USDA lowers 2014 broiler production forecast

The USDA has lowered its forecast for U.S. broiler production in 2014, citing slower-than anticipated growth in the amounts of eggs set and chicks placed. The USDA, in its April 9 World Agricultural Supply and Demand Estimates (WASDE) report, projected 38.5 billion pounds of broilers will be produced in the U.S. in 2014, down from its March estimate of 37.7 billion pounds.
The forecast for broiler production in the U.S. in 2014 remains higher than the broiler production numbers of 2013, when 37.8 billion pounds were produced.
The USDA also lowered its forecast for U.S. turkey production in 2014. The April 9 WASDE report called for U.S. turkey production in 2014 to be at 5.68 billion pounds, down from the 5.7 billion pound projection made in March. U.S. turkey production in 2013 amounted to 5.8 billion pounds.

Broiler chicken will compete well against other proteins in upcoming months

The market is looking pretty good for the U.S. broiler industry in the remaining months of 2013 and into 2014, economist Jim Robb said, especially when compared to other proteins that will struggle during that time period. Robb, director and senior agriculture economist at the livestock marketing information center, offered a comparative analysis on July 22 during the Chicken Marketing Seminar, hosted by the National Chicken Council.

The turkey industry is facing what some call the worst year on record. While there is some level of optimism for the future in the turkey industry, Robb is not convinced. At the present time, the demand is not very high for the full holiday bird or for the sliced product, and pulling back production is only doing so much good.

"It's going to be a struggle to get this thing glued back together. For those of you competing with the turkey side, I'd say 'go at it.' For those of you in the turkey business, it's going to be a bit of a struggle," said Robb.

Demand for ground turkey is better, Robb added, but the industry has taken some of the product it doesn't have an avenue for and forced it into the ground market. "That's not necessarily a value-added product," Robb said.

The U.S. broiler industry will also have fewer worries when it compares itself with the beef industry, as recent droughts have caused a shorter domestic supply, which Robb expects to continue to shrink in 2014. With Mexico and Canada also facing drought problems, imports are also affected. The U.S. imports more cattle from those countries than any others, Robb said.

"The Mexicans have mined their beef cow herd to the level that they no longer have a sustainable beef industry. Those cattle are no longer available to the U.S. That means you will probably see a half-million year-to-year decline in the amount of Mexican feeder cattle coming north this year, and a year from now you could it could approach a 1 million head year-to-year decline," Robb said.

Ethanol's impact on broiler industry: $34 billion in 6 years

Mike Donohue, vice president of Agri Stats, told a crowd January 30 at the 2013 International Production and Processing Expo the ethanol industry, according to his figures, has cost the broiler industry more than $34 billion over the past six years.
Donohue said he took the average live pounds expense, and compared it to the difference in pricing for feed ingredients to get that figure.
Donohue did not figure ethanol’s impact on the turkey, layer, beef, pork or other animal protein industries, but he estimated it would be between $110 billion and $120 billion in damage to the overall livestock industy. He also added you could take that figure and multiply it by about $3.5 to get its impact on overall world animal agriculture during that six year time span.
”It’s been a wonderful thing for farmers in the Midwest in that category, but there are consequences for those of us who are end users, from the decision to feed our cars instead of feed our people,” Donohue said.

US broiler outlook good for 2013 and beyond

Once poultry processors start making more money and nationwide production goes up, growth in the poultry industry should really take off.

When the United States Department of Agriculture released its World Agricultural Supply and Demand Estimates report on January 11, many in the industry were skeptical of its outlook of increased broiler production in 2013. But Dr. Paul Aho, Poultry Perspective economist and consultant, said growth is the best thing for the market, for 2013 and beyond.
"It's a very plausible scenario that times will be really good for most of this calendar year. So why cut back? I don't see any motivation to do that," Aho said.
With broiler prices around $1.30 per pound, the industry as a whole is now mostly breaking even, Aho said. Since meat prices traditionally are lower in the winter, he expects the price to go up and make producing chickens profitable.

