US broiler production to increase slightly; price rise minimal

US broiler meat production in 2010 is forecast to rise 1.2% on 2009 levels, according to the latest Livestock, Dairy and Poultry Outlook report from the USDA.

While this is a slower growth rate compared to previous years, the USDA does not expect it to translate into significantly higher prices, given US poultry export volumes are expected to decline 2%.

Significantly reduced shipments of US chicken to Russia and the Ukraine in 2010 are likely to be partially offset by higher exports to Mexico, leaving an increased supply of poultry on the US domestic market, particularly chicken leg quarters. This lends support to the view that price rises may be minimal.

Contrary to the USDA forecast, US-based Steiner Consulting Group (SCG) is expecting the US wholesale 12 city broiler indicator to average 7.5% higher in 2010, given the contraction in production capacity in the US due to Pilgrim's Pride declaration of Chapter 11 bankruptcy in 2008.

Cold storage stock levels of broiler meat at the end of January 2010 were 10% lower on the same time last year - a factor that may uphold prices.

In January, USDA retail chicken prices were 6% lower on the same time last year, to 173.1US¢/lb, while at the wholesale level, prices remained unchanged at 81.5US¢/lb.