Poultry Sector Returns to Profits

US - Chicken producers returned to profitability in 2009 by quickly dropping production in both 2008 and 2009, writes Chris Hurt.
calendar icon 15 October 2010
clock icon 3 minute read

This year, broiler prices will average about 83 cents per pound compared to only 77 cents last year. This price increase was achieved even with a 3 per cent increase in production primarily due to the US economy moving out of recession. Trade conflicts with Russia have helped keep chicken exports down this year about 6 per cent.

For 2011, chicken production is expected to increase by 3 per cent again. However, continued economic recovery and a 3 per cent increase in exports should enable chicken prices to increase to average near 85 cents per pound. These chicken prices should be profitable if corn prices do not rise above $4.50 per bushel.

Turkey producers followed a different path in 2008 when they expanded production by 2 per cent even in the face of higher feed prices. Financial losses from higher feed prices and the recession resulted in reductions of about 4 per cent in 2009 production followed by another 4 per cent in 2010. As a result of lower production and recovering consumer demand, turkey prices will average about 89 cents per pound this year compared to only 79 cents last year. For 2011, expect production to be up 2 per cent with prices dropping to around 86 cents on average.

Price per dozen for New York eggs was $1.28 in 2008. The recession in 2009 lowered them to $1.03. Prices in 2010 will average about $1.00 per dozen as production increase fractionally. For next year, USDA expects prices to average in a range from $1.03 to $1.12 per dozen.

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