Summary

Broilers - with continued higher chick placements, broiler meat production is expected to expand in fourth-quarter 2007 and into first-half 2008. With increasing production, prices for many broiler products will be under some downward pressure. Some of the higher production is expected to be taken up by a strong export market.

Turkey - prices remained relatively strong through the end of December. Whole hen turkey prices averaged 82 cents per pound in 2007, the fourth consecutive year that average prices have risen.

Eggs - prices remained at very high levels through the end of 2007, as a smaller table-egg laying flock resulted in lower production. Egg prices are expected to gradually go down as producers respond to the high prices by raising production.

Broiler shipments were up, while turkey shipments were slightly above a year ago. Broiler exports totaled 605 million pounds, an increase of 10 percent, while turkey exports totaled 48 million pounds, an increase of less than 1 percent from a year ago. The broiler shipment forecast for the fourth quarter was increased by 90 million pounds due to a strong demand for broiler meat.

Broiler Production Expected Up Only Slightly in Fourth-Quarter 2007

During the fourth quarter of 2007, eggs set in incubators averaged 214 million per week, up 3.7 percent from the same period a year earlier. Chicks placed for growout averaged 173 million per week, an increase of 4 percent from the same period in 2006. The result has been a higher number of birds available for slaughter and increasing broiler meat production. This increase in birds going to slaughter and broiler meat production is expected to continue into first-half 2008, as eggs placed in incubators and chicks placed for growout have continued to be well ahead of their year-earlier levels through the end of December.

Broiler meat production in November was 2.99 billion pounds, an increase of 3.3 percent from a year earlier. The number of birds slaughtered was up 1.0 percent from the previous year, and this increase was compounded by a 2.0 percent increase in the average liveweight at slaughter to 5.63 pounds. Broiler meat production in December is expected to be up somewhat from the previous year, as chick placements have been consistently higher than a year earlier throughout all of October and November and average broiler liveweight at slaughter has been trending higher over the last several months.

Broiler stocks at the end of November totaled 697 million pounds, up about 37 million pounds from the end of October and 1.7 percent higher than at the end of November 2006. Stocks of whole birds totaled 17.3 million pounds at the end of November, down 2 million pounds from the same time a year earlier. The stock levels for many of the specific products were lower than a year earlier, but they were more than offset by gains in stocks for leg quarters and a relatively small increase in the Other Products category. Stocks of leg quarters were reported at 67 million pounds at the end of November, 17.5 million pounds higher than the previous year (up 35 percent). Even though this is a strong increase from the same period in 2006, so far in the second half of 2007, stocks of leg quarters have been relatively stable, ranging from 58 to 67 million pounds. Stocks of paws rose to 22 million pounds in November, up 49 percent from November 2006. Broiler stocks are expected to total 675 million pounds at the end of 2007, down about 70 million pounds from the same time in 2006. However, with broiler production expected to increase in the first half of 2008, ending stocks for the first and second quarters are expected to be above those for the same period in 2007.

With increases in broiler production over the last several months, a number of broiler product prices have been slowly trending downward from the levels they reached at the end of the second quarter and the beginning of the third quarter of 2007. After reaching a high of 81.3 cents per pound in June, the 12-City monthly average price for whole birds fell to 70.6 cents per pound by October. However, as the broiler supply situation tightened, prices have started moving higher. In early January, the weekly average 12–City whole bird price has been as high as 78 cents per pound. This pattern has been repeated for a number of broiler parts. Prices in the Northeast market for leg quarters and bone-in thighs were both higher in December compared with their November average.

Turkey Prices Higher in Fourth Quarter 2007

Although peak prices for whole turkeys in 2007 did not reach the levels they did in 2006, the average price in fourth quarter 2007 was 90.8 cents per pound for whole hens in the Eastern market, about a penny higher than the previous year. The average price for all of 2007 was 82.1 cents per pound, marking the fourth consecutive year of higher overall prices. In the first quarter of 2008, whole turkey prices are expected to remain above year-earlier levels, but higher production of turkeys, and to a lesser extent broilers, are expected to put downward pressure on prices during the remainder of 2008, with the overall price for 2008 expected to be down 5 percent from the previous year.

Turkey production in November was 524 million pounds, 3.9 percent higher than in November 2006. The increase in turkey meat production was chiefly due to a higher number of birds slaughtered and higher average weights. The number of turkeys slaughtered in November was up 1.5 percent from the previous year, and the average weight at slaughter rose 1.8 percent to 27.6 pounds. In addition, the average meat production per bird rose by 2.4 percent. Turkey meat production in December 2007 is also expected to be higher than the previous year, as the number of birds slaughtered and the average liveweight are both expected to remain above the previous year’s levels. The estimate for turkey meat production in the fourth quarter was increased by 10 million pounds to 1.53 billion, up 3.9 percent from fourth-quarter 2006. The turkey meat production estimate for 2008 is 5.94 billion pounds, up less than 1 percent from 2007, with higher production in the first half of the year being moderated by slightly lower production in the second half of 2008.

