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US Poultry Outlook Report - June 2007

by 5m Editor
25 June 2007, at 12:00am

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

Poultry:

From the beginning of the second quarter, higher numbers of broiler chicks have been placed for growout compared with the same period in 2006. This reverses the trend seen over the previous two quarters. Overall meat production in second-quarter 2007 is now expected to total 8.98 billion pounds, down less than 2 percent from the same period in 2006, and meat production in the third and fourth quarters of 2007 is expected to be higher than in the same periods in 2006.

Even with growth in turkey production in the first quarter of 2007 and expected growth in the second quarter, prices for whole turkeys and many turkey parts are well above year-earlier levels. Turkey prices have benefited from the strength of broiler product prices, along with generally higher prices for beef and pork.

April Broiler Production Rises, Prices Strong

Total broiler meat production in April was 2.86 billion pounds, up 1.6 percent from April 2006. The major reason for the production increase was that April 2007 had 1 more slaughter day than the previous year. The additional slaughter day resulted in a 2.8 percent increase in the number of birds slaughtered compared with April 2006. The increase in birds slaughtered, and a slight increase in average liveweights, was partially offset by a 1.2 percent decrease in the meat yield per bird. With a higher number of chicks being placed for growout, the total number of birds slaughtered in the second quarter is expected to be close to the number for second-quarter 2006. Overall meat production in second-quarter 2007 is now expected to total 8.98 billion pounds, down less than 2 percent from the same period in 2006.

The pattern over the last several quarters of a smaller number of broilers going to slaughter is expected to be reversed in the third and fourth quarters. Broiler meat production is expected to total 18.1 billion pounds in the second half of 2007, up 2.3 percent from the previous year. Average liveweight in the third and fourth quarter is expected to be up only slightly from the previous year. Over the last 5 weeks, (May 12 to June 9), the number of chicks being placed for growout each week has been close to 181 million, up 3.5 percent from the same period in 2006.

Over the last several months, prices for most broiler products have strengthened because production was lower and stock levels have declined. In May, the 12-City wholesale price for whole broilers averaged 81 cents per pound, up 36 percent from the previous year and 11 cents per pound higher than at the beginning of the year. Prices for broiler parts have strengthened to an even greater extent. In May, prices for boneless/skinless breast meat in the Northeast market averaged $1.70 per pound, up 51 percent from May 2006 and 42 cents per pound more that at the beginning of the year.

With broiler production expected to increase in the second half of 2007, price increases are expected to slow and then decline in 2008. The extent of the impact on prices will depend on the health of the general U.S. economy, the available supplies of competing proteins such as beef and pork, and the strength of the export market.

Turkey Production Climbs in April

Turkey meat production in April was 462 million pounds, up 6.3 percent from a year earlier. The increase was, as with broilers, largely the result of an additional slaughter day in 2007 compared with April 2006. Overall turkey meat production for second-quarter 2007 is expected to be 1.48 billion pounds, up 2.4 percent from the same period in 2006. Turkey meat production (on a year-over-year basis) has been expanding for the last six quarters. The number of turkeys slaughtered increased by 5.6 percent in April to 20.5 million birds, and there was a 1-percent increase in their average liveweight.

Even with turkey meat production expected to be about 3 percent higher in the first half of 2007 compared with a year ago, wholesale prices for most turkey products have remained strong. May prices for whole-hen turkeys in the Eastern region were 77 cents per pound, an increase of 8 percent from May 2006. Over the first 5 months of 2007, whole hen turkey prices have ranged between 68 and 77 cents per pound, averaging 5 percent higher than in the same period in 2006. Prices have also been higher for many turkey parts. April prices for some turkey parts were only slightly higher than a year earlier, but prices of items like wings were between 70 and 80 percent higher. Turkey prices have benefited from the strength of broiler product prices, along with generally higher prices for beef and pork. With broiler meat production expected to expand in the third and fourth quarters, prices for turkey parts are expected to gradually move closer to their year-earlier levels.

Egg Production Lower in April, Production Estimates Reduced

Over the first 4 months of 2007, the number of birds in the U.S. table-egg flock has averaged 287 million, down 1.2 percent from the same period in 2006. With the lower number of birds, table egg production was down 1.2 percent in the first quarter and 2 percent in April. This lower production is expected to continue in the second quarter, and the production estimate for second-half 2007 was reduced, so that production is now expected to be nearly identical to production in second-half 2006.

Lower production and strong exports over the first 4 months of 2007 have led to egg prices being considerably higher than in the previous year. Over the first 4 months of 2007, wholesale egg prices in the New York market averaged 102.5 cents per dozen, 46 percent higher than in the same period in 2006. Prices in the New York region continued to be strong in May, averaging around 93 cents per dozen. Prices are expected to average between 88 and 89 cents per dozen in second-quarter 2007 (up more than 40 percent from the previous year). Prices in second-half 2007 are expected to average lower than in the first half of 2007, but to still remain higher than those of the previous year.

Further Information

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

June 2007