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US Poultry Outlook Report - October 2006

by 5m Editor
23 October 2006, at 12:00am

By U.S.D.A., Economic Research Service - This article is an extract from the October 2006: Livestock, Dairy and Poultry Outlook Report, highlighting Global Poultry Industry data.

USDA Economic Research Service

Tighter Prospective Corn and Hay Supplies Boost Prices

U.S. corn production for 2006 was forecast at 10.9 billion bushels in the October Crop Production report, down from the September forecast of 11.1 billion bushels. Hay production was forecast at 147 million tons this year, down 2.4 percent from last year, but up from the August estimate.

Poultry

Broiler meat production in July and August was in line with the third-quarter estimate of 9 billion pounds, up less than 1 percent from the same period last year. With slow growth expected in broiler meat production, the estimates for the quarterly ending stocks for the third and fourth quarters of 2006 were reduced. The relatively slow growth in turkey production and low stock levels pushed whole turkey prices upward. Relatively tight supply conditions are expected to continue into the fourth quarter. With only small production growth expected in the third and fourth quarters, estimates for ending stocks were reduced.

Poultry Trade

U.S. exporters shipped less broiler meat in August than a year ago, while August turkey exports were up slightly, compared to August 2005. Broiler exports totaled 423 million pounds, a year-over-year decline of almost 21 percent from the very strong exports of last August. August turkey exports totaled 55 million pounds, an increase of almost 9 percent from a year ago. Broiler meat exports in 2006 are expected to be 4 percent higher than in 2005. Exports of turkey products in 2006 are expected to be about 6 percent below exports in 2005.

Broiler Production Steady, Cold Storage and Prices Down

Broiler meat production in August (RTC basis) was 3.2 billion pounds, up 1.9 percent from August 2005. The number of birds slaughtered was 793.3 million, down slightly from a year earlier, but the average live weight at slaughter was up 1.5 percent to 5.36 pounds. This was the lowest average weight so far this year, but weights normally hit their lowest points in July and August due to summer heat stress. Broiler meat production in both July and August was in line with the thirdquarter estimate, so no revisions were made. The broiler meat production estimate for the third quarter is 9 billion pounds, up less than 1 percent from the same period last year. The slow rate of growth is expected to continue in the fourth quarter, as the broiler production forecast is slightly less than 9 billion pounds, again an increase of less than 1 percent from the previous year.

Over the 5-week period (September 9 - October 7), the number of chicks placed for growout has been down slightly from the same period in 2005. With no growth in the number of broiler chicks being placed for growout, all the increase in broiler meat production in the fourth quarter will likely come from higher average weights. With slow growth expected in broiler meat production, the estimates for the quarterly ending stocks for the third and fourth quarters of 2006 were reduced. The estimate for third-quarter 2006 ending stocks was lowered by 35 million to 690 million pounds. The estimate for the fourth quarter was lowered by 25 million to 725 million pounds. The slow growth in broiler meat production is expected to continue into 2007, so the ending stock estimates for the first and second quarters of 2007 were each reduced to 725 million pounds.

With higher production of beef and pork, the slow growth in broiler meat production has not resulted in price strength for many broiler products. In the third quarter of 2006 the 12–City whole bird price averaged 67.8 cents per pound, down over 4 cents per pound from a year earlier. Prices were down for a number of other broiler products. In the Northeast market the September average price for boneless/skinless breast meat was $1.30 per pound and leg quarters averaged 33.7 cents per pound, down about 8 cents per pound for breast meat and almost 14 cents per pound for leg quarters compared with a year earlier. The prices have not fallen for all products, as wing prices in September averaged $1.06 per pound, almost 10 cents per pound higher than in September 2005.

Turkey Prices Continue Higher

Turkey meat production over the first 8 months of 2006 totaled 3.8 billion pounds, about 3 percent higher than during the same period in 2005. The relatively slow increase in turkey production and fairly low stock levels pushed whole turkey prices upward. The average price for whole hen turkeys (8-16 lbs. in the Eastern market) averaged 79.4 cents per pound in the third quarter, about 3 cents higher than the previous year. Relatively tight supply conditions are expected to continue into the fourth quarter and the price estimate was revised to 85 cents per pound, about 1.5 cents per pound higher than in 2005 and about 8 cents higher than in fourth quarter 2004.

Overall turkey meat production in August was 500 million pounds, up 2.5 percent from a year earlier. The number of turkeys slaughtered was up 1 percent to 23.4 million, and the average live weight at slaughter was 26.93 pounds, up 1.3 percent from a year earlier. As with broiler production, the July and August turkey meat production was in line with expectations. No changes were made to the third- or fourth-quarter estimates, which are both 1.4 billion pounds, only slightly higher than for the same time last year.

With only small growth expected in the third and fourth quarters of 2006, the estimate for turkey ending stocks were reduced. The estimate for third-quarter ending stocks was reduced to 480 million pounds, down 70 million pounds. The estimate for fourth-quarter ending stocks was lowered to 225 million pounds, a reduction of 25 million pounds.

Broiler Exports Lower in August

August broiler exports totaled 423 million pounds, a decline of almost 21 percent from a year ago; however, exports in August 2005 were the fourth-largest ever. Lower-than-expected exports in both July and August prompted a lowering of the USDA third-quarter forecast of broiler meat exports by 40 million pounds, to 1.350 billion pounds, a quantity still 1 percent more than in the third quarter of last year. The export forecast for fourth quarter 2006 was also lowered, in anticipation of slower growth. The fourth-quarter forecast was lowered 25 million pounds, to 1.425 billion pounds, but still more than 8 percent above fourth quarter last year. A total of 65 million pounds was also taken off second-half 2007 estimates, specifically, 25 million pounds off the third quarter and 40 million pounds off the fourth quarter.

Turkey Exports Were Up in August

Turkey exports totaled 55.4 million pounds in August, up almost 8 percent from a year ago. Higher exports to Russia, Hong Kong, Taiwan, and Canada accounted for most of the increase. Despite the increase in August exports, both third-and fourthquarter export forecasts were each lowered 10 million pounds, to 140 and 150 million pounds respectively, as price-sensitive foreign markets respond to higher turkey prices. U.S. turkey meat exporters are expected to ship 534 million pounds of products in 2006, a reduction of more than 6 percent compared with 2005. Turkey meat exports in 2007 are expected to be 575 million pounds, or more than 7 percent above exports in 2006.

Further Information

For more information view the full Livestock, Dairy and Poultry Outlook - October 2006 (pdf)

October 2006