Summary

Broiler meat production is expected to total 9.13 billion pounds in secondquarter 2010, up 2 per cent from a year earlier. Stocks are down from the previous year and exports have proven to be stronger than expected. Prices for broiler products are expected to be impacted by both upward movements in beef and pork prices and any changes in the general economic outlook. Turkey meat production is expected to decline again in 2010, but then is expected to grow slightly in 2011. However, even with this increase, turkey meat production in 2011 is expected to be down 10 per cent from its peak in 2008.

Broiler Meat Production Rises 1.1 Per Cent in April

Total broiler meat production in April 2010 was 3.0 billion pounds, an increase of 1.1 per cent from the previous year. Broiler meat production has been higher, on a year-over-year basis, in 3 of the 4 months so far in 2010. Processors reported slaughtering 713 million broilers in April 2010, a decrease of 1.2 per cent from the previous year. Offsetting this was an increase in the average liveweight of those broilers at slaughter to 5.68 pounds, up almost 2 per cent from a year earlier. In addition to the increase in the average liveweight, there was an increase in the average meat yield per bird of less than 1 per cent compared with April 2009.

The numbers of broiler chicks being placed for growout continues to be up by around 2 per cent from the previous year. Over the last 5 weeks (8 May to 5 June 2010), the average number of chicks placed per week was 172 million, up 1.4 per cent from the same period in 2009. This level of chick placements, combined with continued growth in the number of eggs placed in incubators, is expected to translate into a slightly higher growth rate for broiler meat production in thirdquarter 2010. The meat production forecast for second-quarter 2010 is 9.125 billion pounds, up 2.1 per cent from second-quarter 2009. Third-quarter production is forecast to total 9.4 billion pounds, an increase of 2.5 per cent from the previous year.

Broiler stocks as of the end of April 2010 totaled 602 million pounds, down 6 per cent from the previous year. However, changes in stock levels varied widely by product types. Stocks of breast meat products were generally lower, while stocks of leg meat and thigh products were generally higher. The largest change was a 15- per cent drop in the amount of broiler meat included in the “other” category. In April 2010, the “other” category accounted for 49 per cent of the total amount of broiler meat in cold storage. Ending stocks for first-quarter 2010 were revised downward slightly to 596 million pounds, down 4 per cent from a year earlier. With stronger than expected exports in first-quarter 2010 and only relatively small gains in production so far in 2010, the ending stocks forecast for 2010 was lowered by 20 million pounds to 670 million pounds.

Over the last several months, prices for a number of broiler products have been moving in opposite directions, with prices strengthening for some products and weakening for others. Prices in May for whole broilers were 86.4 cents per pound, up just over 3 cents per pound from the previous year. Prices of boneless/skinless breast meat were also higher. However, prices for a number of other broiler parts were lower than a year earlier. Prices for leg quarters averaged 38.2 cents per pound in May, down about 9 cents per pound from May 2009. Boneless/skinless thigh meat product prices in May also were lower than the previous year, falling 23 per cent to 94.4 cents per pound.

Broiler Exports Down Slightly in April

During the first 4 months of 2010, US exports of broiler meat totaled more than 2 billion pounds, down 12 per cent from the same period in 2009. However, over the last 2 months shipments have averaged 552 million pounds, down only 2 per cent from the same period in 2009.

Due to ongoing trade issues, broiler exports to Russia in April were zero and exports to China were only a fraction of the amounts shipped a year earlier. Due to the ability of the US industry to export relatively large quantities of broiler products to other markets, the export forecast for the second quarter was increased by 50 million to 1.425 billion pounds.

Moderately higher broiler meat production in second-half 2010 compared with the previous year, combined with a slowly improving economy, could place some upward price pressure on broiler products. However, this will be the case only if export demand remains high. The extent of pressure on broiler product prices will depend on various factors, including the extent of increases in competing beef and pork prices and forecasts for feed costs.

Turkey Production Falls in April

Turkey meat production in April was 455 million pounds, down 4.2 per cent from a year earlier. Turkey meat production has been below a year earlier in 15 of the last 16 months. The number of turkeys slaughtered in April 2010 fell to 19.2 million birds, down 5.6 per cent from a year earlier, and their average liveweight at slaughter rose just over 1 per cent to 29.7 pounds. Overall turkey meat production for second-quarter 2010 is expected to be 1.375 billion pounds, down about 3 per cent from a year earlier.

