July 19, 2011 – U.S. broiler meat production in third-quarter 2011 is expected to be below that of the previous year. The falling year-over-year production is expected to continue in fourth-quarter 2011, according to the USDA.
July 19, 2011 – U.S. broiler meat production for the first 5 months of 2011 was 15.5 billion pounds, up 4.8 percent from the same period in 2010. The increase in 2011 is the result of a greater number of birds being slaughtered and higher average weights at slaughter.
Due to the increased broiler meat production in May and the continuing higher average bird weights, the production estimate for second-quarter 2011 was raised to 9.4 billion pounds, 75 million higher than the previous estimate. However, starting in late May and continuing through the most recent data, the number of eggs placed in incubators and the number of chicks placed for growout has turned sharply lower than the previous year. Based on this trend, broiler meat production in third-quarter 2011 is expected to be below that of the previous year. The falling year-over-year production is expected to continue in fourth-quarter 2011, and the fourth-quarter production estimate was lowered to 9.3 billion pounds, down 75 million from the earlier estimate. Production for all of 2011 is estimated at 38.4 billion pounds.
The relatively higher grain prices and the sluggish economy are expected to influence broiler production through 2012. Production in 2012 was reduced by 230 million pounds to 37.8 billion pounds, up only 1.1 percent from the 2011 total.
Most of the reduction was attributed to changes in the second half of 2012, as the expected production increase in that period is now expected to be more modest than originally forecast.
At the beginning of June the number of birds in the broiler breeder flock was estimated at 54.8 million, down just less than one percent from a year earlier. If the size of the broiler breeder flock remains below the previous year over the next several months, the number of eggs placed in incubators and chicks hatched are expected to continue to be significantly lower compared with the previous year, and this will reduce the number of birds available for slaughter.
Two of the major factors driving the current changes in the broiler industry are the large increases in the prices of feed grains and little or no growth in the domestic economy. Higher grain prices have greatly increased the cost of growing out the birds to market size. With little or no growth in the economy, the overall demand for meat products has been down, and as a result prices for many broiler products are below those of a year earlier.
Over the last 5 weeks (June 11 to July 9), the average number of chicks being placed weekly for growout was 169.1 million, 3.4 percent lower than in the same period in 2010. This is a continuation in a downward trend in chick placements that began about 4 weeks earlier. A smaller numbers of chicks being placed for growth is expected to continue at least for several weeks, as the number of eggs placed in incubators in the last 3 weeks has averaged 4.8 percent lower than in the previous year. With a typical growout period of 7 to 8 weeks, chicks placed for growout during June would likely go to slaughter during the second half of July to the middle of August.
Broiler meat production in May 2010 totaled 3.2 billion pounds, 7.1 percent higher than the previous year. The increase in meat production was due to a combination of a higher number of birds slaughtered in May, up 5.0 percent from the previous year, and higher average weights at slaughter. The number to birds slaughtered was higher due to 1 additional slaughter day in May 2011 compared with May 2010.
The average liveweight at slaughter in May was 5.81 pounds, 1.8 percent higher than the previous year. Weekly broiler slaughter data from the Agricultural Marketing Service points toward continued higher average liveweights at slaughter in June, as most of the increase in the weekly number of birds being slaughtered during June has been from -heavier birds (6.25 pounds and higher).
Broiler meat production is expected to be up 2.2 percent in second-quarter 2011 compared with the previous year, with almost all of the growth coming from higher production of large birds. This production increase has generally had a depressing effect on wholesale prices. After rising in the first quarter of 2011, prices for whole birds averaged 82.6 cents per pound during second-quarter 2011, 2.8 percent lower than a year earlier, as stocks have increased and the economy remained weak.
Demand has also been weak for boneless/skinless breast meat, with prices in the Northeast market averaging $1.25 per pound in June, down 18 percent from the previous year. With generally lower stock levels, prices for a number of leg meat products and wings have been increasing. Prices for leg quarters and thigh meat in June were both up considerably (between 28 and 46 percent) from June 2010.
