USDA Outlook: U.S. broiler meat production projected to fall 5.1% year-over-year to 9 billion lbs. in Q4, driven by decrease in slaughters; turkey output to rise slightly to 1.5 billion lbs.; table egg output expected to rise for 12th consecutive quarter
November 16, 2011
– The following article is excerpted from the November Livestock, Dairy and Poultry Outlook published by the Economic Research Service of the USDA.
Broiler Production To Decrease in Fourth Quarter
Fourth-quarter 2011 broiler meat production is forecast at 9.0 billion pounds, 5.1 percent below that of a year earlier. The lower fourth quarter production is expected to be driven by sharp declines in the number of birds slaughtered, but these declines are expected to be somewhat offset by an increase in average live weights. Over the last several weeks, preliminary slaughter data show a lower overall number of broilers slaughtered driven by reduced numbers of lighter birds, pointing toward higher average weights.
Broiler meat production in third-quarter 2011 was 9.53 billion pounds, 0.3 percent above the same period in 2010. This increase was the result of a 3-percent rise in average live weights, to 5.80 pounds. The increase offsets a decline of 2.9 percent in the number of broilers slaughtered.
Broiler meat production in 2012 is forecast at 36.7 billion pounds, a decrease of 1.7 percent from 2011. The decline in broiler meat production is expected to come mainly from a lower number of birds slaughtered, as bird weights are expected to be close to or slightly higher than in 2011. Broiler integrators are not expected to have any strong incentive to expand production, due to the combination of continued high prices for corn and soybean meal and relatively low broiler product prices at the wholesale level. Demand growth will likely be dampened by relatively slow economic growth and continued high unemployment.
The most recent weekly broiler hatchery report showed that over the last 5 weeks (Oct. 8 through Nov.5), the number of chicks placed for growout averaged 7.9 percent lower than in the same period in 2010. This 5-week moving average has become more strongly negative over the last several months. The number of chicks placed for growout is expected to remain well below year-earlier levels through the remainder of 2011 and into 2012, but gradually to become closer to year-earlier levels in mid-2012.
Third-Quarter Ending Stocks Lower
Even though broiler meat production rose slightly in third-quarter 2011, ending cold storage holdings of broiler products totaled 645 million pounds, down 4.9 percent from the previous year and down 71 million pounds from the end of the second quarter. With the exceptions of breast meat and drumsticks, cold storage holdings were lower for all other categories. Holdings of leg meat products were down sharply, with stocks of leg quarters at 87 million pounds, 29 percent lower than the previous year. Stocks of leg quarters have moved lower over the last 4 months as the export market has strengthened. Cold storage holdings of legs, thighs, and thigh meat were also down from the previous year. Stocks of wings totaled 52 million pounds at the end of third-quarter 2011, 8 percent lower than a year earlier. Over the last 2 months, stocks of wings have fallen by almost 21 million pounds. Stocks of whole birds are also down from the previous year, although this decline was not reflected in whole bird prices, which declined in September.
Turkey Production Steady
U.S. turkey meat production in third-quarter 2011 was 1.4 billion pounds, up less than 1 percent from a year earlier. As with broiler production, third-quarter 2011 turkey production saw a reduction in the number of birds being slaughtered and an increase in their average weight. In the case of turkeys, the number of birds slaughtered in the third quarter was 61.9 million, down 1 percent from the previous year. Offsetting this was a 2-percent increase in average live weights to
Turkey meat production in fourth-quarter 2011 is forecast at 1.5 billion pounds, which would again be a small increase from a year earlier. Growth in turkey production in the second half of 2011 is expected to be quite different from the first half, which showed strong increases in turkey meat production.
Turkey production in 2012 is forecast at 5.85 billion pounds, which would be an increase of just under1 percent from 2011. Even though turkey prices have remained strong through all of 2011, turkey producers will be faced with the impact of high grain prices and a relatively sluggish domestic economy.
Although production was up only slightly in third-quarter 2011, cold storage holdings of turkey totaled 515 million pounds at the end of September, up 8.8 percent from a year earlier. The growth in overall stocks hides a wide gap in the direction of stocks levels for whole birds as opposed to those for turkey products. Stocks of turkey products totaled 234 million pounds at the end of the third quarter, an increase of 25 percent from the previous year. This stock increase has come even as exports of turkey products have been strong, up 23 percent year-over-year through September. Stocks of whole birds have been moving in the opposite direction. At the end of September, stocks of whole birds were estimated at 281 million pounds, down 2 percent from the same period in 2010. With lower stock levels, wholesale prices of whole birds have remained above their
Overall turkey cold storage holdings at the end of 2011 are forecast at 215 million pounds, about 12 percent higher than the previous year. As with third-quarter 2011, almost all the increase will be from higher holdings of turkey products, with little or no increase in stocks of whole birds expected.
Egg Production Higher
Table egg production in third-quarter 2011 was just over 1.65 billion dozen, up slightly from a year earlier. On a year-over-year basis, table egg production has now risen in the last 11 consecutive quarters. With the number of table egg layers in production increasing from the previous month, table egg production is expected to continue above the previous year’s level in fourth-quarter 2011. However, overall table egg production in 2012 is expected to be only about even with the previous year, as weaker egg prices, high grain costs, and a slowly growing economy dampen expansion.
Hatching egg production in third-quarter 2011 was 264 million dozen, down 7 million dozen from third-quarter 2010, a decrease of 2.6 percent. Hatching egg production is expected to be sharply lower in fourth-quarter 2011 as broiler producers cut back on production. The decrease in third-quarter 2011 was chiefly due to a lower number of meat-type hens as the demand for broiler chicks declined. Hatching egg production is expected to level off in the latter part of 2012 as broiler production starts to gradually expand.