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Poultry Outlook Report - July 2003

by 5m Editor
28 July 2003, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the July 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. This report indicates that broiler production forecasts now indicate a fractional year-over-year increase as heavier weights more than offset the continuing decline in chicks placed.

Poultry Outlook Report - July 2003 - By U.S.D.A., Economic Research Service - This article is an extract from the July 2003: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. This report indicates that broiler production forecasts now indicate a fractional year-over-year increase as heavier weights more than offset the continuing decline in chicks placed.
Overview

Total U.S. meat production is expected to decline slightly (less than 1 percent) in both 2003 and 2004. Broiler production forecasts for 2003 now indicate a fractional year-over-year increase as heavier weights more than offset the continuing decline in chicks placed.

Meat imports are running below previous expectations reflecting the ban on Canadian beef since May 20. However, the reduction in beef imports from Canada is being partially offset by higher pork imports. Meat exports are also running below previous expectations due to reduced beef and poultry sales to Mexico and weaker poultry sales to Asia.

Broiler Meat Production Down 4.4 Percent In May, but Estimate for the Second Quarter Revised Upward

While U.S. broiler meat production was down slightly in the first quarter of 2003, the revised estimate for the second quarter is now 8.8 billion pounds (up 125 million) and slightly higher than in the same period a year earlier. The estimate for third-quarter production has also been increased to 8.8 billion pounds. These adjustments push the estimate for 2003 to 32.42 billion pounds, an increase of 0.6 percent from the previous year.

Broiler meat production in May was down 4.4 percent from a year earlier. The May production decrease was the result of a 4.8- percent decrease in the number of birds being slaughtered, partially counterbalanced by a 1-percent increase in the average liveweight of the birds going to slaughter.

Most of the decrease in the number of birds going to slaughter can be attributed to the fact that May 2003 had one less working day than May 2002. This will be reversed the next month, with June 2003 having one additional working day compared with the same month the previous year.

Preliminary data point towards a significant increase in the number of birds slaughtered in June combined with a 1- to 2-percent increase in their average weights.

Even with second-quarter production now estimated to be slightly higher than in the previous year, wholesale prices for a number of broiler products continued to rise in June.

Over the first 6 months of 2003, wholesale prices for boneless/skinless breast meat have averaged $1.49 per pound, up 14 percent from the same period in 2002.

Prices for whole birds have also increased, with prices averaging 7 percent higher than in the first half of 2002. Leg quarter prices, which more greatly reflect strength in the export markets, have lagged. Over the first 6 months of 2003, leg quarter prices have averaged 21.8 cents per pound, down a little over 1 percent from the previous year. However, over the last 2 months, leg quarter prices have really begun to swing upward. In June, leg quarter prices in the Northeast region were 25.1 cents per pound, up 1.2 cents from the previous month and 4.1 cents (20 percent) higher than in April.

With broiler production now forecast to be slightly higher in the third quarter than the previous year, price increases are expected to slow. However, prices, especially for export-sensitive parts, are expected to remain above their year-earlier levels.

Broiler exports in May were 386 million pounds, down 10 percent from the previous year and considerably lower than average shipments over the last several years.

In response to low shipments in May, the export estimate for the second quarter was lowered by 75 million pounds to 1.13 billion pounds. However, prices for a number of parts that are heavily exported have increased over the last 6 to 8 weeks, indicating a strengthening in export demand.

Exports are expected to be higher in the third quarter of 2003 than the previous year. This is due to a combination of strengthening broiler exports and the low level of exports to Russia during the third quarter of 2002.

Over the first 5 months of 2003, broiler shipments have totaled 1.9 billion pounds, slightly lower than in the same period in 2002 (down 3.1 percent). This is considerably better than shipments of other poultry products, such as turkey (down 16 percent) and eggs (down 9 percent). However all the growth in broiler shipments over the first 5 months of 2003 have come from countries that have traditionally been smaller markets. Shipments to Russia were down 7 percent and shipments to Hong Kong, Mexico, and Korea were all at least 25 percent lower than the previous year.

Egg Prices Continue To Rise

During the first 6 months of 2003, wholesale table egg prices (NY grade A large) averaged 75.6 cents per dozen, 18 percent higher than the same period in 2002. Retail egg prices were about 14 percent higher during the same period.

For all of 2003, wholesale egg prices are expected to be 12-14 percent higher than 2002, and retail prices will also continue its 3-year upward movement. During the first 6 months in 2003, egg consumption was down about an egg from a year earlier.

Per capita egg consumption in 2003 is expected to decrease slightly to 252 eggs, about 2 eggs less per person than the previous year. Due to the higher egg prices, the quantity of eggs going to the breaking market decreased by 3.8 percent during the first 6-months in 2003, compared with the same period in 2002. For all of 2003, Federally inspected eggs broken are expected to be about 2 percent less than in 2002.

Links

For more information view the full Livestock, Dairy and Poultry Situation and Outlook - July 2003 (pdf)

Source: Livestock, Dairy and Poultry Situation and Outlook - U.S. Department of Agriculture, Economic Research Service - July, 2003