Chicken Production 'Picks Up Steam'

US - Broiler egg sets were up by 4.6 per cent for the week ending August, the most recent Broiler Hatchery report states.
calendar icon 18 September 2013
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This is the third week in a row that sets have been up over 4.5 per cent and illustrates how integrators have held 'nearly' a steady pace through the summer, says John D Anderson, Deputy Chief Economist at the American Farm Bureau Federation.

"While beef production continues to decline, chicken production is really beginning to pick up steam," said Mr Anderson. "Not surprisingly, chick placements are also on the rise."

Placements are up slightly. One per cent higher for the third full week of August and 2.2 per cent higher for the past month, year on year making egg and chick placements for the week ending August 24 the highest since 2010.

Mr Anderson said that in 2010 the industry was attempting an 'aggressive expansion' and that it is not hard to see why integrators became interested in expansion this summer because of high broiler prices.

Unlike the 2010 expansion, Mr Anderson predicts things to turn out better, due to indicators being more favourable this time around.

"The economy may not be firing on all cylinders, but things have certainly improved since 2010," added Mr Anderson. "Similarly, exports have recovered steadily, if not dramatically, over the past three years. Still, expansion does entail some risk for the industry."

"Already, wholesale chicken prices have slipped for the past several weeks. The national broiler composite ended August at its lowest level of the year. At just over $0.90 per pound, it is still substantially above year-ago levels (by about 10 per cent) but far below the highs of earlier this year.

"If prices decline further, it will be interesting to see what happens with weekly egg sets and chick placements - particularly if this is also accompanied by higher corn prices due to the late-season heat in much of the Corn Belt. For now, though, the expansion is on for broilers."

Michael Priestley

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