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US Poultry Outlook Report - July 2005

by 5m Editor
25 July 2005, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the July 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.

Poultry Outlook Report - July 2005 - By U.S.D.A., Economic Research Service - This article is an extract from the July 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. USDA Economic Research Service

Broiler Meat Production Estimate for Second-Quarter Increased

U.S. broiler meat production was up 4.6 percent in the first quarter of 2005, and the revised estimate for the second quarter is now 8.88 billion pounds. This is 50 million pounds higher than earlier estimates and 4.5 percent higher than the same period a year earlier. This adjustment pushes the estimate for 2005 to 35.5 billion pounds, an increase of 4.1 percent from the previous year.

Small increases in turkey production, along with strong export demand, have continued to provide strength for turkey prices. With only a small increase in production expected in the second half of 2005, whole bird prices are expected to remain close to those of last year. With only small increases in domestic production and strong increases in exports, per capita turkey consumption is expected to decline in 2005 to 16.6 pounds, down about 0.4 pound from 2004.

Broiler meat production in May totaled 3.0 billion pounds, up 9 percent from a year earlier. A large portion of this increase was due to May 2005 having one more slaughter day than in May 2004. The 9 percent increase in meat production was due to a combination of an increase in the number of birds slaughtered (up 6.1 percent) and an increase in the average weight of those birds at slaughter (up 2.3 percent). Preliminary data point towards an increase of 4 to 5 percent in the amount of broiler meat produced in June due again to a combination of a higher number of birds being slaughtered and a 1- to 2-percent increase in average weights.

With strong increases in broiler production over the first half of 2005, prices for most broiler products remain below the levels of a year earlier. The exception is leg quarters where a strong export market has pushed prices since mid-June over 40 cents per pound, over 10 cents higher than at the beginning of 2005. Prices for whole birds have averaged 72.3 cents per pound over the first half of 2005. This is about 5 percent lower than in the same period in 2004. Prices for breast meat products continue to be substantially lower than the very strong prices seen in the first half of 2004. In the first half of 2005, prices for boneless/skinless breast meat in the Northeast market averaged only $1.45 per pound after averaging $2.07 per pound in 2004.

With broiler production forecast to rise 3.7 percent over the second half of 2005, prices are only expected to slowly increase. However, prices in the second half of 2005 will strengthen in comparison to a year earlier as prices for almost all broiler products fell heavily in the second half of 2004. Prices for export-sensitive parts like leg quarters are expected to remain strong in the second half of 2005 as exports to most major markets are forecast to remain strong.

Broiler exports in May were 488 million pounds, 41 percent higher than in May 2004. Over the first 5 months of 2005, broiler shipments have totaled 2.16 million pounds, up 28 percent from the same period in 2004. Some of the increase in the quantity of broiler meat exports has been offset by somewhat lower prices especially at the beginning of the year. However, with leg quarter prices strengthening over the last few months, the value of broiler exports is expected to grow faster in the coming months. On a quantity basis, shipments of leg quarters made up 66 percent of total broiler shipments over the first 5 months of 2005. The total value of broiler exports over the first 5 months of 2005 is $777 million, up 21 percent from the previous year. Most of the increase in broiler exports through May has come from higher shipments to Russia, Mexico, Hong Kong/China, and other major markets. One market that has shown strong growth so far in 2005 has been Cuba, with shipments totaling 110 million pounds, up 60 million (142 percent) from 2004.

With the strength in the export market so far this year, the export forecast for 2005 has been increased by 70 million pounds to 5.04 billion pounds, up almost 6 percent from 2004. The estimate for 2006 exports was also increased by 65 million pounds to 5.18 billion pounds, which would be a 3-percent increase. Most of the expansion in 2006 is expected to come from larger shipments to the current major markets (Russia, Mexico, and a number of Asian and Eastern European countries).

Turkey Production Rises in May

Domestic turkey production totaled 460 million pounds in May, up 2.5 percent from the previous year. Turkey production has now risen in 3 of the last 5 months, but so far in 2005 the overall production is just slightly above where it was in the same period in 2004. Most of the growth in turkey production over the first 5 months of 2005 has come from higher weights at slaughter as the number of birds has been down 5 percent. Turkey hatchery numbers (eggs set in incubators and pullets placed for growout) continue to point to lower production in the future. The estimate for second-quarter 2005 turkey meat production is 1.38 billion pounds, up only marginally from a year earlier.

The small increases in turkey production, along with strong export demand, have continued to provide strength for turkey prices. Prices for whole turkeys averaged 67.7 cents in the second quarter, up slightly from the previous year. With only a small increase in production expected in the second half of 2005, whole bird prices are expected to remain close to those of a year earlier for the remainder of 2005. Prices for other turkey products have not increased much, but are expected to gradually strengthen in the second half of the year.

Turkey exports totaled 48 million pounds in May, up 42 percent from the previous year. Over the first half of 2005, turkey exports are expected to total 266 million pounds, up over 50 percent from the same period in 2004, when turkey shipments were limited by restriction due to avian influenza (AI) outbreaks. Most of the growth in turkey exports has come from larger shipments to Mexico. As with broilers shipments, turkey exports to Hong Kong/China and Japan have also increased substantially without any AI related restriction on exports. With only small increases in domestic production and strong increases in exports, per capita turkey consumption is expected to decline in 2005 to 16.5 pounds, down about 0.5 pound from 2004.

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For more information view the full Livestock, Dairy and Poultry Outlook - July 2005 (pdf)

Source: Livestock, Dairy and Poultry Outlook - U.S. Department of Agriculture, Economic Research Service - July 2005