Highlights

Broiler meat production is expected to total 8.87 billion pounds in second quarter 2009, down six per cent from a year earlier. After declining strongly in the first half, broiler meat production in the second half of 2009 is expected to be somewhat closer to the previous year, with fourth-quarter 2009 production even slightly higher.

Turkey meat production is expected to decline strongly throughout 2009 but then to grow slightly in 2010. However, even with these gains, turkey meat production in 2010 is expected to be down 5 per cent from 2008.

Broiler Meat Production Down 6.3 Per Cent in April

Total broiler meat production in April 2009 was 3.0 billion pounds, down 6.3 per cent from the previous year. Processors reported they had slaughtered 721 million broilers in April 2009, a decrease of 6.6 per cent from the previous year. In addition, the average liveweight of those broilers at slaughter was 5.57 pounds, down slightly from a year earlier. The decreases in the number of birds slaughtered and their average liveweight were partially offset by a small increase in the average meat yield per bird.

With the weekly numbers of chicks placed for grow-out continuing to be down four to six per cent, the total number of birds slaughtered in the second quarter is also expected to be lower by about the same percentages. This is expected to translate into a six-per-cent decline in meat production as average weights at slaughter have been close to those of a year earlier.

Overall meat production in third-quarter 2009 is now expected to be just over 9.0 billion pounds, 4.6 per cent less than for the same period in 2008. In reaction to upward pressure on broiler meat prices, the number of chicks placed for grow-out is expected to gradually increase but to remain below that of third-quarter 2008. By the beginning of fourth-quarter 2009, chick placements are expected to be only slightly lower than the previous year, leading to broiler meat production in fourth-quarter 2009 just above last year.

Over the last several months, prices for a number of broiler products have begun to strengthen, driven by lower production and stock levels. Prices in May for most broiler products were still slightly lower than a year earlier. The 12-city wholesale price for whole broilers averaged almost 83 cents per pound, up about 6.3 cents per pound from April, and about two per cent higher than the previous year. However, prices for other broiler parts were slightly lower than a year earlier. Prices for leg quarters averaged 47 cents per pound in May, up over nine cents per pound from April, but down about one per cent from a year earlier. Thigh meat product prices in May also increased from April but still remained lower than the previous year. The product that has shown the most price strength is broiler wings, which averaged $1.40 per pound in May, up 50 per cent from the previous year. Traditionally, wing prices have peaked in late January or early February and then declined seasonally. This year, prices peaked as usual but have remained strong due to the smaller domestic production and a strong export market. Over the first 4 months of 2009, wing exports have totaled 100 million pounds, up 21 per cent from the previous year. The largest market for wing exports is China/Hong Kong, which accounted for 72 per cent of shipments during the first four months of 2009.

Strong Demand Pushes Exports Higher

During the first four months of 2009, US exports of broiler meat totaled 2.3 billion pounds, up 9.5 per cent from the same period in 2008. A large portion of the increase can be attributed to larger shipments to Mexico and China/Hong Kong. Exports to these countries were up by 39 per cent and 15 per cent. These increases offset a strong decline in exports to Russia, which were down 26 per cent over the first four months of 2009 compared with the previous year

The value of exports has not risen as fast, as the price of leg quarters has been below the previous year. In the January-to-April period, the value of broiler exports was $1.1 billion, five per cent higher than during the same period in 2008.

With broiler production expected to be down about two per cent in second-half 2009 compared with the previous year, upward price pressure on most broiler products is expected, especially if export demand remains high. How much broiler product prices are affected will depend on various factors, such as the extent of any rebound in the domestic economy, the extent of increases in both grain and energy prices, and the prices of competing beef and pork products.

Turkey Production Falls in April

Turkey meat production in April was 475 million pounds, down 8.5 per cent from a year earlier. Overall turkey meat production for second-quarter 2009 is expected to be 1.43 billion pounds, down 8.3 per cent from a year earlier. The number of turkeys slaughtered in April 2009 compared with a year earlier fell to 20.3 million birds (down 8.8 per cent), and their average liveweight at slaughter was 29.3 pounds, about even with the previous year.

Even with nine per cent lower turkey meat production expected in first-half 2009 compared with 2008, wholesale prices for most turkey products have remained considerably lower than a year earlier due to a large build-up in stocks combined with lower broiler prices. May prices for whole hen turkeys in the Eastern region were 79 cents per pound, a decline of 12 per cent from May 2008. Prices for whole birds have been averaging between eight to 12 per cent lower than a year earlier for the last three months.

Prices were also lower for most turkey meat products, but not for all. In May, the weekly average prices for fresh mechanically deboned meat (MDM) turkey meat ranged from 46 to 56 cents per pound, between 40 and 60 per cent higher than the price the previous year. This price strength is somewhat unusual, due to the fact that turkey product exports to Mexico, traditionally one of the larger importing countries of ground and MDM turkey products, have been down so far this year. One explanation is that in a weak US economy, the demand for MDM meat – a relatively inexpensive protein source – has risen.

January to April Turkey Exports Totaled 153 Million Pounds

With a large decline in shipments of turkey products to Mexico – the US's largest turkey export market – overall turkey meat exports from the United States totaled 153 million pounds in the first four months of 2009, a decrease of 25 per cent from the same period in 2008. Much of the decline was due to smaller exports to Mexico (down 15 per cent) but shipments to China, Canada and Russia have also dropped sharply. Turkey shipments to Mexico have been impacted by the relatively lower prices of broiler products, so there has been a trade-off between importing broilers and importing turkey. The value of turkey exports over the first four months of 2009 was $117 million, down 21 per cent from the previous year.

Egg Production Higher in April, Production Estimates Increased

During the January to April 2009 period, the number of hens in the US table egg flock was slightly higher than during the same period in 2008. In April, the flock was estimated at 282 million birds, up about one per cent from the previous year. Combined with a small increase in the rate of lay, the higher number of birds resulted in a 2.4 per cent increase in the number of table eggs produced in April to 534 million dozen. The higher April production has led to a small increase in the second quarter egg production estimate to 1.6 million dozen, up about 1.5 per cent from the previous year.

However, over the last four months, the number of egg-type chicks hatched has been consistently smaller than in the same month the previous year which – combined with low prices in most of May – has led to the estimates for the second and third quarters of 2009 being reduced slightly to 1.62 and 1.66 million dozen, respectively. Over the last several months (April through early June) wholesale egg prices have varied widely. Weekly egg prices in the New York market reached a high of around $1.30 per dozen just before the Easter holiday but then fell sharply to as low as around 72 cents per dozen. By the beginning of June, prices had strengthened somewhat, reaching just under $1.00 per dozen. The price estimate for second-quarter 2009 is 95 to 96 cents per dozen, with prices expected to strengthen only slightly in the third quarter. Prices are expected to strengthen seasonally in fourth-quarter 2009, but overall prices in 2009 are expected to have a double-digit percentage decline from the previous year.

Egg and Egg Product Exports Higher in April

Even with much lower wholesale prices for eggs in the United States, egg and egg product exports over the first four months of 2009 totaled only 59.4 million dozen, down 12 per cent from the same period in 2008. Basically, the only two bright spots in the egg and egg product export picture were Canada and Hong Kong; both had imports from the United States increase by double digit percentage amounts in the January to April 2009 period compared with the previous year. The largest export decline was to Japan, whose imports fell by 41 per cent as the worldwide economic weakness has severely affected Japan's economy.

Further Reading

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