Poultry industry poised for growth
Growth in the poultry industry this year will be modest, Aho said, because of how 2012 went as a result of the drought and high feed prices. However, once processors start making more money, and nationwide production goes up when Sanderson Farms gets its proposed new plant built, the growth should really take off.
Adding to the optimistic picture is the prospect of increased line speed at plants, which the USDA has proposed. If that takes effect, each company could churn out more products without having to build more plants.
Aho feels upbeat that the demand for poultry products should go up along with the supply.
The 2012 drought may have hurt the poultry industry in terms of feed prices, but it has the potential to help it from the consumption side. While poultry producers rely on grains to feed their animals, cattle producers also need healthy rangelands to care for their livestock. As pastures have grown little grass, hay is in short supply and ponds have all but dried up, cattlemen have depleted their herds and driven up the cost of beef. It will take at least a year for those rangelands to be replenished, meaning cattle numbers will remain low and beef prices will continue to climb.
With that in mind, Aho said a consumer shift to a more affordable poultry product is realistic.
Overall meat consumption has dropped since the recession arrived in 2008, but Aho said as the economy recovers, people will likely begin consuming more. It may not jump back to the level it was before 2008, but it will move back in that direction.
The most troubling thing Aho said he saw in the USDA's report was that the U.S. ending inventory of corn at the end of August is forecast at 600 million bushels. Some analysts have even called that figure below pipeline. But Aho predicts that if it rains in the Midwest, and crops were planted in a normal time frame, the price of corn will start dropping in April.

More rain expected in US in 2013
Aho said it is very possible that the corn belt will get more adequate rain in 2013, and therefore create a greater grain supply and subsequent lower feed prices. Two of the most important corn producing states — Indiana and Ohio — are not suffering from a lack of moisture. Further west, Illinois, another key state, has a moderate level of moisture. But Iowa, which Aho calls the biggest player in the U.S. corn market, is not in good shape. Should the drought line shift 100 miles to the east, Aho said, problems with corn prices will likely persist. If it shifts 100 miles to the west, people can expect a bumper crop.
Historically, the United States has never had a major drought two years in a row, though it has occurred in alternating years. Keeping that in mind, Aho said the gamble of ramping up production is worth it.
He also thinks as other nations plant more corn and soybeans, the price of feed will not be this high in upcoming years.
The ethanol industry's demand for corn has slowed down since 2010, while countries like Argentina, Brazil, and the Ukraine have all ramped up production. All three are major players in the corn industry, and the U.S. even imported 20 million metric tons of Brazilian corn in 2012. Aho said strong corn crops from Brazil and Argentina are anticipated for 2013.
"In the last two years, the production of corn around the world has increased by 100 million metric tons. The rest of the world is coming on gangbusters, and I think the rest of the world is going to solve this problem. The world is going to be awash in corn within two years, and it won't matter what's going on in the U.S.," said Aho.
It is a similar situation with soybeans. Chinese hog producers started feeding their animals a healthier diet, which previously did not include much soybean. As they transitioned out of garbage and into soybeans, that drove up the demand for the crop. And South American nations, India, and even places in Africa have hiked soybean production. But that increased demand for soybeans will taper off, Aho said.
Keeping that in mind, Aho said this may be the last year that grain prices are a hindrance to poultry producers.
"If we're looking at 2014 to 2018, we won't be even talking about grain prices. Those days will be over. We will have moved on to other topics," he said.

Brazil broiler production to grow 3 percent in 2012

Brazil's broiler production is estimated to grow by 3 percent in 2012, according to the U.S. Department of Agriculture Foreign Agricultural Service's latest report. This number is revised down from an initial forecast of 5 percent growth. Production estimated at 13.3 million metric tons, reflecting the current view of industry leaders given the world economic uncertainties derived from the European Union financial crisis and its impact on Brazilian broiler export markets. In addition, production growth has slowed due to an overvalued Brazilian currency and restrictions from trade partners. Another important factor is a slowdown in the rate of growth of domestic consumption combined with higher costs of production due to higher corn prices, according to the report. Total 2011 broiler production was revised to 12.8 million metric tons, 4.5 percent higher than 2010, to show new data obtained from the industry. Brazil's domestic consumption of broiler meat in 2012 is projected to increase by 3 percent to 9.9 million metric tons, which is below the initial forecast of 10.1 million metric tons. This estimate reflects continuing increases in disposable income of Brazilian consumers, according to the report. Broiler meat still remains the most affordable to lower-income consumers compared to beef and pork. However, high debt-to-income ratios among Brazilian consumers have been reported as a growing concern among trade contacts. This situation could inhibit further increases in consumption.

