September 21, 2006

Market factors come together to boost US chicken prices

Finally, the stars are aligned for US poultry companies as higher domestic demand, stable exports and lower inventory levels boosted wholesale poultry prices, providing relief to poultry companies who have suffered  losses and low profits in the past few months.

Wholesale prices on boneless chicken breast have risen roughly 32 percent since the low in April, said Richard Lobb, spokesman for the National Chicken Council.

Leg quarter prices, the export benchmark price, have more than doubled since April and are now at US$0.40 a pound.

Efforts to cut back on production have helped stabilise the market and have kept prices strong, Lobb said.

For example, Tyson, the largest chicken producer in the US, said a 5-percent production cut it proposed earlier should be in place by November. 

Despite the improved outlook, analysts said threats such as bird flu, as well as higher energy prices, may still bug the industry.