With lower year-over-year turkey meat production for the last 5 consecutive quarters, there has been increasing price support for many turkey products. Wholesale prices for whole turkeys have been around 8 to 9 per cent higher than the previous year. In May, the national price for whole hen turkeys was 82.5 cents per pound, an increase of 9 per cent from May 2009. The upward price pressure is also a reflection of lower cold storage holdings. At the end of April, cold storage holdings of whole hen turkeys were reported at 98 million pounds, down 25 per cent from a year earlier.

In May, the weekly average price for breast meat was approximately $1.19 per pound, up from about $1.08 per pound in May 2009. Thigh meat was also considerably higher;. the May average for weekly prices was around $1.20 per pound, compared with $0.87 per pound a year earlier (up 38 per cent). However, May prices for fresh MDM (Mechanically Deboned Meat) turkey meat averaged about $0.40 cents per pound, around 27 per cent lower than the previous year. One explanation for the decline in MDM prices is that a major market for this product is Mexico, and turkey exports to Mexico were down during the first 2 months of 2010 due to strong competition from broiler exports.

January to April Turkey Exports Totaled 157 Million Pounds

After being considerably lower than the previous year during the first 2 months of 2010, turkey meat exports strengthened in March and April, and over the first 4 months of 2010 they were 2 per cent higher than during the same period in 2009. The turnaround can be chiefly attributed to the strengthening of exports to Mexico. In April, shipments to Mexico totaled 25.1 million pounds, up 39 per cent from the previous year, and year-to-date exports are up 2 per cent from the same period in 2009. Along with the increased shipments to Mexico there has been a sharp jump in exports to Hong Kong.

Turkey meat exports to Hong Kong in the first 4 months of 2010 have totaled 7.4 million pounds, up 92 per cent from the previous year. This increase has more than offset a decline of 6 per cent in shipments to China. The value of turkey exports over the first 4 months of 2009 was $127.1 million, up 8 per cent from the previous year, reflecting generally higher domestic prices.

Egg Production Higher in April, Production Estimates Increased

During the January to April 2010 period, the number of hens in the US table egg flock averaged slightly lower than during the same period in 2009. In April, the flock was estimated at 281 million birds, down less than 1 per cent from the previous year. However, that decrease in the size of the flock was more than offset by an increase in the rate of lay for table egg birds. The higher rate of lay resulted in an 0.8 per cent increase in the number of table eggs produced in April to 539 million dozen. While the production estimate for the second quarter remained unchanged at 1.61 billion dozen, the production estimates for the third and fourth quarters were increased slightly. These estimates are now 1.63 billion dozen and 1.67 billion dozen.

Over the last several months (April through early June), wholesale egg prices have varied widely. Prices in the New York market were $0.92 per dozen in April, having fallen sharply after the Easter holiday. Weekly prices in May point toward an average price of around $0.80 per dozen and at the beginning of June, prices were around $0.90 per dozen. The price estimate for second-quarter 2010 is $0.88- $0.89 cents per dozen, with prices expected to strengthen only slightly in the third quarter, but then to strengthen seasonally to average $1.08-$1.16 in fourthquarter 2010.

Egg and Egg Product Exports Continue at High Level in April

Lower wholesale prices for eggs in the United States helped push egg and egg product exports in April to 20.4 million dozen, up 25 per cent from a year earlier. Over the first 4 months of 2010, egg exports have been especially strong, totaling 77.6 million dozen, up 31 per cent from the same period in 2009. While shipments have been higher to a wide variety of countries, the largest gains have been to Mexico, Japan, and European Union counties. The increase in shipments to Japan marked a return to more historical levels after a slowing economy in Japan resulted in a 26-per cent drop in egg and egg product shipments from the United States in 2009 compared with the previous year.

Total exports of eggs and egg products are forecast at 60 million dozen in secondquarter 2010 after reaching 57.2 million in the first quarter. While the volume of exports has risen by 31 per cent over the first 4 months of 2010, the value of shipments has risen only 14 per cent, chiefly due to falling prices in April.

Further Reading

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June 2010