US broiler production estimated down fourth quarter 2011

U.S. broiler meat production in the fourth quarter of 2011 is expected to total 8.93 billion pounds, down 50 million pounds from the previous estimate, according to the U.S. Department of Agriculture.
Broiler meat production in November 2011 was 2.9 billion pounds, a decrease of 7.1 percent from 2010 numbers. The number of broilers slaughtered in November was down 6.2 percent from November 2010, and this decrease was compounded by a decline (1 percent) in the average liveweight for birds at slaughter (to 5.82 pounds). Broiler meat production in December 2011 is expected to show a decrease due to a reduced number of birds slaughtered at a lower average liveweight. The outlook for broiler meat production in 2012 has changed due to sharp changes in the number of chicks being placed for growout and average broiler weights at slaughter. At the beginning of January, the five-week moving average (December 10, 2011 through January 7) showed that the number of chicks being placed for growout was averaging 3.6 percent lower than 2011 numbers. A less drastic reduction in the number of chicks points to possibly smaller declines in broiler meat production in the first half of 2012.

India broiler prices rising on short supplies

India's live broiler prices have reached Rs 53 (US$1.08) per kilogram, up from last week's Rs 47 (US$0.96) per kilogram, on short supplies after experiencing a lull due to seasonal uncertainties, according to reports.
Prices of layers and eggs have remained steady at Rs 40 (US$0.81) per kilogram and Rs 2.61 (US$0.05) each, respectively. “Broiler prices declined [in September] because of the austere/festive season resulting in poor offtake," said an industry source. "Most of the poultry farms were running in half their capacity; and due to shortage of birds, prices are likely to go up gradually.” Poultry feed prices have remained stable, at Rs 19,600 (US$398.86) per metric ton.

The latest trends in French broiler production, consumption

Paul Brochard, account manager for France with Cobb, gives an overview of the state of play of the French poultry industry. Watch the video here.

US broiler meat production slowing through 2012

2012 broiler production is estimated to be up just 1.1% from anticipated 2011 numbers.

U.S. broiler meat production for the first 5 months of 2011 was 15.5 billion pounds, up 4.8% from the same period in 2010, due to a greater number of birds being slaughtered and higher average weights at slaughter, according to the U.S. Department of Agriculture's latest report. However, starting in late May and continuing through the most recent data, the number of eggs placed in incubators and the number of chicks placed for growout has turned sharply lower than in 2010, and broiler meat production in third-quarter 2011 is expected to be below that of the same time in 2010.
The falling year-over-year production is expected to continue in fourth-quarter 2011, and the fourth-quarter production estimate was lowered to 9.3 billion pounds, down 75 million from the earlier estimate. Production for all of 2011 is estimated at 38.4 billion pounds.
The relatively higher grain prices and the sluggish economy are expected to influence broiler production through 2012. Production in 2012 was reduced by 230 million pounds to 37.8 billion pounds, up only 1.1% from the 2011 total. Most of the reduction was attributed to changes in the second half of 2012, as the expected production increase in that period is now expected to be more modest than originally forecast.
At the beginning of June the number of birds in the broiler breeder flock was estimated at 54.8 million, down just less than 1% from a year earlier. If the size of the broiler breeder flock remains below the previous year over the next several months, the number of eggs placed in incubators and chicks hatched are expected to continue to be significantly lower compared with 2010, and this will reduce the number of birds available for slaughter.

US broiler production up slightly in second quarter 2011

US broiler meat production estimates have been revised down for the remainder of 2011, even though numbers for the first half have been up from 2010.

