Broiler production to decline in 2012

by Meat&Poultry Staff
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WASHINGTON – Broiler production is forecasted to have relatively sharp year-over-year declines during the first three quarters of 2012, according the U.S. Department of Agriculture's Economic Research Service as reported in the Feb. 17 edition of the National Chicken Council’s Washington Report.

Contributing factors to the trend include fewer broiler chicks place for growout combined with expected lower average live weights for market-ready broilers, ERS said in its "Livestock, Dairy and Poultry Outlook" report. ERS said the average live weight per bird at slaughter in fourth-quarter 2011 was 5.83 lbs., down 0.7 percent from the comparable year-ago quarter. The fourth quarter in 2011 was the only quarter where the average weight was less than the previous year.

Improving unemployment rates could influence broiler production, however feed costs will be paramount, ERS said. Declining cold storage broiler stocks has been reflected in increases in wholesale broiler prices, according to ERS analysts.

In January, prices for boneless-skinless breast meat in the Northeast market averaged $1.30 per lb., up 16 percent from the previous year and 4 cents per lb. higher than the previous month. Prices for boneless-skinless breast meat in 2011 had been lower than the previous year in 10 of the 12 months. Leg quarter prices in the Northeast market also were higher, averaging 53 cents per lb. in January 2012 compared with only 35 cents per lb. in 2011, ERS said. Leg quarter prices were higher compared to 2010 for all but one month in 2011, partly as a result of a strong export market.

ERS analysts are forecasting broiler meat exports in 2012 to be slightly higher than the large shipments in 2011. If exports remain strong, there will be upward pressure on leg quarter prices, considering lower beginning stocks and expected production declines. Overall prices for broiler meat products are expected to continue to gradually increase in 2012 because of high prices for competing meats and lower levels of broiler production, ERS said.

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