Broiler meat production expected to rise in fourth quarter

by Bryan Salvage
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WASHINGTON — Fourth-quarter 2009 broiler-meat production is forecast at 8.95 billion lbs., 1% higher than a year earlier and the first year-over-year increase in the last five quarters, according to the most recent Livestock, Dairy, and Poultry Outlook from the Economic Research Service, U.S. Department of Agriculture. This increase is expected to be driven by a small increase in the number of birds slaughtered and a slight increase in average live weights.

Third-quarter production totaled 9.17 billion lbs., 3% below the same period in 2008, mostly as the result of a smaller number of birds being slaughtered, as the average weights were almost identical to the previous year.

In 2010, broiler-meat production is expected to increase slightly as the expansion incentives from generally lower prices for corn and soybean meal are expected to be mostly offset by little growth in real disposable income and continued high unemployment. Broiler-meat production in 2010 is forecast at 36.1 billion lbs., 1.3% higher than in 2009.

Ending cold-storage holdings of broiler products totaled 615 million lbs., down 16% from the previous year and 17 million lbs. lower than the previous quarter, as the result of lower broiler-meat production in third-quarter 2009 and continued relatively strong exports. Most of this decrease is the result of smaller stocks of leg-meat products. At the end of third-quarter 2009, leg-quarter holdings totaled 48 million lbs., down 57% from high levels seen the previous year.

Stocks were also lower for breast meat and drumsticks, but the decreases for these items were partially offset by large holdings of thighs and thigh meat. Although higher broiler-meat production is forecast for 2010, overall stocks of broiler products are expected to be only slightly higher. Cold-storage holdings of whole broilers at the end of third-quarter 2009 were 23 million lbs., down 11% from the previous year. This decrease in stocks has not led to higher prices, as whole-bird prices in third-quarter 2009 were 77 cents per lb., down 5% from a year earlier.

Boneless/skinless breast meat prices in the Northeast market declined to $1.13 per lb. in October, down almost 35 cents from this year’s peak in May. Even with this decline, the October price is still 4% higher than the previous year. October 2009 leg-quarter prices averaged 32 cents per lb., down 38% from last year when exports were at record levels.

Broiler exports in September totaled 580 million lbs., down considerably from the previous year but similar to exports in July and August. Much of the strength of exports in September was due to continued strong shipments to Mexico and the combined China/Hong Kong market.

During third-quarter 2009, broiler shipments totaled 1.719 billion lbs., down 11% from last year’s record exports, but up 64 million lbs. from second quarter 2009 and stronger than originally expected.

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