US broiler meat production is expected to total 9.33 billion pounds in the second quarter of 2011, up 1.4% from 2010 numbers, but production is expected to be lower in the second half of 2011, according to the U.S. Department of Agriculture's latest report.
The broiler meat production estimate for the fourth quarter of 2011 was lowered by 25 million pounds to 9.4 billion pounds, while the estimate for the first quarter of 2012 was also lowered by 25 million pounds, to 9.36 billion pounds. The total for 2012 was reduced by 100 million pounds to 38.0 billion pounds. Broiler stocks are up 16% so far from 2010, to 707 million pounds at the end of April, but are expected to decline in the second half of the year as gains in production slow and then become negative. Broiler shipments in April declined 7.6% from 2010 numbers, totaling 497 million pounds.
Turkey meat production in April was 456 million pounds, up slightly from the same time in 2010. The number of birds slaughtered was 19.1 million, down about 0.5% from 2010, but this was offset by a 1% increase in the average weight at slaughter to 30 pounds. Turkey shipments rose 23% from 2010 numbers, totaling 52.8 million pounds.

Pakistan poultry prices expected to begin declining trend

Market analysts for Pakistan are predicting a declining trend in the prices of poultry and poultry products in the markets of various districts of Punjab, due largely to the end of wedding season and a rising mercury trend which have caused demand to weaken.
During the last two weeks of March, prices of live broilers averaged Rs 117.50 (US$2.63) per kilogram in the Faisalabad district and Rs 131 (US$2.93) per kilogram in the Multan district. Prices also increased slightly in Lahore and Rawalpindi, but the expectation of reduced production has led analysts to predict an upcoming price drop. Market sources said a major indication of the coming trend is a steep decline in the price of day-old broiler chicks in various Punjab districts. As of April 4, the price of day-old broiler chicks dropped by Rs 10–12 (US$0.22–$0.27) and is hovering around Rs 23–30 (US$0.51–$0.67) per chick.
The average price of eggs also reduced by almost Rs 5 (US$0.11) per dozen in the Lahore, Rawalpindi, Faisalabad and Multan districts, in keeping with the expected trend.

China broiler production to rise 4% in 2011, according to report

China's broiler meat production is expected to grow by 4% in 2011, according to a report by the U.S. Department of Agriculture's Foreign Agricultural Service, reaching 13 million metric tons by the end of the year.
In addition, China's broiler meat imports will decline 20% to 230,000 metric tons, following a 28% drop in 2010 due mostly to sharply lower imports from the U.S. resulting from China's measures of anti-dumping duties (beginning February 2010) and countervailing duties (in August 2010) on U.S. broiler products. The country's broiler exports will increase 8% to 410,000 metric tons following strong 2010 sales.

Aviagen annual Russian seminar held in Moscow

Aviagen's annual Russian seminar was held recently in Moscow promoting the theme of "quality counts."
Over 100 people attended the event, which took a look at the entire lifecycle of a broiler from hatching through processing. Presentations focused on such topics as hatchery practice, assessing chick quality, broiler economics and research on cost-effective nutrition.

2010 broiler, pork production estimates reduced

The latest USDA World Agricultural Supply and Demand Estimates reports broiler and pork production are reduced from last month. The 2011 forecast is reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler and turkey production gains.
Pork and poultry trade forecasts are unchanged from last month. Livestock and poultry prices for 2010 are raised but forecasts for 2011 cattle and hog prices are unchanged. The broiler and turkey price forecasts for 2011 are raised slightly on expected tightness in supplies. Egg prices for 2010 are forecast higher due to the recent spike in third-quarter prices, but the forecast for 2011 is unchanged.

Corn
Projected U.S. feed grain supplies for 2010/11 are lower this month with lower carryin and reduced production for corn and sorghum. Beginning stocks for corn are projected 40 million bushels lower with higher 2009/10 corn use for ethanol and a small increase in exports. Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record. The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels.
Domestic corn use for 2010/11 is lowered 100 million bushels with lower expected feed and residual use, as higher prices trim feeding demand and the smaller crop reduces residual disappearance. Projected exports are raised 50 million bushels with rising world demand for coarse grains, particularly corn. U.S. corn ending stocks are expected to decline to 1.1 billion bushels, down 196 million bushels.