Broiler stocks at the end of May totaled 719 million pounds, up 8.3 percent from a year earlier. The year-over-year changes in cold storage stock levels varied widely for the different categories. Stocks of whole birds, and breast meat products were higher, while stocks of a number of leg meat products were lower. Stocks for whole birds were 21.8 million pounds, an increase of 14 percent from the previous year. Stocks of breast meat were up 36 percent from the previous year and totaled 157 million pounds. Over the first 5 months of 2011, stocks of breast meat rose by 21 million pounds, and this increase has been reflected in the falling wholesale price over the last several months. Cold storage holdings of broiler wings presents a more complex picture. At the end of May 2011, wing stocks totaled 66 million pounds, 72 percent higher than the previous year. However, since the beginning of 2011 wing stocks have declined by 1.9 million pounds, and wholesale prices for wings have generally been strengthening in the last month or two. Wing prices were around $0.88 per pound in June, down 24 percent from the previous year, but up 8 cents from the previous month.
Partially countering the increases for the products discussed above have been falling stocks for thighs and thigh meat, which were down 29 and 39 percent from the previous year. Most of the decrease for these products came during the first 2 months of the year, with stock levels basically unchanged in the last 2 months.
For the remainder of 2011, cold storage holdings for broiler products are expected to slowly decline. While broiler meat production on a year-over-year basis is expected to be lower in the second half of 2011, the decline is expected to be partially offset by lower exports and a sluggish domestic economy. Broiler stocks are expected to slowly fall, ending the year at 630 million pounds.
Broiler Exports Higher in May
Broiler exports totaled 566 million pounds, 5.7 percent higher than a year earlier and almost 14 percent higher than in April. The export strength was likely a significant factor in the strengthening of leg quarter prices in the Northeast market, which averaged 49.6 cents per pound in May, up over 11 cents per pound from the previous year and 3 cents per pound higher than the previous month.
Much of the increase in exports from the previous year is attributable to a handful of countries. In May 2011, exports to Latvia were 32.5 million pounds compared with zero exports in May of 2010. Exports of broiler products were also much higher to Russia, South Korea, and the United Arab Emirates, due to trade restrictions in the previous year, shortfalls in domestic meat production, or large buyers taking advantage of the weakness of the U.S. dollar against the currency of major competitors.
Turkey Production Rises in May
Turkey meat production totaled 496 million pounds in May 2011, up 13.1 percent from a year earlier. Over the first 5 months of 2011, turkey meat production has totaled 2.4 billion pounds, 5.4 percent above the same period in 2010. The increase in turkey meat production in May was the result of both a higher number of turkeys slaughtered – 20.6 million, up 11.5 percent from a year earlier – and a higher average weight. Much of the gain in the number of turkeys slaughtered was the result of 1 additional slaughter day in May 2011 compared with a year earlier. In May, the average liveweight for turkeys at slaughter was 30.2 pounds, 1.6 percent higher than a year earlier. Over the first 5 months of 2011, the average liveweight for turkeys at slaughter has been 30.3 pounds, up 1.1 percent from the same period in 2010.
Although turkey meat production in the second half of 2011 is expected to be higher, estimated at 2.9 billion pounds, it will still be down slightly (1 percent) compared with the second half of 2010. The turkey hatchery report showed that net placement of poults for growout in May were 23.7 million birds, 1.6 percent lower than the previous year; however, over the first 5 months of 2011 net poult placements have totaled 115.5 million, up just less that 1 percent from the same period in 2010. Turkey meat production is expected to remain about the same or just below the previous year through the rest of 2011, but to turn to positive growth in the second half of 2012. Even when it turns positive, however production will be below that of the second half of both 2007 and 2008.
