U.S. Poultry Outlook
By Kristy Nudds
In their latest report (December 2008) the USDA Economic Research Service predicted that broiler meat production would fall 1.5 per cent
U.S. Poultry Outlook
In their latest report (December 2008) the USDA Economic Research Service predicted that broiler meat production would fall 1.5 per cent in the fourth quarter of 2008 to 9.15 billion pounds. This is a decrease of 50 million pounds from their previous forecast.
This follows strong increases in production during the first three quarters of 2008. The lower production in fourth-quarter 2008 and into 2009 is expected to be driven by a smaller number of birds slaughtered, as average live weights are expected to be slightly higher.
Lower meat production is expected to continue into 2009, as lower prices for most broiler products are not expected to provide incentives for integrators to expand production.
With the strong broiler meat production in third-quarter 2008, ending cold storage holdings of broiler products totaled 729 million pounds, up 16 per cent from the previous year, but down over 10 million pounds from the previous quarter. This is also 16 million pounds lower than the earlier estimate.
Most of the increase in cold storage holdings over the previous year is the result of larger stocks of leg meat products. At the end of the third quarter, leg quarter holdings totaled 111 million pounds, up about 85 per cent from the previous year. With lower production forecast for 2009, overall stocks of broiler products are expected to be smaller in 2009.
Cold storage holdings of whole broilers at the end of third-quarter 2008 were 25.3 million pounds, up 26 per cent from the previous year. This increase has not led to lower prices, as whole-bird prices in third-quarter 2008 were about 81 cents per pound, up slightly from the same period in 2007.
Prices for most poultry products have been under pressure over the last several months, and with the rising uncertainty in the economic outlook and export markets, these prices have fallen even farther. Boneless/skinless breast meat prices in the Northeast market fell to $1.09 per pound in October, down more than 41 cents per pound from the peak for 2008 in May.
The worldwide economic decline, increase in the value of the U.S. dollar against a number of currencies, and uncertainty about the future size of various exports markets have combined to place downward pressure on leg-quarter prices, the major export product. The lowering of leg-quarter prices has depressed the prices of other leg-meat products.
Turkey Production Rises
U.S. turkey production in third-quarter 2008 was 1.57 billion pounds, up 5.6 per cent from a year earlier. The production increase was the result of a higher number of birds slaughtered (up 3.2 per cent) and an increase in the average live weight at slaughter to 28.4 pounds. Turkey meat production in fourth-quarter 2008 is forecast at 1.59 billion pounds, again higher than during the same period in 2007, and an increase of 15 million pounds over the previous forecast. Turkey production in 2009 is forecast at 6.1 billion pounds, a decline of about 160 million pounds or 2.6 per cent from 2008.
Egg Production Continues Lower
Table egg production in third-quarter 2008 was 1.6 billion dozen, fractionally lower than a year earlier. On a year-over-year basis, table egg production has fallen in each of the last seven quarters. Table egg production is forecast to again be slightly lower than the previous year in fourth-quarter 2008, but the production forecast for 2009 is slightly higher than in 2008. Hatching egg production in third-quarter 2007 was 273 million-dozen, down about eight million-dozen from third-quarter 2007. Hatching egg production is expected to be lower in the fourth quarter compared with a year earlier, chiefly due to a smaller production of broiler chicks, and production is expected to continue lower than the previous year through the first half of 2009.
Wholesale egg prices in the New York market averaged $1.14 per dozen in the third quarter, down about five cents from the previous year. In October, wholesale egg prices strengthened somewhat, with prices in the New York market averaging around $1.20 per dozen. Nationally, retail prices in the third quarter were up considerably from the previous year, averaging $1.95 per dozen in third-quarter 2008, an increase of 30 cents per dozen from a year earlier.
Wholesale egg prices in fourth-quarter 2008 are forecast to average between $1.18 and $1.22 per dozen, up slightly from the third quarter, but about 20 cents per dozen lower than the previous year. Prices in 2009 are forecast to be down slightly from 2008, with most of the decline due to lower prices in first-quarter 2009.
For more information: http://www.ers.usda.gov/publications/ldp/