August broiler-meat production up 6%

by Meat&Poultry Staff
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WASHINGTON – Broiler-meat production in August totaled 3.2 billion lbs., up 5.8% from the previous year, according to the Oct. 22 Livestock, Dairy and Poultry Outlook from USDA’s Economic Research Service. The increase in production was due to a higher number of birds slaughtered (766 million, up 5.5%) and higher average weights.

The total live weight of broilers at slaughter was up 5.7%, as the average live weight for broilers at slaughter was 5.57 lbs., up fractionally from the previous year.

Broiler-meat production in July and August was slightly higher than expected, and the estimate for third-quarter 2010 broiler meat production was increased slightly to 9.4 billion lbs., 2.5% higher than in third-quarter 2009.

With the number of chicks being placed for growout and average weights both climbing, the broiler meat production forecast for fourth-quarter 2010 was also increased slightly to 9.1 billion lbs., 3.1% higher than in fourth-quarter 2009. Average live weights at slaughter in fourth-quarter 2010 are expected to be higher than one year earlier.

Broiler-meat production for 2011 is expected to total 37.1 billion lbs., up about 645 million lbs. from 2010, but down 250 million lbs. from last month’s estimate. The reduction is the result of expected higher feed-grain prices in 2011. The higher prices are expected to cause integrators to scale back expansion plans in 2011, although the reduction is not expected to begin to take effect until second quarter 2011.

In 2011, broiler integrators are expected to face overall grain prices, especially for corn, that are considerably higher than in 2010. While broiler integrators are expected to lower the pace of expansion in 2011, the impact of higher grain prices will depend on many factors. Any improvements in overall economic conditions and consumer confidence or in foreign demand will help to moderate the downward pressure on production normally seen with higher grain prices.

From Sept. 18 to Oct. 10, the number of chicks placed for growout has been 3.3% higher than in the same period in 2009. Over the last several months, the number of chicks placed for growout has been slowly expanding compared with the previous year. This trend is expected to continue into the fourth quarter, but then begin to level out in first-quarter 2011.

Chicks placed for growout through the beginning of November will be expected to be slaughtered in fourth-quarter 2010. At the end of August, cold-storage holdings of broiler-meat products totaled 656 million lbs., up 5% from a year earlier.

At the end of August, “other” stocks totaled 302 million lbs., or 46% of the total. Although not included in the supply and utilization calculations, stocks of broiler feet increased more than 100% from the previous year.

This increase is the result of trade disputes with China, which is the destination for almost 100% of U.S. broiler feet exports.

Higher broiler-meat production and somewhat larger stocks normally would put downward pressure on broiler prices, but prices for most broiler products, especially breast-meat products, were relatively strong through September. However, in late September and continuing into October, prices of most breast-meat products have declined sharply.

In the Northeast market, the September average wholesale price for boneless/skinless breast meat was $1.67 per lb., 39% higher than a year earlier. Recently, prices have also declined for a number of other breast meat broiler products. Prices for leg quarters were 40 cents per lb. in September, up 2% from the previous year.

Unlike prices for breast meat products, leg quarter prices are expected to remain close to their current levels, especially with the gradual reopening of exports to Russia. While breast meat prices were strong in the third quarter, prices for boneless/skinless thighs were only $1.01 per lb. in September, 6% lower than the previous year.
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