Even with higher turkey production so far in 2011, lower stocks of whole birds to start the year have kept available supplies tight and whole bird prices have remained well above year-earlier levels. National prices for whole hen turkeys averaged 99.9 cents per pound in second-quarter 2011, up over 15 cents per pound from the previous year. Whole turkey prices are expected to remain above year-earlier levels through the remainder of 2011 and into 2012.
At the end of May, cold storage holdings of all turkey products totaled 444 million pounds, down 3.9 percent from a year earlier. The decrease has come from declines in both the stocks of whole birds and the stocks of turkey parts. Cold storage holdings of whole turkeys totaled 234 million pounds, 6 percent lower than a year earlier. Holdings of turkey parts were 210 million pounds at the end of May, down only 1.2 percent from the same period in 2010. The decline in turkey products in cold storage has developed because the strong increase in production has been mostly offset by strong export demand, especially to Mexico. Stocks of turkey products (whole birds and parts) are expected to follow the normal seasonal pattern of increasing through the third quarter and then declining during the peak demand period in the fourth quarter. With slightly lower production expected for the second half of 2011, ending turkey stocks for 2011 are forecast at 200 million pounds, just slightly higher than 2010’s very low level.
Turkey Exports Continue Their Strong Pace
In May, turkey exports totaled 64.6 million pounds, up 37 percent from a year earlier. This lifts total turkey exports over the first 5 months of 2011 to 277.2 million pounds, 36 percent higher than during the same period in 2010. Much of the growth in exports has come from shipments to Mexico, the largest market for U.S. turkey products. Exports to Mexico in May totaled 37.8 million pounds, or 58 percent of all turkey exports. Also boosting total turkey exports were larger shipments to China, which were up 34 percent compared with May 2010. During the first 5 months of 2011, shipments to China were more than double those for the same period in 2010.
Egg Production Slightly Higher, Prices Strong in Second Quarter
U.S. table egg production totaled 556 million dozen in May, up 1 percent from the same period the previous year. Higher table egg production in May was the result of an increase in the rate of lay in May compared with the previous year, as the number of hens in the table egg laying flock was actually slightly lower than in May 2010. During May the number of hens in the table egg laying flock averaged 280 million, down fractionally from a year earlier. It is expected that the number of birds in the table egg laying flock will continue to be slightly lower than the previous year. Although wholesale prices are relatively strong, much higher feed prices have negated incentives to expand the size of the table egg flock. As a result, the number of egg-type eggs in incubators at the first of the months has been lower for the last 3 months in a row. Table egg production in second-half 2011 is expected to total 3.3 billion dozen, slightly higher than in the second half of 2010. Much of the increase in second-quarter table egg prices is due to the Easter holiday having fallen late in April. However, egg prices normally fall sharply after Easter, and this year the decline was less severe and shorter in duration. After averaging $1.20 per dozen in April, prices fell to $0.99 in May, but then increased in June to push the second-quarter average to $1.07 per dozen in the New York market, up 29 percent from the same period the previous year.
With a slightly lower table egg flock, egg prices are expected to remain above the previous year through the third quarter. However, egg prices are expected to average $1.09- $1.17 per dozen in fourth-quarter 2011, down somewhat from the $1.23 per dozen in fourth-quarter 2010, as a sluggish economy is expected to have a depressing effect on the normal fourth-quarter strengthening in egg prices.
Overall Egg Exports Rise
Total egg exports (shell eggs and egg products) were 26.3 million pounds in May 2011, up 13 percent from the previous year. Much of the increase was due to larger shipments to Japan, Canada, and South Korea. Japan and Canada have traditionally been major markets for U.S. shell eggs and egg products. Exports to Japan in May totaled 6.3 million pounds, 55 percent higher than the previous year. Monthly shipments to Japan have steadily been growing during 2011 and over the first 5 months are 39 percent above the same period in 2010. Egg exports to South Korea were only 1.3 million pounds in May, but this is a large jump from the previous year when shipments to South Korea totaled only 324,000 pounds.
For the full report go to: www.ers.usda.gov
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