September 19, 2006

US poultry prices on the way up as production remains steady

US poultry prices are making their way up as broiler meat production for the third quarter is expected to inch up a slight 1 percent from the previous year to 9 billion pounds. 

Almost all the production increase is expected to come from higher average weights at slaughter as the number of birds slaughtered in the third quarter is expected to be down slightly from the same period in 2005.

Low prices in the first few months of 2006 led to reductions in number of chicks placed for grow out. However, this has not affect total broiler meat production as birds have achieved higher average weights. Broiler meat production in July was 2.85 billion pounds, up 1.5 percent from a year earlier even as the number of birds slaughtered was down marginally. The average live weight was 5.38 pounds, up 2.1 percent from July last year.

Stronger prices for broiler products and a generally better short-term outlook for grain prices may encourage an increase in broiler production in the future.

Prices for broiler products have begun to strengthen over the last several months. While prices in August were still lower than a year ago, they were up considerably from earlier this year.

Prices for whole birds averaged 68 cents per pound in August, down 4.5 percent from the previous year, but up nearly 12 percent from April.

Prices for leg quarters, one of the most popular export poultry items, in August were down 15 percent from the previous year, but is double the price from the low prices seen in April of this year, when export sales were much affected by bird flu.

As export markets made a strong recovery from the previous slowdown, prices are on the rise once again. Prices for breast meat products have similarly strengthened in the last several months.