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US Poultry Outlook Report - March 2007

by 5m Editor
21 March 2007, at 12:00am

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

Poultry:

With a decline in broiler meat production in January 2007, the estimate for first-quarter 2007 meat production was lowered by 75 million pounds to 8.75 billion pounds and the estimate for the second quarter was lowered by 50 million pounds, bringing the 2007 estimate to 35.9 billion pounds. Prices for almost all broiler products have strengthened considerably and are much higher than in the first 2 months of 2006. Turkey meat production in first-quarter 2007 is estimated at 1.41 billion pounds, up 4 percent from a year earlier. Even with the higher production and increased stock levels, prices for many turkey products were higher than at the start of 2006.

Poultry Trade:

U.S. broiler exports finished strong in 2006, while turkey exports fell short. Broiler shipments were down, while turkey shipments were up, for January 2007. Broiler exports in January totaled 396 million pounds, a decline of 7 percent, while turkey exports totaled 42 million pounds, an increase of 13.3 percent from a year ago.

Poultry

Broiler Production Down in January, 2007 Estimate Revised Downward

Broiler meat production for January 2007 was reported at 3.01 billion pounds, down 1.3 percent from the previous year. The major source of the decline was falling meat yields per bird, down 1.8 percent from the previous year, as the total number of birds slaughtered was up slightly from January 2006 to 749 million. The total liveweight of broilers at slaughter was up 0.5 percent from the previous year, and the average liveweight remained the same at 5.5 pounds.

The decline in broiler meat production in January 2007, even with one more slaughter day than in January 2006, led to the first-quarter 2007 meat production estimate being lowered by 75 million pounds to 8.75 billion pounds, down 2 percent from the same period in 2006. The second-quarter 2007 meat production estimate was lowered by 50 million pounds, bringing the total yearly estimate to 35.9 billion pounds.

Revisions of the 2006 broiler meat production estimates in the NASS Poultry Slaughter 2006 Annual Summary produced, for the most part, only small changes to the quarterly estimates. The only change of note was an upward revision of 21 million pounds in fourth-quarter 2006 broiler meat production to 8.8 billion pounds. The revised annual estimate of broiler meat production in 2006 is now 35.75 billion pounds, up 23 million pounds from the previous estimate. This is a 1.1-percent increase over 2005. The larger production in 2006 was chiefly the result of a 1.8- percent increase in the average weight at slaughter, as the total number of broilers slaughtered declined by 0.2 percent.

Weekly chick placements over the last 5 weeks (February 3 to March 3) have averaged 172 million, 1.3 percent lower than during the same period in 2006. Weekly chick placements have been below those of the previous year almost continuously since mid-September 2006, but the magnitude of year-over-year declines has been narrowing. The strong increases in broiler-part prices seen in January and February are likely to convince producers to slowly expand chick production.

Over the first 2 months of 2007, the 12–city whole broiler price averaged 73.2 cents per pound, up 16 percent from the low prices of the same period in 2006. Prices for almost all broiler products have strengthened considerably compared with fourthquarter 2006 and are much higher than in the first 2 months of 2006. Bonelessskinless breast meat prices in the Northeast market averaged $1.36 per pound during January and February, up 34 percent from the previous year. Prices for ribon breasts averaged 93 cents per pound, an increase of 48 percent from same time in 2006. Leg quarter prices during the first 2 months of 2007 averaged 36.4 cents per pound, up 55 percent from the same period in 2006. Only wing prices have shown any weakness, declining somewhat from their normal seasonal high around the “Super Bowl” period. With lower broiler meat production forecast for first-half 2007, broiler prices are expected to remain above their year-earlier levels over at least the next several months.

The NASS Cold Storage 2006 Summary included some revisions to the 2006 ending quarterly stocks data for broiler meat. Revisions to earlier quarters were minor, but the ending stocks estimate for 2006 was lowered by 9 million pounds to 745 million pounds, a level generally in line with ending stocks in previous years. Ending stocks for 2005 had been a record 924 million pounds, placing strong downward pressure on broiler meat prices during the first half of 2006.

Turkey Production Forecast Up in 2007

U.S. turkey meat production in January 2007 was 483 million pounds, up 8.1 percent from a year earlier, with much of the increase due to an additional slaughter day in 2007. The number of turkeys slaughtered was 20.7 million, an 11-percent jump from a year ago. However, the total liveweight of turkeys at slaughter did not rise as steeply (up 8.6 percent) because the average bird weight at slaughter fell by 2.1 percent from the previous year. Turkey meat production in first-quarter 2007 is estimated at 1.41 billion pounds, an increase of 4 percent from first-quarter 2006. Only minor revisions to 2006 turkey meat production were made in the NASS Poultry Slaughter 2006 Annual Summary.

Ending stocks for turkey in 2006 were revised down slightly to 218 million pounds, about 6 percent higher than in 2005. Ending stock levels for January 2007 were 304.3 million pounds, a 16.8-percent increase from a year earlier. Not only were stocks higher at the end of January, but the composition of the stocks is totally different from a year ago. Throughout most of 2006, stock levels for whole turkeys were considerably lower than the previous year. By the end of January 2007, this situation had completely changed and stocks of whole turkeys totaled 123 million pounds, 42 percent above the previous year.

Even with the higher production and increased stock levels, prices for many turkey products in early 2007 were higher than at the start of 2006. Over the first 2 months of 2007, prices for whole birds (hens and toms) averaged 69 cents per pound, up 2.5 percent from the same period in 2006. Turkey prices are expected to remain strong through at least the first half of 2007, helped by higher broiler prices and continued growth in the domestic economy.

PoultryTrade

Broiler Exports Finished Strong in 2006

For the fourth quarter of 2006, broiler exports finished at 1.412 billion pounds, an increase of 7.4 percent from a year earlier and the third-highest for any quarter recorded this decade. Broiler exports for 2006 finished at 5.272 billion pounds, 1.3 percent above 2005. Most U.S. broiler shipments went to Mexico, China/Hong Kong, Russia, and the Commonwealth of Independent States excluding Russia. These countries, plus the Caribbean Islands, accounted for 64 percent of all U.S. broiler shipments, with 30 percent going to Russia (see chart 1). Shipments to China reached record levels in 2006. Chinese imports of U.S. broiler meat have been on the rise for the past several years and are expected to continue in 2007.

Broiler Shipments Fell in January

Broiler exports for January 2007 totaled 396 million pounds, down 7 percent from a year ago. Rising broiler prices likely were a contributing factor in the decline in shipments for January 2007. First-quarter broiler shipments are expected to reach 1.325 billion pounds.

Turkey Exports Declined in 2006

Turkey exports for the fourth quarter of 2006 were 149 million pounds, less than 1 percent higher than 2005 fourth-quarter shipments. Approximately 54 percent of the total fourth-quarter turkey shipments went to Mexico in 2006, compared with 61 percent in the fourth quarter of 2005. Mexico is by far the largest U.S. market, followed by Russia and Canada. Total turkey exports for 2006 were down by 4.1 percent. Of the total 546 million pounds of turkey meat shipped in 2006, almost 311 million pounds (57 percent) went to Mexico (see chart 3).

Turkey Shipments Rose in January

Turkey shipments totaled 42 million pounds in January, up 13.3 percent from a year ago. The primary reason for the increase in turkey shipments was an increase in import demand by other countries, specifically China and the Caribbean Islands. Shipments to China increased from 801 thousand pounds in January 2006 to 4.8 million pounds in January 2007, and shipments to countries within the Caribbean Islands increased substantially as well. Turkey shipments in the first quarter of 2007 are expected to reach 130 million pounds.

Further Information

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

March 2007