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US Poultry Outlook Report - May 2007

by 5m Editor
28 May 2007, at 12:00am

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

Broiler Production Higher in 2008

U.S. broiler meat production is expected to total 36.4 billion pounds in 2008, up 2.3 percent from the previous year after an anticipated production decline in 2007. The increases in broiler production are expected to be moderated by higher total meat supplies and increased feed costs. Broiler meat production is expected to be larger throughout the year. With the modest gains in production and expected growth in exports, domestic per capita disappearance levels, after declining by over 1 pound in 2007, are expected to increase slightly in 2008. Most of the gains in production are expected to come from a higher number of birds slaughtered. The average bird weight at slaughter is only expected to increase slightly, as higher feed costs are expected to place an increased premium on feeding efficiency. Cold storage holdings of broiler products are expected to gradually rise in 2008 after having declined markedly in the second half of 2006 and continuing lower in 2007.

The 12-city wholesale price for whole broilers is expected to average between 73 and 79 cents per pound in 2008. This is a 1-percent decrease from 2007, when prices for broiler products were high due to declines in production and low cold storage levels. Most of the decrease is expected to come from lower prices in the second half of the year as supplies of broiler products gradually expand. Production increases for beef and pork in 2008 are also expected to place some downward pressure on prices for poultry products.

Other Chicken

Other chicken meat production is expected to reach 495 million pounds in 2008, up 3 percent from 2007. Other chicken exports are projected to decrease as lower prices for broiler meat, especially in the first half of 2008, are expected to decrease the demand for exports. The estimate for 2008 per capita disappearance of other chicken meat is 1.2 pounds on a retail weight basis, up slightly from 2007.

Turkey

After growing to an anticipated 5.8 billion pounds in 2007, turkey production is expected to reach 5.9 billion pounds in 2008, up about another 1 percent. The growth is expected to come from a higher number of birds slaughtered, with very little growth in average bird weights. Even with several years of positive production growth, per capita disappearance of turkey on a retail weight basis is forecast at 16.9 pounds in 2008, down slightly from 2007 and somewhat lower than earlier in this decade. One reason for the decline in domestic per capita disappearance is the expected growth in turkey exports.

Wholesale prices for whole hen turkeys are expected to average 73 to 79 cents per pound in 2008, down somewhat from 2007. The decrease is expected to come from higher production of turkeys and broilers and increases in cold storage holdings of turkey products. Together, these factors are expected to place downward pressure on whole-bird prices.

Broiler Meat Production Falls in First-Quarter 2007

Broiler meat production in first-quarter 2007 totaled 8.57 billion pounds, down 4.1 percent from first-quarter 2006. In first-quarter 2006, broiler meat production increased by 4.1 percent over the same period in 2005. The decline in meat production was the result of a 2.6-percent decrease in the number of birds going to slaughter compared with a year earlier and a 1.5 percent decrease in the average meat yield per bird slaughtered. The average liveweight of broilers slaughtered in first-quarter 2007 was 5.46 pounds, unchanged from first-quarter 2006.

Broiler meat production for second-quarter 2007 is forecast at 8.9 billion pounds, a decrease of 2.2 percent from the previous year. However, broiler meat production is expected to show year-over-year increases in the third and fourth quarters of 2007. During April 2007, the daily broiler slaughter reported by AMS showed a 2.6 percent increase in number of birds slaughtered compared with April 2006, and there was also a small increase in average weights. However, most of the increase in birds slaughtered was due to one additional slaughter day in April 2007 compared with the previous year. Other indicators of a gradual change to growth in broiler meat production are the weekly changes in the number of chicks placed for growout. Over the last 5 weeks, (April 14 through May 12), the number of chicks placed for growout has averaged 2.2 percent higher than in the same period the previous year.

After reaching a high of 924 million pounds at the end of 2005, broiler cold storage stocks declined to 588 million pounds by the end of first-quarter 2007, down 32 percent from a year earlier. The decline in cold storage holdings is due to a combination of the declines in broiler meat production in the last half of 2006 and the first quarter of 2007 and the continued relative strength of the export market. Cold storage holdings of most broiler products were lower than at the end of firstquarter 2007. A large portion of the drop was due to a sharp decline (65 percent) in leg quarters in cold storage, as improved exports lowered stock levels.

Turkey Meat Production Up Strongly

Turkey meat production totaled 1.41 billion pounds in first-quarter 2007, up 4.1 percent from the previous year. The meat production growth came from the higher number of birds slaughtered (up 5.7 percent), as the average weight of turkeys slaughtered in first-quarter 2007 fell to 29 pounds, down 1.4 percent from firstquarter 2006. Turkey meat production in the second quarter is expected to reach 1.48 billion pounds, as the number of birds slaughtered is expected to remain above the previous year. This would be a 2.4 percent increase in meat production from the previous year.

Cold storage stocks of turkey products continues to be relatively tight, with total holdings at the end of first-quarter 2007 reported at 352 million pounds, down 6.9 percent from the same period in 2006. However the difference between cold storage holdings of whole turkeys and turkey parts is quite large. Stocks of whole turkeys were estimated at 176 million pounds, 7.5 percent higher than the previous year. Stocks of turkey parts were also estimated at 176 million pounds, but this is a 17.7-percent decrease from first-quarter 2006. The decrease in cold storage holdings of turkey parts may be the result of growing exports to markets such as China and the increasing prices of broiler products.

Poultry Trade
2007 Broiler Exports Are Down in First Quarter from Last Year

First-quarter U.S. broiler exports were 1.275 billion pounds, down about 5 percent from first quarter in 2006. The decline in U.S. broiler exports is largely attributable to high leg-quarter prices and a seasonal reduction in shipments to Russia. Although first-quarter broiler shipments declined year-over-year, they were the third-largest first-quarter exports on record. Major first-quarter importers of U.S. broiler meat included Russia, Hong Kong/China, the Baltic countries, the Caribbean countries, and Mexico.

Turkey Exports Finish the First-Quarter Strong

Turkey exports totaled 124 million pounds for the first quarter of 2007, up 4 percent compared with first-quarter 2006. Higher first-quarter exports are attributable to strong demand for turkey meat in countries such as China and Ukraine. Year-overyear first-quarter exports to China increased by more than 204 percent, while exports to Ukraine rose by over 829 percent. Mexico is the leading export market for U.S. turkey meat, followed by China and Russia. However, first-quarter exports to Mexico were off by 6 percent, year-over-year. Lower first-quarter exports to Mexico were partially offset by higher shipments to Russia (up 10 percent) and to Canada (up 14 percent) compared with first-quarter 2006.

Broiler Exports Expected To Exceed 5.5 Billion Pounds in 2008

U.S. broiler exports are forecast to exceed 5.52 billion pounds in 2008. Growth in broiler shipments is expected to be 3 percent. Reasons for expected growth in broiler exports next year are linked to a favorable U.S. currency exchange rate and growing incomes in importing countries.

Growth in Turkey Exports Expected To Continue Through 2008

Exports of U.S. turkey meat are expected to reach 605 million pounds in 2008, an increase of more than 9 percent. Factors likely to drive increases of 2008 turkey exports include a favorable U.S. currency exchange rate, coupled with income increases in importing countries.

Further Information

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

May 2007