CME: Significant Growth in Broiler Output

US - Trading hours for Livestock Futures and Options on the CME Globex trading platform change on Monday!
calendar icon 27 October 2014
clock icon 4 minute read

Instead of halting for one hour at 4:00 pm Central Time (CT) and the opening for the following day at 5:00 pm

CT, Globex trading in livestock futures and options will, beginning on Monday, close at 4:00 pm CT and remain closed until 8:00 am the next day. Globex trading will still close at 1:55 pm on Fridays and will still resume trading at 9:05 am on Mondays.

This change applies to only the electronic platform, not the pits. It appears that the broiler industry is finally finding its mojo or at least something that works in reversing the productivity challenges of the past year.

According to USDA’s monthly Chicken and Eggs report, the broiler layer flock is now growing steadily and, more important, is producing more eggs both on a unit and relative basis. The result will be significant growth in broiler output. We are seeing some of that growth already but will see it in spades next year.

Some key recent numbers for the broiler market present and future are:

  • There were 52.78 million hens in the broiler breeder flock as of 1 October, 2 per cent more than one year ago. October marks the fourth straight month of 2 per centor greater year on year growth after three months of very low growth levels. The flock is still much smaller than at its February 2008 peak of 58.768 million birds but it is 7.5 per cent larger than in November 2012 when it bottomed out at 49.106 million.

  • Broiler egg output grew by 2.5 per cent versus one year ago in September to 991 million. That is the largest year on year increase for monthly broiler egg production since November of last year. That total output figure pushed egg production per breeding layer to its highest level in just over a year. The 62.6 eggs per hen in inventory on 1 October was higher than the year ago level for the first time this year and represents the fourth highest such number on record. It appears that the productivity challenges are indeed being met!

  • The steady increase in the breeder flock and its productivity is already showing up in weekly egg set and placement data. Last week’s 195.0 million eggs placed in incubators was 3.8 per centlarger than last year and follows weeks of +4.8 per centand +4.0 per centfor this figure. Egg sets were up only 1 per cent year to date as recently as the end of August. The year on year increase has averaged 3.4 per cent since then. Year do date placements of chicks into growing barns was actually lower than one year ago as of the week of 19 September but has exceeded year ago levels, on average, by 2.6 per cent since then.

And there is good reason for the growth! The current situation poses great opportunities from both profit and competitive viewpoints. Broiler break even costs are roughly 25 per cent lower than at their peak in 2013 while wholesale chicken prices are generally at or above those same levels. In addition, beef and pork prices are record high relative to chicken.

We believe the same is true of turkey part prices but have only a whole turkey retail price from USDA which, as can be seen, is still quite competitive.

Further Reading

You can view the full report by clicking here.

Charlotte Rowney

© 2000 - 2024 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.