US chicken supply trends lower in March

Chicken supplies in the US trended lower in March, reflecting the poultry producers' and processors' attempts to bring the sector back into profitability, according to the USDA's Cold Storage and March Chicken and Eggs Reports released Tuesday (Apr 21).

Total stocks of frozen chicken on March 31 fell two percent from February, and were down 17 percent from March 2008. Chicken breast supplies in the freezer dropped 9.9 percent from last year's levels, and leg quarters fell 29.2 percent.

A larger turkey supply has increased total poultry stocks by three percent from February levels, but stocks were down four percent compared with 2008. Total pounds of frozen turkey supplies grew 10 percent from February and up 19 percent on-year.

The report said there were fewer total pullets, as the inventory fell 1.8 percent on-year. While the decline in these young breeder hens has slowed, the total number remains low. The number of pullets hatched fell 5.8 percent on-year, the sharpest decline in four months.

The data are moderately positive for Sanderson Farms, Pilgrim's Pride and Tyson Foods, as fewer pullets mean less meat, higher chicken prices and better margins for chicken processors, said JP Morgan analyst Ken Goldman.