Poultry Outlook Report - June 2005 - By U.S.D.A., Economic Research Service - This article is an extract from the April 2005: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data. The report indicates that upward revisions in U.S. broiler meat production for February and March boosted production for broilers in first-quarter 2005 to 8.57 billion pounds, 4.6 percent higher than the same period last year.

Revisions Boost First-Quarter Broiler Production

The production projections for the second, third, and fourth quarters of 2005 have also been revised upward. Broiler production in 2005 is expected to total 35.4 billion pounds, up 3.8 percent from last year. Turkey exports over the first 4 months of 2005 have totaled 175 million pounds, almost 65 percent higher than in 2004, chiefly due to higher shipments to Mexico.

Upward revisions in U.S. broiler meat production boosted first-quarter 2005 production to 8.57 billion pounds, up 118 million from the previous estimate. This is a 4.6-percent increase from the same period in 2004. The increase was due to a number of factors. First, the number of birds slaughtered in the first quarter was up 1.2 percent from the previous year. Second, the weight of birds at slaughter averaged 5.33 pounds, up 2.2 percent from first-quarter 2004. Third, the useable meat yield that processors achieved was higher. The meat yield is the percentage of meat that processors are able to remove from an average carcass. In the first quarter of 2005, the percentage of ready to cook meat production compared with the total liveweight of birds slaughtered was .745 percent. This yield factor is 1.1 percent higher than for the same period in 2004.

Total broiler meat production in April was 2.85 billion pounds, only 1.4 percent higher than the previous year. However, the major reason for the small increase was that April 2005 had one fewer slaughter day than in the previous year. With a higher number of birds expected to be slaughtered in May and June and with slaughter weights averaging about 2 percent higher than the previous year, the estimates for broiler production in the second and third quarters of 2005 were both increased by 50 million pounds and the fourth quarter estimate was increased by 25 million pounds. These changes pushed the broiler meat production estimate for 2005 to nearly 35.4 billion pounds, 3.8 percent higher than in 2004.

With higher production, prices for most broiler products continue to be below the strong prices of a year earlier. Over the first 5 months of 2005, prices in the Northeast market for boneless/skinless breast meat averaged $1.47 per pound, down 26 percent from the same period in 2004. The average prices for boneless/skinless thigh meat and wings were also lower, down 18 and 10 percent, respectively. With no restrictions on exports, total shipments of leg quarters were up 19 percent during the first 4 months of 2005 compared with the same period in 2004. These higher shipments have been reflected in strengthening prices. Leg quarter prices averaged 33.5 cents per pound through May, down 3 percent from a year earlier. However, prices for leg quarters have strengthened through the first 5 months of 2005, with the price in May up 9 cents per pound from January.

Broiler exports in April totaled 470 million pounds, up 46 percent from last year. The broiler export increase during the first 4 months of 2005 (up 24 percent) is due in large part to the elimination of avian influenza-based restrictions on broiler shipments like those that held down trade in the first half of 2004. The increased shipments went to a number of countries. Exports to Russia in the first 4 months of 2005 totaled 426 million pounds, up 4 percent from the same period in 2004. In addition to the small increase in shipments to Russia, has been strong export growth to Commonwealth of Independent States (CIS) countries. Exports to the Ukraine totaled 54 million pounds, up 184 percent. Shipments were also higher to a number of Asian markets, with shipment to the Hong Kong/China market up by 70 percent.

Turkey Production Higher in the First Quarter, but Declined in April

After revisions, turkey meat production in the first quarter of 2005 totaled 1.32 billion pounds, up slightly from first quarter 2004. On a year-over-year basis, turkey meat production had decreased for seven consecutive quarters. However, turkey meat production in April was down 1.4 percent from the previous year to 443 million pounds. The decrease in April was due chiefly to the one fewer slaughter day compared with the previous year. However, the lower number of turkeys being slaughtered (down 6.1 percent) was partially offset by a 5.2-percent increase in the average liveweight at slaughter. Turkey meat production is expected to be roughly equal to the previous year in the next three quarters, with the estimate for 2005 now just marginally higher than in 2004.

With supplies about even with last year and much stronger export demand, wholesale prices for most turkey products have remained strong even when compared with last year. The average price for whole hen turkeys in the Eastern region in May was 67.7 cents per pound, up 2 percent from the previous year, but 13 percent higher than in May of 2003. MDM (mechanically deboned meat), which is a major export product to Mexico, averaged 33 cents per pound in April, down 3 cents per pound from April 2004, but almost 100 percent higher than in April 2003. Prices for most turkey products are expected to remain strong through the rest of 2005, as flat production and a strong export market keep upward price pressure on most products.

Turkey exports in the first 4 months of 2005 totaled 175 million pounds, up 65 percent from last year. Turkey exports in 2004 suffered from the same disease restrictions as broiler exports, so exports have grown strongly now that the restrictions have been lifted. The major reason for the increase in exports has been the expansion of shipments to Mexico. Over the first 4 months of 2005, shipments to Mexico totaled 113 million pounds, an 81-percent increase from the same period in 2004. As with broilers, larger shipments to Asian countries are also expected to boost turkey exports in 2005, especially in the first half of the year. Overall turkey exports in 2005 are expected to total 526 million pounds, 19 percent higher than in 2004.

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