Soybeans
Soybean exports for 2010/11 are increased 50 million bushels to 1.485 billion, reflecting strong early season sales and a projected increase in global import demand, especially for China. Soybean ending stocks are projected at 350 million bushels, down 10 million from last month as higher export demand more than offsets the increased supply.
Soybean exports for 2009/10 are projected at a record 1.495 billion bushels, up 25 million from last month, reflecting strong shipments in the final weeks of the marketing year. The increase is partly offset with a lower residual, leaving ending stocks projected at 150 million bushels, down 10 million. Other changes for 2009/10 include reduced use of soybean oil for biodiesel and increased soybean oil exports. Season ending soybean oil stocks are projected record high at 3.21 billion pounds.
Prices for soybeans and products are all raised this month, supported by strong prices for corn and wheat. The U.S. season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range.

Wheat
U.S. wheat ending stocks for 2010/11 are projected lower this month with higher expected world demand for U.S. wheat. Strong early season sales and reduced supplies in EU-27, particularly of higher quality wheat, support an improved outlook for U.S. exports.
Wheat exports are projected 50 million bushels higher with larger expected shipments of Hard Red Winter, Hard Red Spring and White wheat. Projected ending stocks are lowered by the same amount to 902 million bushels. At the projected level, stocks would remain the second highest in more than a decade. The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared to $4.70 to $5.50 last month.
The next WASDE report will be released Oct. 8.

Experts: poultry industry set to rebound in 2010

The coming year will be a profitable one for U.S. broiler producers as the economy continues its recovery from recession, according to a panel of economists who spoke at the Poultry Market Intelligence Forum held during the 2010 International Poultry Expo in Atlanta, Ga. The forum was a joint effort of U.S. Poultry & Egg Association and the National Poultry & Food Distributors Association.
Paul Aho of Poultry Perspective said that he expects U.S. bulk leg quarter prices will be lower in the first half of 2010 than they were in the same period in 2009. In the second half of the year, he expects leg quarter prices to exceed year-before levels and end at around $0.10 per pound higher than at the close of 2009. He said that trade difficulties with Russia will create a drag on leg quarters early in 2009, but he expects some resolution to the dispute and that Russia will buy U.S. leg quarters in 2010. Boneless skinless breast meat prices should be higher in the U.S. throughout 2010 than in 2009, according to Aho.
Mike Donohue of Agri Stats said that “2010 should be a good year for the industry” in terms of profitability.
He said that live performance in 2009 was outstanding and credited a number of factors for the long upward trend, including improvements in bird genetics and in on-farm equipment and housing. Average livability for the U.S. industry was more than 96% in 2009, up 1.5% from 20 years ago. Improved flock health has also resulted in a roughly two-thirds reduction in the rate of field condemnations at the processing plant over the same period.
Donohue explained that some of 2009’s outstanding live broiler performance can be attributed to increased downtime between broiler flocks, which was a result of production cutbacks.
The range between the best and poorest performing companies in terms of feed cost per live pound of broiler has increased from around $0.05 per pound in 2005 to $0.11 per pound in 2009. Donohue said that this increased spread results from the costs of grain purchasing positions, logistics of moving grain and differences in bird performance.
Subsidized corn-based ethanol production in the U.S. continues to cost the U.S. broiler, turkey and egg industries billions of dollars, according to Donohue. Based on Agri Stats data, he estimated that U.S. poultry producers have spent $18.5 billion more for corn over the last two-and-a-half years than they would have in the absence of ethanol mandates, subsidies and tariffs.

USDA forecasts increase in broiler production

The latest USDA forecast shows the prices for broiler products are on the rise.
Though prices have not reached last year's mark, low production has forced prices to increase. Chick placement for grow-out is on the rise because of high broiler meat prices.
The USDA expects rates to reach last year's level by the fourth quarter of 2009.