February 28, 2005

 

 

US poultry exports to see a 5 percent increase in 2005

 

An increase in broiler exports, moderate production gains and little change in prices are expected in the US poultry industry this year.

 

Broiler meat production will expand by about 3 percent in 2005, according to USDA livestock analyst Shayle D. Shagam.

 

"After two years of favorable returns and last year's record prices, growth of this magnitude shows considerable restraint on the part of producers," Shagam said.

 

Broiler prices are forecast at 71 to 76 cents per pound, down from a record average of more than 74 cents last year.

 

Retail broiler prices are predicted to decline in the second half of the year, but average about the same as 2004.

 

Broiler meat exports will increase 5 percent to about 5.03 billion pounds this year, but will stay below the record 5.5 billion pounds in 2001, he said. A Russian quota will continue to limit imports from the United States to 1.7 billion pounds.

 

The bird flu discovery in the United States last year caused disruptions in broiler trade. As a result, exports of broilers to China declined last year. Although trade resumed in November, exports have not returned to their pre-ban levels, Shagam said.

 

Meanwhile Brazil has taken advantage of the United States' absence by increasing its broiler exports to China last year, making it a strong competitor this year.

 

Corn and soybean prices play a critical role in the industry, said Richard Lobb, spokesman for the National Chicken Council.

 

"The largest single factor in raising a chicken is the cost of the corn and soybean used to feed it," he added.

 

Market prices for corn are projected to average $1.90 in 2005 and 2006, down a nickel from the midpoint of the 2004 and 2005 forecast, according to a USDA-prepared report.

 

Soybean market prices are projected to average $4.50 per bushel in 2005 and 2006, down from the $5.10 per bushel midpoint of the 2004 and 2005 forecast.

 

With regards to beef, Shagam said the industry was constrained in 2004 by trade bans imposed in response to the December 2003 discovery of a mad cow-infected Holstein in the United States.

 

Beef exports this year are forecast at 640 million pounds. Beef imports are projected at 3.74 billion pounds this year, up almost 2 percent from last year's record.

 

Increased supplies of meat are expected to pressure prices down from last year's highs, he said.

 

Commercial beef production is expected to increase between 4 percent and 5 percent to 25.7 billion pounds in 2005.

 

Retail beef prices are expected to average slightly higher than $3.80 per pound in 2005, below the $4.07 per pound in 2004.

 

"Retail beef prices are expected to be lower in 2005 as large supplies of beef compete for consumer dollars," Shagam said.