 25-per cent decrease from the previous year. With turkey production in the first half of 2010 again expected to decline from the previous year, turkey ending stocks are expected to remain below year-earlier levels through the first three quarters of 2010, but to move slightly higher in the fourth quarter as production begins to gradually expand.

Prices for whole hens in the Eastern market averaged approximately 77 cents per pound in January 2010, an increase of seven per cent from January 2009 and up about seven cents per pound from December 2009. With lower production during the first half of 2010 and much lower beginning stocks of whole birds and other turkey meat, hen prices in the Eastern market are expected to average higher than the previous year through all four quarters of 2010.

Turkey Exports Fall by 21 Per Cent in 2009

Exports of turkey products totaled 534 m illion pounds in 2009, down 21 per cent from the previous year. Shipments to the four largest markets – Mexico, China, Russia and Canada – dropped significantly. The two markets with the largest gains were the Dominican Republic and Cuba, but these gains there were very small compared with the overall declines.

In 2010, turkey exports are forecast to expand slightly to 545 million, up two per cent. Much of the growth is expected to come in Mexico, the largest market, as its economy gradually recovers. Trade with a number of other markets is also expected to be boosted by improved economic conditions.

Table Egg Production at 6.5 Billion Dozen in 2010

Table egg production is expected to increase very slightly in 2010, reaching 6.5 billion dozen, marginally higher than the 6.47 billion dozen produced in 2009. The increase in production is expected to come in the first three quarters of the year, with fourth-quarter production expected to be virtually the same as the previous year. Hatching egg production for 2010 is forecast at 1.07 billion dozen, up one per cent from 2009, reflecting higher demand as broiler production gradually increases.

Table egg production reached 1.66 billion dozen in fourth-quarter 2009, giving a total for the year of 6.47 billion dozen, up one per cent from the previous year. Table egg production was higher in most months of 2009, and the higher table egg production raised total egg production above year-earlier levels in the last three quarters of 2009, offsetting falling production of hatching eggs. The decline in hatching eggs was due to lower production of meat–type bird eggs for broiler production. The number of birds in the broiler-breeder flock in 2009 was below the previous year during the first 11 months.

With small increases in egg production and a relatively strong export market, domestic table egg prices began to strengthen towards the end of 2009 after being well below the previous year’s prices during the first three quarters. The average wholesale price for a dozen large eggs was $1.18 in fourth-quarter 2009, down four per cent from the same period in 2008, but prices in November and December were down less than one per cent from a year earlier. In January, table egg prices continued to strengthen, averaging near $1.30 per dozen. With little growth forecast in production, table egg prices in 2010 are expected to remain well above 2009 throughout the year.

Egg Exports Rise to 242 Million Dozen

After falling by 18 per cent to 206 million dozen in 2008 as a result of strong domestic prices, total egg exports increased by 17 per cent in 2009 to 242 million dozen. With the exception of Japan, shipments of eggs and egg products rose strongly in four (Canada, Hong Kong, Mexico, and Germany) of the top five markets.

With only a small increase in production expected in 2010, egg prices are forecast to average higher in 2010. This, in turn, is expected to reduce exports to 220 million dozen, a decline of nine per cent. Some of the decline may come from lower demand for egg products from the EU-27 countries.

Further Reading

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February 2010