Ending stocks for all turkey products in fourth-quarter 2007 are expected to be 235 million pounds, up 8 percent or 17 million pounds from the end of 2006. At the end of November, cold storage holdings for turkey totaled 213 million pounds, down slightly from a year earlier. The decrease was due to lower cold storage holdings of whole birds, as stocks of turkey parts were up slightly. During the first 11 months of 2007, stocks of whole birds compared with the previous year varied widely. In January 2007, whole-bird stocks were 42 percent higher than the previous year, yet by May they were 3 percent down from the same period in 2006. Stocks then moved higher in August, with whole-bird stocks 22 percent above their year-earlier levels. Ending stocks for turkey parts were mostly lower in 2007, with a period in April to June where they averaged over 20 percent below the previous year. With higher turkey production expected in 2008 and more broiler products available, turkey stocks in 2008 are expected to be above their year-earlier levels.

Eggs Prices $1.41 in Fourth-Quarter 2007

With shell-egg production continuing to be below year-earlier levels through November, wholesale egg prices have been very high. The wholesale price for a dozen grade A large eggs in the New York market averaged $1.41 in fourth quarter 2007, up 58 percent from the same period in 2006. For 2007, prices averaged $1.14 per dozen, 43 cents higher than the previous year. Prices moved higher throughout the fourth quarter, with prices averaging $1.14 in October, $1.49 in November, and $1.60 in December. Although production is expected to gradually increase, shellegg prices through the first half of 2008 are expected to remain considerably higher than in 2007.

Table-egg production in November was reported at 535 million dozen, down 1.3 percent from November 2006. Over the first 11 months of 2007, table-egg production has consistently been below year-earlier levels. Table-egg production for fourth-quarter 2007 is expected to total 1.64 billion dozen, a 10-million dozen reduction from the previous estimate. The estimates for the first three quarters of 2008 were also reduced, but the estimates are still slightly higher than production in the first three quarters of 2007.

The reason for the lower production throughout 2007 has been that the table-egg laying flock has been smaller on a year-over-year basis throughout 2007. In November, the table-egg laying flock was reported to be 284.1 million birds, down 2 percent from November 2007. While the table-egg flock size in December is expected to remain below a year earlier, it is expected to gradually increase in 2008. The basis for this expectation is that over the September to November period, the number of hens in the egg-type hatching supply flock has been higher than in the same months in 2006. The egg-type hatching supply flock is the population of hens that supplies egg-type hens that go into the table-egg production flock. To increase the size of the table-egg flock, the number of hens in the hatching-egg supply flock has to increase first. Then the number of replacement hens going into the table-egg production flock increases.

Poultry Trade

November Broiler Shipments Reach a Record High

Broiler shipments in November 2007 totaled a record 605 million pounds, exceeding 2006 shipments by 10 percent. A strong demand, stemming mostly from a weakening U.S. dollar, continues to be the primary reason for the surge in broiler shipments. Accounting for most of the increase in total shipments for November were Russia, Ukraine, and Iraq. Shipments to Russia increased by 20 percent, while shipments that went to Ukraine and Iraq rose by 36 and 44 percent, respectively. Although Russia, the largest broiler market for the U.S., is drawing close to fulfilling its tariff-quota with the U.S., the purchasing power of the Russian ruble has made U.S. broiler meat more attractive. Like Russia, many other importers of U.S. broiler meat are capitalizing on such trade opportunities by maximizing the value of their currency in the U.S. market place.

Broiler shipments for the fourth quarter were increased by 90 million pounds due to a strong demand for broiler meat, raising expected total shipments for the fourth quarter to 1.540 billion pounds. Total broiler exports have received a boost due to a weakened U.S. dollar, and are expected to be at an all time high at the end of 2007.

Turkey Shipments Remained Strong in November

Turkey shipments totaled 48 million pounds in November, up slightly less than 1 percent from a year ago. The primary reason for the increase in turkey shipments was a strong demand driven by a weakened U.S. dollar. In spite of a small dropoff in turkey shipments to Mexico, total turkey exports remained strong. Russia and China were the markets responsible for most of the increase in shipments. Shipments to Russia, the third-largest turkey market, increased by 53 percent from a year ago, while shipments to China increased by 16 percent over the same period. Turkey exports are expected to remain strong throughout the fourth quarter, due mostly to a weakened U.S. dollar.

Further Reading

- You can view the full outlook report by clicking here.

January 2008