US Poultry Outlook Report - October 2005 - By U.S.D.A., Economic Research Service - This article is an extract from the October 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.

Poultry

The third and fourth quarters 2005 U.S. broiler production estimates were reduced due to a slowdown in the growth of chick placements over the last several months. Also impacting broiler production has been relatively small increases in average weights at slaughter. The smaller production, along with strong exports, is expected to keep wholesale prices at or near current levels through the remainder of 2005.

Broiler Production Forecasts Decreased

The forecast for third-quarter 2005 U.S. broiler production was reduced by 150 million pounds to 8.95 billion pounds, and the fourth quarter 2005 production estimate was reduced by 50 million pounds to 8.75 billion pounds. Over the last several months, the number of broiler-type chicks being placed for growout has been only slightly higher than the previous year. From July 2 to September 24, a period of 13 weeks, the number of broiler-type chicks being placed each week for growout averaged 174 million. This is 0.5 percent below the average number of birds being placed for growout compared with the same period the previous year. The reduction in the number of birds being placed for growout and the relatively small gain in average weights at slaughter are the chief reasons behind lower broiler production estimates for third- and fourth-quarter 2005.

The smaller reduction in the fourth quarter production estimate is due to the upturn in the number of birds being placed in incubators over the last 5 weeks, (September 3 to October 1). During this period, the number of eggs placed in incubators has averaged 2.5 percent higher than the previous year. This upturn in the number of eggs being placed in incubators is expected to result in higher numbers of broilers going to slaughter by the end of the fourth quarter.

Broiler slaughter in August was 3.1 billion pounds, up 4 percent from a year earlier. The increase in broiler slaughter was boosted by one additional slaughter day in August 2005 compared with the previous year. An extra slaughter day normally results in about a 5-percent boost in monthly slaughter, other things equal. The increase in broiler production in August resulted from a 2.9-percent increase in the number of broilers slaughtered and a nearly 0.4 percent increase in their average liveweight.

Broiler Prices Higher for Leg Meat

The combination of slower growth in overall broiler production and a strong export market has placed upward pressure on prices of most broiler parts made from leg meat. In the Northeast market in September, bulk leg-quarter prices averaged 47.4 cents per pound, up 49 percent from the previous year. This large increase in legquarter prices has also pushed up other leg meat products. Drumsticks averaged 59.4 cents per pound, up 57 percent from 2004, while prices for boneless/skinless thighs and whole thighs were up 81 and 70 percent from a year ago. With exports expected to remain strong through the remainder of the year, leg meat prices are forecast to remain well above their year-earlier levels.

Turkey Prices Higher

With turkey meat production in 2005 forecast to be only slightly higher than the previous year and exports expected to show double-digit growth, strong prices for most turkey products are expected through the remainder of 2005. The three-region price for whole hens and toms averaged nearly 80 cents a pound in September, up 7 percent from September 2004. Weekly prices for turkey parts during September were also higher. Turkey breast prices averaged around $1.10 per pound compared with about 97 cents per pound a year earlier, an increase of around 13 percent. Prices for boneless/skinless breast rose even more, with prices in September 2005 20 to 30 percent higher than a year earlier.

Turkey Production 4 Percent Higher in August

U.S. turkey meat production totaled 488 million pounds in August 2005, up 4 percent from the previous year. The number of birds slaughtered was up 2.5 percent while the average weight of birds was 1.1 percent higher than the previous year. This small increase in average weight is a major departure from the weight gains posted earlier in the year. From January to July, the average weight for all turkeys at slaughter had been 4.8 percent higher than in the same period in 2004. This large increase in average weight had partially offset the decline in the number of birds being slaughtered and masked the fact that the number of poults being placed for growout had been falling for some time.

Broiler Exports Up in Third Quarter

Third-quarter 2005 broiler exports for August are almost 28 percent higher than August of 2004. The primary reason for the increase is continued growth in shipments to Russia, the Baltic States, Mexico, and Canada. Over the past month, Russia’s broiler imports from the United States have increased by over 45 million pounds, a 28-percent increase from July. During this same period, the Baltic States (Estonia, Latvia, and Lithuania), Mexico, and Canada increased their imports of U.S. broilers by over 14, 7 and 2 million pounds, respectively. Currently, thirdquarter 2005 broiler exports are doing well, showing a 12-percent increase from June to July, and a 22-percent increase from July to August. Broiler exports are on track to meet the third-quarter forecast.

August Turkey Exports Remain on Track After July Slow Start

Turkey exports totaled 50.8 million pounds in August, up 9 percent from August 2004. Although the year-over-year has increased, total turkey exports for the thirdquarter from month-to-month have varied. Turkey exports from June to July 2005 declined by 9 percent, while exports from July to August increased by 13 percent.

The chief cause of this slowdown has been reduced imports by China and Hong Kong. In July, shipments to China, Hong Kong, and other importing countries were reduced by almost 1 million pounds, 500,000 pounds, and 2.3 million pounds, respectively. However, in August, China, Hong Kong and Other importing countries’ shipments increased from July’s quantities by 884,000, 526,000 and 666,000 pounds, respectively. As turkey producers gear-up for the holiday season, U.S. turkey exports are expected to continue to increase throughout the third quarter and into the fourth quarter.

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For more information view the full Livestock, Dairy and Poultry Outlook - October 2005 (pdf)

Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - October 2005