Broiler Meat Production Down 2 Percent In August
10/16/2009 10:10AM
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Broiler meat production in August was 3.0 billion pounds, down 2.4 percent from the previous year. The decrease was due to a smaller number of birds slaughtered, (726 million, also down 2.4 percent). The total liveweight of broilers at slaughter was down 2.6 percent as the average live weight at slaughter was 5.56 pounds, down fractionally from the previous year.
Broiler meat production in July and August was slightly higher than expected, but even so, third-quarter 2009 broiler meat production is expected to total 9.15 billion pounds, down 3.2 percent from third-quarter 2008. A decrease in production in third-quarter 2009 compared with third-quarter 2008 would make four consecutive quarters of declining production on a year-over-year basis.
Broiler meat production in fourth-quarter 2009 is expected to total 8.95 billion pounds, up 1 percent from the previous year. Average live weights in the fourth quarter are expected to continue slightly lower than the previous year. Average weights at slaughter have been lower than the previous year in each of the first 8 months this year. However, the slight decline in average weights is expected to be offset by an increase in the number of birds slaughtered, especially later in the fourth quarter.
Broiler meat production for 2010 is forecast at 36.15 billion pounds, an increase of 1.5 percent from 2009, but still 2 percent lower than in 2008. Broiler integrators are expected to face overall feed prices in 2010 that are slightly lower than in 2009. Prices for corn are expected to be down slightly, with lower prices mostly in the first half of the year, and soybean meal is forecast to have a relatively strong decline in price in 2010 from 2009. Broiler integrators are expected to gradually expand production in 2010, but the pace of the expansion will depend on the impact of lower grain prices, combined with any gains in domestic and foreign demand. Any strong improvements in overall economic conditions and consumer confidence are expected to translate into stronger broiler sales, especially in the food service sector, leading to more rapid production expansion by the end of 2010.
Over the last 5 weeks (September 5 to October 3, 2009), the number of chicks placed for growout has been down 2.1 percent from the same period in 2008. Over the last several months, the number of chicks placed for growout has been slowly moving closer to the numbers placed for growout in 2008. This trend is expected to continue and to eventually change over to positive growth during the fourth quarter. It was in the middle-to-end of fourth-quarter 2008 that chick placements turned sharply lower. With an average 7-week growout time, chicks placed through the beginning of November will be expected to be slaughtered in fourth quarter
2009.
Relatively strong exports in June and July led to third-quarter 2009 broiler meat ending stocks estimates being revised downward to 635 million pounds from the earlier estimate of 675 million pounds. At the end of August, cold storage holdings of broiler meat products totaled 622 million pounds, down 14 percent from a year earlier.
Ending stocks were lower for most chicken cuts, with large drops in stocks for leg quarters (down 37 percent), breast meat (down 11 percent), drumsticks (down 46 percent), and whole chickens (down 36 percent). In examining cold storage holdings, it is important to note that the undifferentiated products in the “Other” category account for over half of all stocks. At the end of August other stocks totaled 360 million pounds, down 8 percent from the previous year. Somewhat surprising was the increase in stocks of wings. Several food service companies have introduced advertising campaigns specifically promoting their wing products. Their purchase of broiler wings to support these advertising campaigns helps to explain the strength in wholesale wing prices over the last several months.
Broiler meat production and stock levels are lower, yet unsettled economic conditions and high unemployment rates have forced spending cutbacks for a large portion of the population, which has in turn placed downward pressure on many broiler product prices. In the Northeast market, the September average wholesale price for boneless/skinless breast meat was $1.21 per pound, down 27 cents per pound from its peak price in May, but actually up 5 percent from a year earlier. Prices have also declined for a number of other broiler products. Prices for leg quarters reached 51 cents per pound in June, but had fallen to 40 cents per pound by September. The decline was similar for boneless/skinless broiler thighs, falling from a peak price of $1.24 per pound in June to $1.08 per pound in September.