March 2, 2009

Broilers are seen as the only category of poultry or livestock forecast to log a price increase in 2009, according to the US Department of Agriculture.

Despite decreasing exports, production cutbacks will lead to tighter domestic supply and higher prices, the USDA said. A 12-city wholesale broiler price forecast is seen averaging a record 81-87 cents per pound, up from 79.7 cents in 2008.

"As the livestock and poultry sectors move into 2009, feed and energy prices have declined but weak economic growth worldwide is likely to provide little stimulus for producers to expand production," the USDA said in a livestock outlook released Friday (February 27) at its annual Agricultural Outlook Forum. "The industry is still contracting and there are few signs that meat production will expand until relatively late in the year."

Broiler production in federally inspected facilities is forecast to slip 2 percent to 36.1 billion pounds in 2009, the USDA said. If realized, it would be the first annual decline in production since 1973.

Declining production is seen continuing through the third quarter, but USDA analysts said relatively lower feed prices and stronger broiler prices will improve producers' returns, driving a production increase during the fourth quarter.

"Poor global economic conditions and a stronger dollar are expected to limit exports to many recently growing markets and economic concerns and revised import quotas will constrain exports to Russia," the USDA said.

Poultry exports are expected to decline by 13 percent to 6.05 billion pounds in 2009. This follows an 18 percent increase in 2008.