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US Poultry Outlook Report - August 2006

by 5m Editor
20 August 2006, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the August 2006: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.

USDA Economic Research Service

Broiler Production Increases by 3 Percent

Broiler meat production during the first half of 2006 was about 18.1 billion pounds, up 3.1 percent from the same period in 2005. Over the first half of 2006, the number of broilers slaughtered was 4.4 billion, up just less than 1 percent from a year earlier. The average broiler live weight at slaughter during the first 6 months of 2006 was 5.46 pounds, up 2.2 percent from last year. Production during the second quarter of 2006 was 9.1 billion pounds, 2.2 percent higher than last year. The increase in broiler meat production in the second quarter came from a combination of a slightly lower number of birds going to slaughter and an increase in their average live weight.

Broiler meat production is expected to total nearly 18 billion pounds during the second half of 2006, up less than 1 percent from a year earlier. The growth in production is expected to come from higher average live weights as the number of birds being placed for growout has been lower than the previous year for some time now. If economic conditions remain favorable, by the end of the year gradually strengthening prices for a number of broiler products are expected to provide some incentive for producers to expand production. Much of the incentive to expand production will depend on the changes in feed costs.

The number of chicks being placed weekly for growout has averaged approximately 173.4 million over the last 5 weeks (July 8 to August 5). This is down 1.2 percent from the same weekly period in 2005. Over the last 3 months, weekly chick placements have been below the previous year, pushing down production forecasts in the second and third quarters.

Broiler Exports Slightly Higher in 2006

Over the first 6 months of 2006, broiler exports totaled 2.64 billion pounds, up 3.3 percent from a year earlier. One of the most important reasons for the increase in exports was the very low prices for broiler products, especially in the first several months of this year. While total broiler exports have risen in the first half of 2006, shipments in the second quarter were down 54 million pounds from the previous year. Also with lower prices, the total value of exports in first-half 2006 was $844 million, which was $97 million lower than a year earlier (down 10 percent). Much of the increase in the quantity of broiler exports is attributable to larger shipments to China/Hong Kong, Russia, and Mexico. Higher exports to the China/Hong Kong market (up 90 percent from 2005) reflect the continued growth in poultry consumption, especially in major cities. Broiler product shipments to Mexico were up 8 percent. In the Mexican market, relatively low broiler meat prices may have provided an incentive to import broiler products as a substitute for turkey products in some applications. Exports to Russia totaled 768 million pounds in the first half of 2006, up 6 percent from a year earlier.

Exports in the second half of 2006 are forecast at 2.8 billion pounds, up about 7 percent from the same period in 2005. The significant increase is due largely to Avian Influenza (AI) related declines in exports to a number of countries in fourthquarter 2005. While most AI outbreaks had only a minor impact on overall broiler production, the news of AI incidents tended to temporarily lower consumer demand.

Turkey Production Increases in First-Half 2006

Turkey production during the first 6 months of 2006 was 2.8 billion pounds, this is a 2.5-percent gain compared with a year earlier. The increase in turkey meat production is due to an increase in the number of birds being slaughtered, as the average live weight of birds at slaughter in the first 6 months of 2006 was the same as a year earlier, at 28.9 pounds per bird. The forecast for turkey meat production in the second half of 2006 is for a 2.7-percent increase compared with the same period last year. The growth in production is again expected to come from a larger number of birds being slaughtered as the number of turkey poults placed for growout during the first 7 months of 2006 totaled 173 million, up 6 percent from a year earlier. Even with higher turkey meat production expected in the second half of 2006, stocks of whole turkeys are expected to remain lower than last year.

The relatively small increase in production has resulted in turkey prices at or above their year-earlier levels. In July, the price of 8-16 pound whole hens in the Eastern market was 75 cents per pound, up 3 percent from a year earlier and 5 percent higher than the July 2004 price. Wholesale prices for whole turkeys are expected to remain slightly higher than their year-earlier levels through the third quarter, but drop below year-ago levels in the fourth quarter.

Turkey Exports Fall by 11 Percent

Over the first 6 months of 2006, U.S. turkey exports totaled 244 million pounds, down 11 percent compared with the previous year. Shipments were lower to a number of markets, with falling exports to Mexico accounting for a large percentage of the decline. Shipments to Mexico in the first half of 2006 totaled 154 million pounds, down 11 percent from last year. Turkey exports to Mexico over the first half of 2006 were likely influenced by the low prices for most broiler products. While export shipments of turkey products to Mexico were lower in first-half 2006, broiler shipments to Mexico were up by 8 percent. With a gradual strengthening of broiler prices expected in second-half 2006, turkey exports are expected to increase. One area that partially offset the declines was higher exports to the China/Hong Kong market. The forecast for the second half of 2006 is for exports of 310 million pounds, a 5-percent increase over the same period last year.

Eggs

First-Half 2006 Egg Production and Prices Higher Than a Year Ago

First-half 2006 prices for table eggs (NY grade A large) averaged slightly more than 67 cents per dozen, or slightly more than 11 percent above the same period a year ago. For 2006, egg prices are forecast to average 69 to 71 cents per dozen, 6.5 percent higher than 2005. In 2007, prices will likely increase almost 12 percent to average 75 to 81 cents per dozen.

Second-quarter 2006 table egg production was 1,610 million dozen, 27 million dozen more than a year ago, mainly due to increases in the U.S. egg-layer flock. First-half 2006 egg production was more than 1 percent above the same period last year. For all 2006, total U.S. egg production is forecast to grow 1 percent over last year.

First-half 2006 retail egg prices averaged 10 percent higher than the same period last year. For all of 2006, retail egg prices are expected to average in the low $1.30s per dozen, more than 7.6 percent higher than 2005. In 2007, retail egg prices are forecast in the low $1.40s per dozen.

U.S. exports of shell eggs and egg products (in-shell egg equivalent) rose from 42.0 million dozens in the first quarter 2006 to 47.4 million dozens in the second-quarter. First-half of 2006, exports were 10.6 million dozen below the same period of 2005. The decrease is mainly due to lower U.S. shipments to Japan, China, and Hong Kong that declined by 5.2, 1.5, and 1.45 million dozen, respectively. In these countries, domestic egg production has been slowly rising following outbreaks of Avian Influenza in 2004 and 2005, causing imports to ease up. On the other hand, U.S. exports of shell and egg products rose substantially to Germany, Denmark, Belgium, and the Netherlands. U.S. exports to Canada declined about 5.4 million dozen (26 percent), Mexico imported 3.8 million dozen more (41 percent), while Dominican Republic and Chile imports were larger during the first half of 2006. For all 2006, U.S. exports of shell egg and egg products (in-shell egg equivalents) are expected to be about almost 14 percent lower than in 2005.

Further Information

For more information view the full Livestock, Dairy and Poultry Outlook - July 2006 (pdf)

August 2006