CME: 2016 Started with Strong Consumer Demand for Chicken

US - Chicken production so far in 2016 has been slightly more than expected, based solely on birds being heavier at the time of final processing, write Steve Meyer and Len Steiner.
calendar icon 19 February 2016
clock icon 3 minute read

Weekly slaughter has been close to a year ago and close to forecasts driven by hatchery output in late 2015.

The winter storm that throttled the eastern half of the US in late January delayed some production, pushing some production into early February.

Average bird weights started out the year lighter than a year earlier, similar to the last quarter of 2015. Since the first week of the year, however, birds have been heavier.

In some weeks the additional weight is as much as 2 per cent more than the same week in 2015.

The uptick in bird weights during the first week in February probably relates to slaughter dates that were delayed by the winter storm of the previous week.

The trend in bird weights during the last four weeks along with slaughter that looks to run close to a year ago for the current quarter suggests that chicken production will be up 2 per cent from a year ago for the quarter.

This was slightly more than expected at the beginning of the year. Bird weights were expected not get heavier this year, compared to 2015.

Consumer demand for chicken has started 2016 on favourable footing. Wholesale prices for breasts, leg parts and wings have all moved higher, even with the surprising production boost.

Demand for wings always swings up for the Super Bowl, and this year was no exception. Prices normally tend to decline in the weeks that follow.

The additional meat production coming from heavier birds may begin to exert some downward pressure on leg parts prices in coming weeks.

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