USDA Outlook: U.S. broiler meat production down 3% year-over-year to 3.1 billion lbs. in October; turkey meat output nearly unchanged at 525 million lbs.; table egg production up 1.9% to 562 million dozen

Andrew Rogers

WASHINGTON , December 15, 2011 (press release) – The following article is excerpted from the December Livestock, Dairy and Poultry Outlook published by the Economic Research Service of the USDA.

Broiler Meat Production in October Falls by 3 Percent

Broiler meat production, which has fallen in 3 of the last 4 months, totaled 3.1 billion pounds in October, down 3 percent from the previous year. Total broiler meat production during the first 10 months of 2011 was 31.4 billion pounds, 2.6 percent higher than in the same period a year earlier. In October, the number of birds slaughtered fell to 700 million, down 3.2 percent from the previous year, as integrators have been reducing the number of chicks placed for growout over the last several months. The lower number of birds slaughtered was partially offset by an increase in the average live weight of birds at slaughter, up fractionally to 5.94 pounds. Average broiler weights at slaughter are expected to continue higher in November and December, but the rate of growth is expected to be much slower than it was over the first three- quarters of 2011. With these expected changes, the estimate for fourth-quarter 2011 broiler meat production was decreased 25 million pounds to 8.98 billion pounds, 5.4 percent below the previous year. This lowers the annual forecast for broiler meat production in 2011 to 37.3 billion pounds, an increase of 1 percent from 2010. The broiler meat production projections for first- and- second-quarter 2012 were each reduced by 100 three quarters of 2012. The revised forecasts in the first two quarters are down 5.3 and 4.2 percent on a year- over-year basis, and the revised total broiler meat production for 2012 is now 36.5 billion pounds, down 2.1 percent from 2011.

With relatively high corn prices forecast for the remainder of 2011 and into 2012, and with relatively weak prices for most breast meat products, broiler integrators are expected to scale back production through much of 2012. The number of chicks being placed for growout continues to be well below that of the previous year. Over the last 5 weeks, (November 5 to December 3), chick placements have averaged 154 million, down 6.6 percent from the same period in 2010. Chick placements are expected to remain below year-earlier levels through the first half of 2012 and gradually pull even with and then exceed year-earlier levels in the second half of 2012.

Cold storage holdings of broiler products at the end of third-quarter 2011 were revised downward slightly to 639 million pounds, down 6 percent from the previous year. With strong declines in broiler meat production expected in fourth-quarter 2011 and the first two quarters of 2012, ending stocks are expected to remain below year-earlier level through third-quarter 2012.

Broiler stocks at the end of October totaled 667 million pounds. This is an increase of around 28 million pounds from September, but still about 5 percent lower than the previous year. Stocks for most broiler products continue to be well below their year- earlier levels, with the exception of breast meat products. With lower year- over-year production expected and resulting lower stocks levels, broiler product prices are expected to get some upward pressure.

October Turkey Production Even with Year Earlier Output

Turkey meat production in October totaled 525 million pounds, almost identical to production a year earlier. Although the total meat production was unchanged, the number of turkeys slaughtered rose by 0.5 percent to 23.3 million. The increase in the number of birds slaughtered was offset by a slight decline in the average weight at slaughter from a year earlier to 28.3 pounds.

The fractional growth in turkey meat production in October contrasts to the strong expansion in production over the first half of 2011, when production was up 5.5 percent compared with the same period in 2010. Over the first 10 months of 2011, turkey meat production has been 3.4 percent higher. The second half of 2011 is expected to be a sharp contrast as production was only 0.5 percent higher in the third quarter, and the fourth-quarter production forecast is 1.5 billion, only 0.3 percent above the previous year.

With little growth in production and turkeys being taken out of storage in preparation for the Thanksgiving holiday, stocks of all turkey products fell by over 100 million pounds between the end of September and the end of October. Total turkey stocks were 407 million pounds at the end of October, down almost 1 percent (0.7) from the previous year. This is a significant change from stocks at the end of September that were 7.6 percent higher than the previous year.

Declines in stocks of whole birds accounted for 69 percent of the decline in total turkey product stocks from September to October. Whole turkey stock levels always decline at this point in the year, but stocks of whole birds fell by almost 71 million pounds, dropping the level for whole birds to 209 million pounds, almost 14 percent lower than the previous year. Whole bird stocks at the end of September were only 2.6 percent lower than the previous year. The decline in stocks of turkey products was much less (down 32 million pounds), and stocks of turkey products at the end of October were 199 million pounds, 18 percent higher than in October 2010.

With the steep October decline, the estimate of ending stocks for 2011 was lowered to 205 million pounds, down 10 million pounds from the previous estimate but still 7 percent higher than a year earlier. The stock estimate for first-quarter 2012 was lowered by 15 million pounds to 325 million. However, the estimates for the second and third quarters were both increased to 500 million pounds. Anticipating a strong drawdown in stocks during in the holiday period in 2012, ending stocks for 2012 were reduced by 10 million pounds to 200 million.

Table Egg Production Continues Higher

The table egg laying flock in October was estimated at 282 million hens, 0.9 percent above the previous year. Changes in the table egg flock numbers on a year-over- year basis have generally been lower in 2011. The flock size was higher in only 3 of the first 10 months, although table egg production has been higher throughout the year. The table egg flock is expected to remain higher than the previous year through the remainder of 2011, but only slightly. At the beginning of November the estimate of the number of birds in the table egg flock was down, but the decrease was less than 1 percent. With expected higher feed prices and continuing economic uncertainties, egg producers are not expected to have much of an incentive to expand production in 2012.

Even with table egg production higher throughout the first 10 months of 2011, total production has been 5.5 billion dozen, only marginally higher (0.8 percent) than the same period in 2010. In October, production was 562 million dozen, an increase of 1.9 percent from the previous year. Fourth-quarter 2011 table egg production is estimated at 1.69 billion dozen, or about 1.1 percent higher than the previous year.

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