Weekly data through the first half of January has been consistent with the egg count in incubators at the beginning of the month. Year over year changes in broiler-type hatchery output have been within one percent of unchanged every month since August. This lays the foundation for chicken slaughter during the first quarter of 2016 to be about the same as a year earlier, although there is one additional slaughter day this quarter (leap year), so slaughter will probably be up one percent.

Broiler-type pullet chicks placed in the hatchery supply flock during December topped the year earlier number by 11 percent. This was the biggest percentage increase since September (+18 percent) and followed a five percent decline in November. For all of 2015, pullet placements totaled 89.9 million chicks, up from 84 million chicks in 2014. This increase will allow the chicken industry to move chicken production higher in 2016.

Hatchery supply flock production potential is defined as the sum of pullet placements 7-15 months prior to any given month. Supply flock production potential for this month is up 5.7 percent from January 2015, yet weekly hatchery output has been close to unchanged.

Similarly, December supply flock production potential was up 5.2 percent from December 2014 while hatchery output was unchanged. Wholesale prices for chicken breast meat have been at the lowest values since late 2008 and leg quarters prices have been at the lowest values since early 2006. This is having an impact on hatchery flock production decisions. Hatchery supply flock productivity has run below year earlier levels for the last two years, beginning last June (see top graph).

The magnitude of year over year increases in the hatchery supply flock population in coming months increases in coming months (see middle graph), based on the surge in pullet placements last summer (+10 percent in June, +20 percent in July, +6 percent in August and a 20 percent gain in September). The increases in the calculated hatchery supply flock peak in April, up 8.7 percent from April 2015.

Assuming current hatchery flock productivity, this results in April broiler-type hatch up 5.5 percent from a year earlier. Given normal growing conditions, these chicks would be slaughtered in June and July, providing a proportional boost to chicken production. The graph (bottom graph) shows the projected increase in slaughter for each quarter in 2016.