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US Poultry Outlook Report - July 2007

by 5m Editor
23 July 2007, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the July 2007: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.

With the strengthening in broiler prices, growers have gradually expanded production. Broiler meat production in the second quarter is expected to be down slightly from the previous year, but it is expected to be higher in the third and fourth quarters of 2007. Whole turkey prices continue to be considerably above year earlier levels, as stocks of whole birds are lower.

Broiler Meat Production Estimates for Third and Fourth Quarters Decreased

U.S. broiler meat production over the first 5 months of 2007 was 14.6 billion pounds, down 2.4 percent from the same period in 2006. Recently the number of chicks being placed for growout has been well above a year earlier, and the number of birds in the broiler breeder flock in May was up 1.7 percent from the previous year. With these trends in place, the production estimate for the second half of 2007 is 18.1 billion pounds, a 2.3-percent increase from the second half of 2006. The production estimate for 2008 was increased by 100 million pounds to 36.5 billion pounds, 2.3 percent higher than in 2007.

Over the last 5 weeks (June 16 to July 14), the average weekly number of chicks being placed for growout was 175 million, up 3 percent from the same period in 2006. Chicks being placed for growout during this period would likely be going to slaughter between the second half of July and the middle of August.

Broiler meat production in May totaled 3.2 billion pounds, down 1.3 percent from a year earlier. The decrease in meat production was largely due to smaller meat yields per bird (down 0.9 percent), as the number of birds slaughtered in May was 784 million (down 0.4 percent) and the average live weight per bird was up 0.7 percent from a year earlier to 5.52 pounds. Preliminary data point toward a small decrease in total broiler meat production in June, mostly due to 1 less slaughter day in June 2007 compared with June 2006. The decline in the number of birds slaughtered is expected to be partially offset by a small increase in average bird weights at slaughter.

With growth in broiler production expected to increase in the second half of 2007, prices for most broiler products are projected to level off or decline slightly compared with the strong first-half prices. Prices for whole birds averaged 78 cents per pound during first-half 2007, 26 percent higher than in the same period in 2006. Prices for broiler parts have also been much stronger in the first half of 2007. Boneless, skinless breast meat prices in the Northeast market averaged $1.52 per pound in first-half 2007, up 43 percent from the same period in 2006, and over the same period leg quarter prices were up 79 percent. Similar large increases in prices also occurred for wing and thigh products.

Even with a forecast increase in broiler meat production in the second half of 2007, broiler meat stocks are expected to remain below those of 2006 for the remainder of 2007. Ending stock levels for the second, third, and fourth quarters were all reduced by 25 million pounds from earlier estimates, due to strong export demand and the relatively high prices for beef and pork products.

Turkey Production Rises in May

Domestic turkey production totaled 510 million pounds in May, up 2.9 percent from the previous year. The number of turkeys slaughtered was up 3.4 percent and the average weight at slaughter was 28.5 pounds, down less than 1 percent from the previous year. With the increase in May, turkey meat production for the first 5 months has increased 4.2 percent compared with the same period in 2006. The increase in meat production is basically a product of higher numbers of birds slaughtered, as the average weight at slaughter over the first 5 months of 2007 has been slightly lower.

Turkey meat production in the second half of 2007 is estimated at 2.94 billion pounds, up 1.7 percent from second-half 2006. The most recent turkey hatchery report showed that the net placement of poults for growout in June was 2 percent higher than the previous year. Over the first 6 months of 2007, the total net placement of poults for growout was 157 million, up 5.1 percent from the same period in 2006.

Even with relatively strong increases in turkey meat production, steady export demand and higher prices in the first half of 2007 for broiler and other meat products has meant that whole turkey prices are considerably higher than yearearlier levels. Prices for whole hen turkeys in the Eastern market averaged 77.8 cents per pound in the second quarter, up 9 percent from the previous year. Whole turkey prices are expected to remain well above those of a year earlier through the third quarter, but are expected be about even with the year-earlier prices in the fourth quarter. Prices for other turkey products have not increased as much as whole birds, but are generally higher than a year earlier. The export market for turkey products in the first half of 2007 has benefited from higher broiler prices.

At the end of May, cold storage holdings of turkey products totaled 400 million pounds, down 14 percent from the previous year. Cold storage holdings for whole turkeys totaled 213 million pounds, down 2 percent from the same period in 2006. For turkey parts, cold storage holdings totaled 186 million pounds, down 25 percent from the same period in 2006. Cold storage holdings are expected to remain tight throughout the remainder of the year, and the estimates for ending stocks for the remaining three quarters have been reduced. The expected quarterly ending-stock levels for 2008 were also lowered.

Egg Production Continues Down in May

U.S. table egg production totaled 537 million dozen in May, down 1.1 percent from the same period the previous year. Over the first 5 months of 2007, egg production has been down every month when compared with the previous year. The lower production in May was the result of a smaller number of birds in the non-hatching laying flock. During May the number of birds in the table egg laying flock averaged 281 million, down 1.9 percent from May 2006. It is expected that the number of birds in the table egg laying flock will remain below that of a year earlier over at least the next quarter, as the number of birds in the layer breeding flock has also been lower than the previous year for the last 4 months.

The smaller production of table eggs has translated into much higher egg prices at the wholesale level. Over the last 8 months (November 2006 to June 2007), wholesale egg prices have averaged $0.98 per dozen, after averaging $0.66 per dozen over the first three quarters of 2006. In the second quarter of 2007, the wholesale price in the New York market averaged $0.92 per dozen, up 47 percent from second-quarter 2006. The expected average price for eggs was increased to $0.90 per dozen in the third quarter, but the fourth-quarter estimate of $0.94 per dozen was left unchanged.

In addition to the lower production levels, egg prices have also benefited from a strong export market. Over the first 5 months of 2007, egg exports have totaled 91.4 million dozen, a 25-percent increase from the same period in 2006. Egg exports have been higher to a number of countries, but the majority of the increase has been due to larger shipments to Mexico (up 15 percent), China (up 224 percent), and a number of EU countries (shipments to the Netherlands, the United Kingdom, and Germany were all up over 74 percent).

Further Information

For more information view the full Livestock, Dairy and Poultry Outlook - July 2007 (pdf)

July 2007